Economy READER INFORMATION Need Identified Lead Author Date completed Director approved Economy Michelle Jones, Stephanie Tipping To be signed off To be signed off Key needs Economic inactivity The employment rate is currently 67.6% (October 2008-September 2009). North West (NW) and Great Britain (GB) employment rate are 70.3% and 72.9% Worklessness rate 1 for Knowsley is 24% (February 08 to November 2009). NW and GB Worklessness rate is 16.3% and 13.3%. Knowsley s Working age people on Out of work benefits (JSA, Incapacity benefits/employment support allowance, Lone parent and Income support) is 24% (Quarter 3 of 2009). The NW and GB 16.2% and 12.7% An enterprise gap Business density for Knowsley is 369.41 per 10,000 population (2010). The NW and United Kingdom (UK) business density is 646.23 and 677.66. Self employment rates Knowsley self-employed percentage is 7.2. NW and GB is 7.9% and 9.1%. Lower than average incomes The average residents weekly wage is 413.30. NW and GB average weekly wage is 460.20 and 491.00 (2009). High levels of deprivation Knowsley is the 5th most deprived in the Country Knowsley ranks 2 nd on the IMD 2007 for local concentration, a ranking which is based on the number of localised hot spots of deprivation Knowsley has a dependence on the public sector Public sector employment accounted for 32% of total employment in Knowsley in 2007 1 1
Description of where / who the issue affects Economic inactivity Knowsley s employment rate 1 is currently 67.6% (October 2008-September 2009), which is the 2 nd lowest in the Liverpool City Region (LCR) 2. However Knowsley has seen a steady increase in its employment rate from January 2008. Knowsley s employment rate is lower than the NW 70.3% and GB 72.9%. The gap between Knowsley and NW and GB is beginning to close because of Knowsley s employment increasing and the NW and GB rate decreasing. In October 06 to September 07 the gap between the NW and GB was 6.4% and 8.7%, whereas now (October 08 to September 09) it is only 2.7% and 5.3%. People who lack but want paid work divide into two broad groups, those who are Unemployed 3 or Economically inactive 4 but nevertheless want paid work Knowsley has 6,400 unemployed (October 2008 to September 2009)which equates to an unemployment rate of 9.1% (of aged 16 and over), which is higher than the NW (8.3%) and GB (7.4%). Knowsley has 24,400 (October 2008 to September 2009) economically inactive residents, which equates to 26.3% of Knowsley s working age population. This is higher than the NW and GB percentage of 23.2% and 21.1%. Of Knowsley s 24,400, 6,400 want paid work, whilst the remaining 18,000 do not or they are not available for work. The main reasons why people are not generally seeking work or are not available are long term sick or disabled, looking after family/home, students or retired. Knowsley s economical inactivity rate (26.3%) is higher than the NW and GB figure of 6.0% and 5.6%. There is a higher percentage of economically inactive (working age) females (28.8% October 2008 to September 2009) compared to economically inactive (working age) males (23.7%). Knowsley s Worklessness rate (working age people claiming out of work benefits divided by the resident working age population) 23.9% (February 09 to November 09), is the 2 nd highest in the LCR and is higher than the NW (16.4%. November 2009) and the GB (13.40%. November 2009). Knowsley has seen an increase in its Worklessness rate of 1.43% when you compare February 08/November 08 rate to the February 09/ November 09 rate. However the NW and GB has seen a similar increase over the same period (NW +1.63% and GB +1.55%). Northwood, Stockbridge, Kirkby Central, Page Moss and Longview are the top 5 wards in Knowsley who have the highest Worklessness count in February 2009 to November 2009. 1 Employment rate cannot be calculated below a Borough level. 2 Liverpool, St.Helens, Wirral, Sefton, Halton and Knowsley 3 The unemployment rate comprises all those with no paid work who were available to start work in the next fortnight and who either looked for work in the last month or were waiting to start a job already obtained. 4 Differs from unemployment because they are not able to start work immediately or because they are not actively seeking work. For example, Lone parents, sick or disabled, looking after a home or retired 2
Employment is one of the most strongly evidenced determinants of health. People s employment status and the nature of their work have a direct bearing on their physical and mental health and even their life expectancy. This is related to income, a sense of making a valuable contribution and increased social networks gained through work 5 High levels of absenteeism and low productivity because of poor health of employees restricts Economic growth and business sustainability. An enterprise gap The Liverpool City Region, NW and GB saw an overall increasing trend of Business Density from 2001 to 2009, but in 2010, the majority ofl geographies are saw a decrease. In 2010 Knowsley is identified as having a business density rate of 0.67. The North West and Great Britain business density are 0.76 and 0.79. The Jobs Density figures refer to the number of jobs per resident of working age (16-59/64). The figure gives a measure of the mismatch between the supply and demand for labour in an area. For example, a job density of 1.0 would mean that there is one job for every resident of working age. Knowsley saw an increase in business births in 2009. (2008-360 births, 2009-385 births) and it also saw a decrease of businesses deaths (2008-265, 2009-250). Kirkby Central, Prescot