North Warwickshire Local Economic Assessment Summary. October 2011

Transcription

1 North Warwickshire Local Economic Assessment Summary October 2011

2 Disclaimer This report has been prepared by the Warwickshire Observatory and Warwickshire County Council, with all reasonable skill, care, and diligence. We accept no responsibility of whatsoever nature to any third parties to whom this report, or any part thereof, is made known. Any such party relies on the report at their own risk. Copyright Statement The copyright for this publication rests with Warwickshire County Council. This publication may be used for research, private study or for internal circulation within an organisation. The report includes Crown copyright and OS copyright information, used with permission. Any material that is reproduced from this report must be quoted accurately and not used in a misleading context. The copyright must be acknowledged and the title of the publication specified. Publication date: October 2011 Contact: Kate McGrory Telephone: katemcgrory@warwickshire.gov.uk 1

3 Summary of Economic Indicators Indicator North Warwickshire Warwickshire Sub-region (Cov & Warks) West Midlands England Total Population (2010) 61, , ,700 5,455,200 52,234,000 Population growth ( ) +0.2% +5.1% +4.8% +3.0% +5.2% Number of jobs (2009) 42, , ,000 2,588,000 26,246,000 Jobs growth ( ) +44.8% +16.9% +8.8% 0.0% +4.1% Number of businesses (2009) 2,800 25,035 33, ,550 2,040,150 Growth in number of businesses ( ) +7.1% +9.8% +11.0% +6.2% +8.2% Total GVA growth ( ) % +86.5% +74.6% +99.1% GVA per head* 23,633 (60) 20,461 19,919 17,335 21,049 Productivity GVA per employee (2008) - 43,105 42,579 39,804 46,949 Average Business Starts per 10,000 population ( ) Proportion of Employment in Knowledge Economy (2009) 20.8% 36.4% 39.7% 38.0% 42.1% Proportion of Employment in Knowledge Business Industries (2009) 12.0% 17.8% 17.7% 15.1% 19.9% Proportion of employment in public sector (2008) 10.5% 13.8% 15.7% 19.8% 18.6% % of working age people claiming out-of-work benefits (2010) 8.9% 8.7% 10.9% 13.5% 11.8% Average real disposable income (2009) - 16,218-13,722 15,545 Average annual resident earnings (2010) 24,942 26,277 n/a 23,902 26,268 Average annual workplace earnings (2010) 23,893 25,627 n/a 23,838 26,250 * 2007 GVA per head figures estimated for Local Authority districts (as official GVA data is not available at this spatial level) and their rank compared to all 380 LA areas (source: UK Competitiveness Index 2010). Warwickshire, sub-region, region and national figures relate to

4 The UK Competiveness Index 2010 Variable Year/Rank North Warwickshire Nuneaton and Bedworth Rugby Stratford-on-Avon Warwick KNOWLEDGE-BASED BUSINESSES (% ALL BUSINESSES) RANK (380) % WORKING AGE WITH NVQ RANK (379) BUSINESS REGSITRATIONS PER 10, INHABITANTS RANK (380) BUSINESSES PER 1,000 INHABITANTS RANK (380) ECONOMIC ACTIVITY RATE (WORKING AGE) Jul 2007-Jun RANK (379) WORKING AGE EMPLOYMENT RATE RANK (379) GVA PER CAPITA ,633 13,282 18,878 20,256 24,126 RANK (380) PRODUCTIVITY ,564 41,564 41,564 41,564 41,564 RANK (380) FT WEEKLY MEDIAN PAY RANK (378) CLAIMANT RATE RANK (380) UKCI RANK (379) Source: Centre for International Competitiveness. For more information, please visit 3

