Stratford-on-Avon Local Economic Assessment Summary. October 2011

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1 Stratford-on-Avon 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 Stratford-on-Avon Warwickshire Sub-region (Cov & Warks) West Midlands England Total Population (2010) 119, , ,700 5,455,200 52,234,000 Population growth ( ) +6.1% +5.1% +4.8% +3.0% +5.2% Number of jobs (2009) 71, , ,000 2,588,000 26,246,000 Jobs growth ( ) +22.4% +16.9% +8.8% 0.0% +4.1% Number of businesses (2009) 7,625 25,035 33, ,550 2,040,150 Growth in number of businesses ( ) +8.5% +9.8% +11.0% +6.2% +8.2% Total GVA growth ( ) % +86.5% +74.6% +99.1% GVA per head* 20,256 (110) 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) 37.8% 36.4% 39.7% 38.0% 42.1% Proportion of Employment in Knowledge Business Industries (2009) 21.8% 17.8% 17.7% 15.1% 19.9% Proportion of employment in public sector (2008) 10.8% 13.8% 15.7% 19.8% 18.6% % of working age people claiming out-of-work benefits (2010) 6.3% 8.7% 10.9% 13.5% 11.8% Average real disposable income (2009) - 16,218-13,722 15,545 Average annual resident earnings (2010) # 26,277 n/a 23,902 26,268 Average annual workplace earnings (2010) 26,080 25,627 n/a 23,838 26,250 # These figures are suppressed as statistically unreliable * 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 & 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 Stratford-on-Avon District is home to 119,000 people. Stratford-on-Avon s population has been growing for the past four decades and the District is now home to Avon has grown at a faster rate than Warwickshire over recent years. The District is estimated to have grown by 6.7% from 2001 to 2010, higher than the equivalent county figure of 5.9%. Population change, Population ( 000s) 23,400 (24%) more people than at the start of the 1970s. Stratford-on- Stratford-on- Avon Change Change % 6.7% 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 Stratford-on-Avon s population pyramid shows that the District has an older age profile when compared with the national average. The District has a lower proportion of children and young adults (aged 0-39 years) compared to the England and Wales average. However, the Borough has higher proportions than the national average in those aged 45 and over, particularly those aged years old. Stratford-on-Avon District population pyramid, 2010 Age Percentage Stratford-on-Avon Males England & Wales Males Stratford-on-Avon Females England & Wales Females 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. 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 Stratford-on-Avon s households across the Groups, and clearly illustrates the diversity across the District. Mosaic Groups, by District and Borough, 2010 Percentage of households in Mosaic Groups Stratford-on- Avon Total All Groups 60,015 A - Residents of isolated rural communities 1.8% B - Residents of small and mid-sized towns with strong local roots 7.2% C - Wealthy people living in the most sought after neighbourhoods 9.2% D - Successful professionals living in suburban or semi-rural homes 13.6% E - Middle income families living in moderate suburban semis 14.6% F - Couples with young children in comfortable modern housing 10.7% G - Young, well-educated city dwellers 14.6% H - Couples and young singles in small modern starter homes 6.3% I - Lower income workers in urban terraces in often diverse areas 0.7% J - Owner occupiers in older-style housing in ex-industrial areas 5.2% K - Residents with sufficient incomes in right-to-buy social houses 3.6% L - Active elderly people living in pleasant retirement locations 5.5% M - Elderly people reliant on state support 3.9% N - Young people renting flats in high density social housing 1.5% 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. districts. 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. 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) Estimated GVA per head, by District and Borough, 2007 C&W Area GVA per head (2007) Rank (out of 380) North Warwickshire 23, Nuneaton & 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. 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 & Bedworth performs relatively poorly, in the bottom 20%. Stratford-on-Avon falls behind North Warwickshire and Warwick in terms of GVA per head and is ranked 110 th out of 380 local authority Warwick Stratford Rugby N&B North Warks Coventry Warwickshire Log of differential with England Productivity Commuting Employment rate Activity rate Overall 6

8 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: 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. 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 & 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 Stratford-on-Avon District has the highest employment rate in the county % of its working age population was in employment from January - December 2010 compared to 72.7% for Warwickshire. This 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 Numbers of employees and jobs in Warwickshire Number of Employees (April 2010 March 2011) Number of jobs (2010) North Warwickshire 27,600 42,000 Nuneaton & 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 GVA per head figure in Stratfordon-Avon is that there are more jobs in the District than employees i.e. there are more people generating economic wealth in the District than those who live there. If there are more jobs than people (as shown above) the District 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 District. Between 1981 and 2001, the number of jobs in Stratford-on-Avon increased by 44% (+16,000) proportionately more than anywhere else in the County. Stratford-on-Avon also experienced the fastest rate of growth in its labour supply, 25%. 7

