Midlands engine trouble: The challenges facing the West Midlands Combined Authority

Published on Incomes and Inequality

In May 2017, residents of the West Midlands Combined Authority (WMCA) will go to the polls to elect its first ‘Metro Mayor’. The WMCA – comprising Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton councils – is also at the heart of the government’s wider ‘Midlands Engine’, which aims to boost the economy of this area.

The new focus is much needed, with evidence suggesting that this part of the Engine is spluttering at the moment. On a range of indicators – growth, pay and income – the West Midlands ranks not just below the UK average, but also below most other city regions. The real black mark on the WMCA’s living standards scorecard however was, and continues to be, employment.

  • By the eve of the financial crisis the WMCA’s employment rate stood at 66.7 per cent, 3.2 percentage points below the city region average.
  • Since then, the WMCA has experienced the slowest employment recovery of any city and is the only one of the city regions that has failed at any point after the crisis to close its ‘jobs gap’ by returning to its pre-crash employment rate.
  • Since the nadir in 2011 WMCA’s employment rate has grown by approximately half as much as the city region average. Had its employment rate grown at the same rate as the city region average, an additional 114,000 people would today be in employment in the WMCA.

Looking ahead to how the new Metro Mayor working together with central government can turn the region’s economic prospects around, the Foundation highlights three key priorities:

  • Ensure the city region has a ‘jobs rich’ industrial strategy. As well as capitalising on its strong manufacturing base, the city region should also look to expand into more ‘jobs-rich’ areas such as the high value services sector, such as insurance and financial services;
  • Utilise the West Midlands’ ‘human goldmine’ of its large student population. Improving its graduate retention rates by attracting knowledge jobs to the region would boost productivity and create spillover benefits for local non-graduates too; and,
  • Prioritise support for disadvantaged groups. The report calls for investment in back-to-work programmes to support young and low-qualified people into employment, along with specific outreach programmes for the region’s BAME population.