5 OVERVIEW Current Population The latest estimates 1, for mid-year 2010, suggest North Warwickshire is home to 61,900 people. North Warwickshire s population has been growing for the past four decades and the Borough is now home to 3,500 (6%) more people than at the start of the 1970s. However, this growth has been slow in recent years and falls behind the growth rate of 17% seen across Warwickshire. North Warwickshire s population pyramid shows that the Borough has an older age profile when compared with the national average. North Warwickshire has a lower proportion of children aged 0-9 years and young people (aged years) compared to the England and Wales average. However, the Borough has higher proportions than the national average in those aged years. North Warwickshire population pyramid, 2010 Population change, Population ( 000s) North Warwickshire Change Change % 0.2% Warwickshire % 5.9% West Midlands 5,146 5,186 5,230 5,281 5, % 3.3% UK 55,928 56,357 57,439 59,113 62, % 5.3% Source: National Statistics ( Crown Copyright Age Percentage 1 Population is only measured at ten year intervals, by means of the Census. In intervening years, the Office for National Statistics makes estimations of population development. NW Males NW Females England & Wales Males England & Wales Females Source: National Statistics ( Crown Copyright

6 Mosaic Profile Mosaic is a tool for understanding household and customer types, and allocates every household in the county to one of 69 categories. It is built from Experian s UK Consumer Dynamics Database and uses a total of 400 data variables. Mosaic operates at two levels Groups and Types. There are 15 Groups, which are then sub-divided into 69 Types. The table and map presents the distribution of North Warwickshire s households across the Groups, and clearly illustrates the diversity across the Borough. Mosaic Groups, by district and borough, 2010 Percentage of households in Mosaic Groups North Warwickshire Total All Groups 26,727 A - Residents of isolated rural communities 6.2% B - Residents of small and mid-sized towns with strong local roots 19.0% C - Wealthy people living in the most sought after neighbourhoods 0.8% D - Successful professionals living in suburban or semi-rural homes 13.6% E - Middle income families living in moderate suburban semis 11.6% F - Couples with young children in comfortable modern housing 4.0% G - Young, well-educated city dwellers 0.4% H - Couples and young singles in small modern starter homes 4.1% I - Lower income workers in urban terraces in often diverse areas 2.7% J - Owner occupiers in older-style housing in ex-industrial areas 13.0% K - Residents with sufficient incomes in right-to-buy social houses 12.4% L - Active elderly people living in pleasant retirement locations 2.0% M - Elderly people reliant on state support 6.5% N - Young people renting flats in high density social housing 0.9% O - Families in low-rise social housing with high levels of benefit need Source: Experian, Warwickshire Observatory, % 5

7 Economic Performance To compare levels of wealth and prosperity in local economies, a relative measure of performance is needed. The common indicator for this is GVA per employee or per head of population (total GVA divided by the number of people living in that area). Official GVA figures are not available at District/Borough level, however, estimated GVA per head figures are available from the Centre for International Competitiveness released in The table below presents the estimated GVA per head for each area for 2007, and their rank when compared to all 380 Local Authority Districts in the UK. As shown in the Coventry and Warwickshire Economic Assessment, an equation can be created that identifies the relative contribution of each of these four factors to local GVA per head and how these lead to the variation (positive or negative) from the national average GVA per head figure. See the diagram below: Explaining variation in local GVA per head (2007) C&W Estimated GVA per head, by District and Borough, 2007 Area GVA per head (2007) Rank (out of 380) North Warwickshire 23, Nuneaton and Bedworth 13, Rugby 18, Stratford-on-Avon 20, Warwick 24, Warwickshire 19,963 n/a where a rank of 1 is the best performing local authority district and 380 is the worst performing local authority district. Warwick Stratford Rugby N&B North Warks Coventry Warwickshire Log of differential with England Productivity Commuting Employment rate Activity rate Overall There is significant variation across the County, with Warwick and North Warwickshire performing well in the top 20% of all local areas in the UK, while Nuneaton and Bedworth performs relatively poorly, in the bottom 20%. It is important to take into account that these figures relate to 2007 and therefore do not take into account the impact of the recession. Employment rate the proportion of people of working age in an area that are in employment. Generally the more people in employment, the more output is created: 6