9 Unsurprisingly, the number of in-commuters increased from 7,200, to nearly 19,000 in the same period (+163% faster than any other district) as people living outside the district travelled in to take advantage of the new employment opportunities. In 1981, 20% of the people employed in Stratford lived outside of the district; by 2001 this had risen to 36%. 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. 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: 60.6% of Stratford-on-Avon s population is of working age. This is below the national average (64.8%) and the County equivalent (63.4%). Stratford-on-Avon has an economic inactivity rate of 18.5% of the resident working age population. This is below the Warwickshire figure (21.7%) and is considerably lower than the national figure (23.8%). 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 Stratfordon-Avon District has increased by 8.5% to 7,625 active enterprises in This is lower than the Warwickshire (9.8%) but higher than the national (8.2%) and regional figures (6.2%). The relatively poor business growth in Stratford-on-Avon over the past five years compared to the county is one of the factors that inhibit 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 Stratford-on-Avon s economy: employment by sector in 1998 & K : Real estate, renting and business activities G : Wholesale and retail trade 200 D : Manufacturing M : Education Net flow (birth - deaths) North Warwickshire Nuneaton and Bedworth Rugby Stratford-on-Avon Warwick Impact of Recession? H : Hotels and restaurants N : Health and social work O : Other community/social/personal service activities F : Construction I : Transport, storage and communication J : Financial intermediation A : Agriculture, hunting and forestry L : Public administration and defence Source: ONS Business Demography, 2009 Source: ABI Percentage in employment Sectoral mix Stratford-on-Avon has seen significant growth in the real estate, renting and business activities sector over the past 10 years as well as growth in the education and health and social work sectors. In 1998, real estate, renting and business activities accounted for over 15% of employment, over the past 10 years, this has increased to 22% of employment. Stratford-on-Avon District has seen significant growth in higher value industries over the past 10 years, particularly in the fields of professional business services, computing and software, and high-value engineering and manufacturing. The sectors which Stratford-on-Avon tends to be strong in (real estate, renting and business activities, wholesale and retail trade and manufacturing) are mixed in terms of how productive they are as sectors. Jobs in the real estate, renting and business activities sector predominantly tend to be higher level, productive jobs and this goes some way to explaining Stratford-on-Avon s relatively high productivity figure. Wholesale and retail trade accounts for just over 15% of employment in the District and the majority of jobs in this sector tend to be low value in terms of productivity and will generally be low skilled. The manufacturing sector has a mix of high and low level jobs depending on the type of manufacturing although and this sector is predominantly classed as mid-table in terms of productive sectors. 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. Stratford-on-Avon has also seen significant investment in sites, which has helped drive growth and prosperity in the District. Development sites such as Stratford Enterprise Park backed by DCS Europe as well as the Gaydon site through Jaguar Land Rover and Aston Martin reflect this investment. 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. 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. 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 The proportion of working age residents holding a NVQ4 level qualification or above in Stratford-on-Avon District rose by 5.3 percentage points between 2008 and 2009 and sits just behing Warwick District both in terms of those residents with a degree and conversely, those with no qualifications. Stratford-on-Avon District compares favourably with the regional and national averages for those qualified to NVQ4 level and those with no qualifications. 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, Stratford-on-Avon has improved over the last two years, mirroring the trend seen across the rest of the county and nationally. GCSE attainment in the District remains the highest in the county with 65% 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 71 SOAs in Stratford-on-Avon District, two are ranked within the top 30% of low-skilled working populations in the country in Both SOAs are in the top 10-20% most deprived nationally on this domain Alcester North & Conway and Southam West SOAs. Mapping the SOAs in the District by skills deprivation shows a scattering of adults with no or low qualifications predominantly around the District s urban areas. 11

13 Summary of Economic Performance Stratford-on-Avon falls behind North Warwickshire and Warwick in terms of GVA per head in the county however; it falls within the top 30% of local authority districts when comparing the District at a national level (a rank of 136 out of 380 local authorities). Stratford-on-Avon District has the highest employment rate in the county % of its working age population was in employment from January - December 2010 compared to 72.7% for Warwickshire. The District s workforce-based labour is larger than the residentbased labour force and as a result, the District benefits from a high level of in-commuting. Stratford-on-Avon District has seen significant growth in higher value industries over the past 10 years, particularly in the fields of professional business services, computing and software, and high-value engineering and manufacturing. Despite Stratford-on-Avon having a more modern and diversified economy, the District still suffers from poor productivity - a common issue across the county. Although Stratford-on-Avon has a skilled workforce, more business growth is needed in the District particularly to increase high growth businesses which have been shown to drive employment and productivity growth. 12

14 RESIDENTS Jobseekers (claiming of Jobseekers Allowance): 1,130 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, 4,630 working-age people were in receipt of at least one workless benefit in Stratford-on-Avon District, 460 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 400 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 Stratford-on-Avon 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 1,105 in Stratford-on-Avon; 1.5% of the resident working age population. This represents a rise of 34 claimants or 3.2% from the previous month and a fall of -4.5% over the past year. Stratford-on-Avon consistently has the lowest unemployment rate in the county. Stratford-on-Avon District Claimant Count, August Numbers claiming JSA Stratford-on-Avon Claimant Count 0 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, Stratford-on-Avon The Annual Survey of Hours and Earnings (ASHE) provides information 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 31,000 30,000 29,000 28,000 27,000 26,000 25,000 24,000 Resident Workplace The ASHE collects data on earnings by both residence and workplace. Residence-based earnings figures for Stratford-on-Avon include the earnings of all Stratford-on-Avon residents irrespective of whether they work outside the District. Workplace-based earnings data represent the wages of those working in the District, whether they live in the District 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 Stratford-on-Avon District in 2010 were not available as the survey results were statistically unreliable. However, the figure for 2009 was 28,472. 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 Stratford-on-Avon earn more than those people who only work in the District. 23,000 22, 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 Stratford-on-Avon against a national level. Within the 71 SOAs in Stratford-on-Avon, one occupied the top 30% of income deprived areas in the Country in There are the same number of SOAs in the top 30% most deprived rankings in 2010 than in The most income deprived SOA in the District is Alcester North & Conway. 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 Stratford-on-Avon 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 & housing etc.) Employment growth will have a strong emphasis on the District. Warwick and Stratford-on-Avon Districts will account for nearly 20% of all employment growth to The population and employment growth is likely to put pressure on housing, employment supply and transport networks Occupational change The District is expected to see strong growth in higher-level occupations. 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

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