8 Those in employment and those claiming unemployment benefits People in employment* (Jan 2010 Dec 2010) People claiming JSA (July 2011) Number % Number % North Warwickshire 29, , Nuneaton and Bedworth 54, , Rugby 41, , Stratford-on-Avon 57, , Warwick 69, , Warwickshire 253, , *Source: ONS annual population survey, numbers are for those aged 16 and over, % are for those aged Source: ONS Seekers Allowance Claimants, % is a proportion of resident population of area aged North Warwickshire has a high employment rate % of its working age population was in employment in the period January to December This is above the Warwickshire average and only falls behind Stratford-on-Avon in the County. This employment rate is higher than the equivalent regional (67.5%) and national (70.3%) figures. Commuting the ratio between the number of jobs filled in an area and the number of people from that area that are in employment. Therefore, high inward commuting takes place when the workforcebased labour is larger than the resident-based labour force. Areas that experience strong levels of in-commuting will naturally have higher levels of GVA per head as more output is being generated compared to the relatively smaller resident population. As a result of in-commuting, most large cities/urban areas generally have higher levels of GVA per head while rural areas generally have lower levels. Numbers of employees and jobs in Warwickshire Number of Employees Number of jobs (April 2010 March 2011) (2010) North Warwickshire 27,600 42,000 Nuneaton and Bedworth 48,700 43,000 Rugby 36,900 46,000 Stratford-on-Avon 47,500 71,000 Warwick 62,400 88,000 Warwickshire 223, ,000 Source: ONS annual population survey, ONS jobs density. Figures may not sum due to rounding. One of the reasons that can explain the high GVA per head figure in North Warwickshire is that there are more jobs in the Borough than employees i.e. there are more people generating economic wealth in the Borough than those who live there. If there are more jobs than people (as shown above) the Borough faces high levels of in-commuting and this tends to result in higher GVA per head figures as a large amount of wealth is divided by fewer people as the resident working age population is smaller than the number of jobs in the Borough. Between 1981 and 1991, North Warwickshire experienced the lowest rate of jobs growth in Warwickshire (6%), but during the 1990s the area enjoyed a period of substantial employment growth: nearly 5,400 jobs were added between 1991 and 2001, proportionately the fastest rate of growth in the County (22%). However, local people have not necessarily benefited from this job creation. Despite the creation of over 5,000 jobs, over ten years, the number of local residents employed within the 7

9 Borough increased by only 315 this represents just 6% of the net employment growth. This growth can be explained by North Warwickshire seeing significant investment in two large employment sites (Hams Hall and Birch Coppice) over the past 10 years, which has led to strong growth particularly in the transport and distribution sector. Some of the economic output generated in these areas is particularly high because of the nature of the businesses in the area. Activity rate measures the proportion of the population that is participating in the labour force. Areas that have high levels of worklessness and economic inactivity and areas that have a relatively older or younger population have lower participation rates, which in turn, depress levels of economic output. 64.1% of North Warwickshire s population is of working age. This is similar to the national average (64.7%) and slightly above the County equivalent (63.4%). North Warwickshire has an economic inactivity rate of 21.6% of the resident working age population. Again, this compares similarly to the Warwickshire figure (21.7%) and is lower than the national figure (23.8%). Factors behind falling productivity Productivity levels in Warwickshire in comparison with England have been falling over the past few years (see Coventry and Warwickshire Economic Assessment for more detail). The lack of productivity across the County is one of the major factors in explaining the variation in local GVA per head and we need to understand what affects productivity in order to influence it. There are a number of factors that affect productivity which are considered below: A dynamic business base a flexible and adaptive economy is likely to be more productive, so new business start up rates are important. However, it is also important that businesses grow in size as larger, established businesses are more likely to generate significant employment and productivity growth. Between , the total stock of active enterprises in North Warwickshire has increased by 7.1% to 2,800 active enterprises in This is lower than the Warwickshire (9.8%) and national (8.2%) equivalents but higher than the regional figure (6.2%). The relatively poor business growth in North Warwickshire compared to the county and region is one of the primary reasons behind poor productivity. However, as the graph shows 2009 has seen a net loss of active enterprises with more deaths than births in enterprises across all Warwickshire s Districts and Boroughs. 8

10 Net enterprise growth (births deaths) Changes in North Warwickshire economy: employment by sector in 1998 and I : Transport, storage and communication 200 D : Manufacturing Net flow (birth - deaths) North Warwickshire Nuneaton and Bedworth Rugby Stratford-on-Avon Warwick Impact of Recession? G : Wholesale and retail trade K : Real estate, renting and business activities H : Hotels and restaurants F : Construction M : Education N : Health and social work O : Other community/social/personal service activities Source: ONS Business Demography, 2009 A : Agriculture, hunting and forestry J : Financial intermediation Percentage in employment Sectoral mix North Warwickshire has seen significant growth in the transport, storage and communication sector over the past 10 years as well as growth in the education and construction sectors. North Warwickshire has a clear locational advantage in terms of transport and distribution given its central position and good access to the strategic transport network. North Warwickshire has seen a particularly strong growth in larger size businesses and this can probably be explained through the Hams Hall and Birch Coppice sites. Source: ABI The sectors which North Warwickshire tends to be strong in (transport and communication, manufacturing, wholesale & retail trade) are mixed in terms of how productive they are as sectors. Transport, storage and communication is the sector which has seen the largest growth over the past 10 years and accounts for nearly a quarter of employment in the Borough. Within this sector, there is a mix of high and low level jobs and this is predominantly classed as mid-table in terms of productive sectors. This is similarly the case with manufacturing and the majority of jobs that fall into the wholesale and retail trade sector will be low value in terms of productivity. 9

11 Investment investment in capital and labour will generally increase business productivity and physical investment in employment land and sites will generate opportunities for business and productivity growth. Physical investment in land and premises is also a strong driver of economic and productivity growth. The strong growth of North Warwickshire s economy over the past ten years (business stock increased by 23%, employment increased by 25%) and the second highest GVA per head rated in the county can largely be attributed to the development of two large employment sites in the Borough Birch Coppice and Hams Hall (the latter of which includes BMW s engine plant). Skilled workforce - higher skill levels allow workers to generate new ideas and adapt to the changing economic environment. Without access to a skilled workforce, UK businesses will find it increasingly difficult to compete and innovate and employment opportunities for the lowest skilled will continue to decline. Achieving a world class skills base has been identified as essential for future economic success and social justice. Levels of qualification held by resident working age population, 2009 NVQ4+ No Qualifications North Warwickshire Nuneaton and Bedworth Rugby Stratford-on-Avon Warwick Warwickshire West Midlands England and Wales Source: Annual Population Survey, National Statistics Crown Copyright Although North Warwickshire has shown considerable improvement since 2006, the proportion of the working age population educated to degree level is well below the county and national averages. Conversely, the same is true for the high proportion of residents with no qualifications. Between 2008 and 2009 the proportion of working age residents qualified to degree level or above dropped in the borough, with North Warwickshire exhibiting the largest decrease of 8.8 percentage points. The most common measure of skills is qualifications. Statistics on the qualifications held by residents in any given area are collected as part of the Annual Population Survey (APS). Smaller sample sizes at District/Borough level mean these results must be treated as broad estimates only. 10

12 GCSE Attainment at District/Borough level, A*-C grades including District or Borough GCSE English & Mathematics North Warwickshire 40% 46% 48% Nuneaton & Bedworth 42% 44% 47% Rugby 53% 54% 62% Stratford-on-Avon 61% 61% 65% Warwick 57% 58% 63% Warwickshire 51% 53% 57% National 48% 51% 55% In terms of GCSE attainment, North Warwickshire has improved over the last two years, mirroring the trend seen across the rest of the county and nationally. However, GCSE attainment in the Borough remains well below the Warwickshire average with 48% of pupils achieving 5+ GCSEs grades A* - C including England and Maths compared to 57% in Warwickshire in Indices of Deprivation Skills Sub-Domain The Indices of Deprivation 2010 have been released this year, which provides an overall deprivation score for each lower layer SOA in the country. One of the indicators used for examining deprivation is an education, skills and training domain, which is calculated using a skills sub-domain. The skills sub-domain provides the proportion of working age adults aged with no or low qualifications. Analysing the skills sub-domain provides us with an analysis at a lower geographical level, allowing us to identify possible pockets of low-skilled areas that may have otherwise not been identified, and provides a national comparison. Within the 38 SOAs in North Warwickshire, 16 are ranked within the top 30% of low-skilled working populations in the country in Four SOAs in North Warwickshire are in the top 10% most deprived nationally on this domain, these are Atherstone South & Mancetter SOA, Atherstone North SOA, Atherstone Central SOA and Dordon SOA. North Warwickshire has the second highest proportion (20%) of SOAs in Warwickshire with low rankings on this domain. Mapping the SOAs in the Borough by skills deprivation shows a strong concentration of adults with no or low qualifications in the north of the Borough and particularly around the urban areas. 11

13 Summary of Economic Performance North Warwickshire performs relatively well in terms of economic performance reflected in its high GVA per head figure. The Borough has a high employment rate and the workforcebased labour is larger than the resident-based labour force and as a result, the Borough benefits from a high level of in-commuting, driving up the GVA per head figures. Economic growth is focused on two sites in the Borough (Hams Hall and Birch Coppice) and particular companies within these sites are more productive and high value than others (BMW engine plant). Productivity is a problem in the Borough and it suffers from lower than average productivity along with the rest of the County. The analysis suggests that the key contributory factors are; the lack of business growth; the structural mix of the economy and the potential under-representation of high growth businesses which have been shown to drive employment and productivity growth; and low qualification levels. 12

14 RESIDENTS Jobseekers (claiming of Jobseekers Allowance): 1,110 Worklessness Worklessness is a less familiar term than unemployment which is used to describe all those of working age who are not employed. There is no official definition for worklessness, but in practice, the term is most often used to describe people of working age who are not employed and are claiming a benefit. This indicator examines the number of people claiming benefits where lack of work is the primary factor in determining eligibility; these benefits include Jobseekers Allowance, Employment and Support Allowance, Incapacity Benefit, and Income Support. Incapacity Benefits and ESA (claimants of Incapacity Benefit): Lone Parents (claimants on Income Support with a child under 16 and no partner): Other claiming income-related benefit (Income Support claimants not included in one of the three groups above): Proportion of the working age population claiming workless benefits 2, The proportion of working-age people claiming workless benefits provides an indication of the health and economic activity levels of residents and, consequently, the impact this has on residents quality of life. This dataset is based on administrative counts provided by the Department for Work and Pensions and is therefore more accurate than survey-based estimates at county and borough or district level. In February 2011, 3,680 working-age people were in receipt of at least one workless benefit in North Warwickshire, 450 less than for the same period in The decrease is predominantly due to a reduction in claims for Jobseekers Allowance (JSA), where numbers have dropped by 310 over a one year period. Employment and Support Allowance (ESA) and Incapacity Benefit claimants comprise the largest proportion of claimants on out of work benefits, which can be shown by disaggregating the worklessness total into the following four benefit groups: Proportion of working-age population claiming workless benefits North Warwickshire Warwickshire West Midlands England and Wales Source: Department for Work and Pensions, NOMIS,

15 Unemployment In terms of unemployment, the Job Seekers Allowance (JSA) claimant count level in August 2011 was 1,058 in North Warwickshire; a rate of 2.7% of the resident working age population. This represents a fall of 17 claimants or -1.6% from the previous month and -4.9% over the past year. North Warwickshire Claimant Count, August North Warwickshire Claimant Count Numbers claiming JSA Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Source: NOMIS,

16 Indices of Deprivation 2010 It is interesting to note that the top 13 most deprived SOAs on the IMD 2007 have all moved up the national rankings and are therefore ranked as being relatively more deprived on the IMD The reason for this apparent decline is not clear. It could be that deprivation levels in the County have remained static in a generally improving national context, or it could be that there has been real absolute decline in some of our neighbourhoods. The fact that the average IMD deprivation score has increased between 2007 and 2010 implies that the latter of these two options is most likely. Table 3: Warwickshire's most deprived SOAs nationally (out of 333 SOAs) Top 10% Top 20% Top 30% 2007 index. Readers should not get distracted by the larger, rural, SOAs as many of the key issues are located within the smaller urban areas each SOA contains approximately the same population. The map below clearly identifies clusters of the most deprived communities in west Nuneaton and smaller parts of Warwickshire s other large towns. The second map is perhaps more interesting, illustrating that all parts of the County have some neighbourhoods that have, in a national context, become relatively more deprived. The most deprived SOA in the County is the Bar Pool North and Crescents in Nuneaton. This area is ranked 492 nd out of the 32,482 SOAs in England on the overall Index of Multiple Deprivation, placing it within the top 2% most deprived SOAs nationally Overall IMD Income Employment Health Education, skills & training Barriers to housing and services Crime Living Environment Source: English Indices of Deprivation, Department for Communities & Local Government The maps below illustrate the geographical pattern of deprivation across the County using the latest results from the IMD The first map shows each SOA s national IMD 2010 ranking and the second indicates whether each SOA has moved up or down the national rankings since the 15

17 IMD 2010 Rankings Change in Rankings

18 Income Resident and workplace earnings over time, North Warwickshire The Annual Survey of Hours and Earnings (ASHE) provides information 30,000 Resident Workplace about the earnings of employees living in an area, excluding the selfemployed. The statistics presented here use the median (the value below which 50% of employees fall) rather than the mean. The median is less influenced by extreme values, particularly relevant here due to the skewed distribution of earnings data. The median indicates the amount earned by a typical worker. Median gross annual earnings 25,000 20,000 15,000 10,000 5,000 The ASHE collects data on earnings by both residence and workplace. Residence-based earnings figures for North Warwickshire include the earnings of all North Warwickshire residents irrespective of whether they work outside the Borough. Workplace-based earnings data represent the wages of those working in the Borough, whether they live in the Borough or outside, and reflect the profile of the types of jobs in the area rather than the jobs held by its residents. The median gross annual earnings (before tax, national insurance or other deductions) for a full-time worker living in North Warwickshire were 24,942 in 2010, which is a small decrease from 25,552 in However, in England and Wales, median earnings have increased by 94 since 2009 to 26,094. The differences between workplace-based and residence-based wages reflect the mobility of better-qualified people. People living in North Warwickshire tend to earn more than people who only work in the Borough Source: Annual Survey of Hours and Earnings Income Deprivation It is beneficial to analyse income deprivation from the Indices of Deprivation 2010 because it enables a thorough comparison of income in North Warwickshire against a national level. Within the 38 SOAs in North Warwickshire, three occupied the top 30% of income deprived areas in the Country in 2010, including two SOAs in the top 20% of income deprived areas in the Country. This remains unchanged from the deprivation rankings in 2007, however, the third SOA has changed between the rankings. New Arley East, Hill Top and Ansley SOA is not longer in the top 30% most income deprived SOAs nationally and has been replaced by Atherstone North St. Georges and Carlyon SOA in the 2010 index. 17

19 Future Issues and Challenges This section provides a brief summary of recent projections and forecasts and their likely impact over the coming years reflecting the baseline position without any policy interventions. See the Coventry &Warwickshire Economic Assessment for more detail: Ageing population - North Warwickshire is expected to see strong growth in its older age groups over the next 25 years this increases the dependency on younger workers and the need to provide services that this population will need (transport, health and housing etc.) Employment growth North Warwickshire is forecast to see strong relative employment growth based on the Cambridge Econometrics forecasting model (+12.4% between ). Occupational change North Warwickshire are expected to see strong growth in higher-level occupations. The Borough is also forecast to see the greatest reductions in lower level skills. Some wider socio-economic challenges that the area will face in the medium to ling-term include: Low carbon economy this creates challenges and opportunities for businesses that the county is well-placed to exploit including low carbon vehicles, environmental technologies and sustainable construction. Increasing globalisation will lead to further restructuring of the local economy towards future growth sectors. Rebalancing of the economy this will present challenges for our residents who have lower levels of qualifications. 18