West, Prescot East, St Bartholomews and St Gabriels saw the highest amount of business births across Knowsley (during 2009-2010). Knowsley has seen an improvement in its Self employment rate. During April 2007 to March 2008 Knowsley had a self employment rate of 5.7%, which was the lowest of the LCR. Its rate for the period October 08 to September 09 is 7.2% which is the 2 nd highest in the LCR. The NW and GB rate has stayed fairly static so the gap between Knowsley and the NW (7.9% October 08 to September 09) and GB(9.1% October 08 to September 09) has closed. The Knowsley self-employment rate gender spilt (Male 11.1% and Female 3.4%) mirrors the NW (NW = Male 11.6% Female 3.9%) and GB (Male 12.7% Female 5.2%) gender spilt. A low Business Density provides a higher supply compared to labour demand. This would restrict employment opportunities (Employment is one of the most strongly evidenced determinants of health) Enterprise development has a key role to play in poverty reduction. Enterprise development can promote responsible business and sustainable livelihoods for low income and vulnerable households, ensuring that benefits of economic growth are more equitably distributed. 5 London Health Commission Sustainable Local Economies for Health Project 2006 3
Lower than average incomes The average Knowsley residents weekly wage is 413.30 which is 46.90 less than the NW 6 and 77.70 less than the GB 7. It should be noted that the average weekly wage for people who work in Knowsley is 464.90 which is 51.60 higher than the average residents weekly wage. Longview, Stockbridge, Page Moss, Northwood and Kirkby Central are the top 5 most income deprived in Knowsley 8 Males (in full time work) in 2002 were paid 101.40 more than females, the gap has narrowed and the gap now only stands at 67.30. Poor health is one of the major problems associated with low income. However poor health can lead to low income as well. Income and employment impact on living standards, social role and behaviour, which affects health. Parent s income impacts on the children s development of the child s health capital (limiting illness) and income potential (education) High levels of deprivation Knowsley is one of the most deprived local authority areas in the country. Overall the index of Multiple Deprivation (IMD) 2007 ranks Knowsley as the fifth most deprived in the Country an improvement since the IMD 2004 where Knowsley was the third most deprived. Knowsley ranks second on the IMD 2007 for local concentration, a ranking which is based on the number of localised hot spots of deprivation Equality and Diversity 9 People from ethnic minorities, children and lone parent families are more likely to live in a low income household. Age In the UK the proportion of children living in low-income households fell from 34% of all children in 1996/97 to 31% by 2007/08. Nevertheless, children are still much more likely to live in low-income households than adults: 31% compared to 19%. The proportion of UK pensioners living in low-income households fell from 29% of all pensioners in 1996/97 to 18% in 2007/08. Pensioners are now less likely to be living in low-income households than non-pensioners - their rate being a bit lower than that for working-age adults (with dependant children 26% and without dependant children 18%) and much lower than that for children (31%). 6 NW average income is 460.20 7 GB average income is 491.00 8 Based on IMD Income Domain Score 2007 9 Source: www.poverty.org.uk 4
Family type 10 50% (2005/06 to 2007/08) of UK lone parent families are in low income. This is more than twice the rate for couples with children. It is, however, an improvement from 1995/96 to 1997/98 figures of 62%. The rates of low income for the other family types (working-age couples without dependent children 12%, working-age singles without dependent children 25%, and in working-age couples with dependent children 22%) have saw no significant change Ethnicity 39% of UK people from ethnic minorities live in low-income households, twice the rate for White people, 21% (2007/08). This as improved from 1997/98 figures of 47% for ethnic minorities living in low income households. The rate for white people has remained almost the same at 23%. Gender The proportion of all adult UK Women living in low income households is 19% (2007/08), all UK men is only slightly more with a proportion of 21%. However the gap between single men and single women is reversed, with 29% of single women living in low income households, whereas the proportion of single men is lower at 24%. One reason for the gender gap is that single female pensioners and female lone parents are both more likely to be in low-income households than their male equivalents. A second reason for the gender gap is that most lone parents (a group at high risk of being in low income), are women. Nonetheless the gender gap between single men and single women facing low income has decreased from a gap of 12% (1997/98) to 5% (2007/08). This is likely to increase in the future given the Governments proposed cuts. Income inequalities Comparing 1997/98 UK incomes to 2007/08 UK incomes, the bottom 10% poorest incomes did not see a rise in their average incomes, however all other groups did, with the top 10% richest incomes saw the biggest incomes of 39%. In fact the income of the richest 10% is more than the income of all those on below-average incomes (i.e. the bottom five tenths) combined. Low pay by industry In the UK the highest risk of low pay are hotels & restaurants and retail & wholesale with 67% of employees earning less than 7 per hour. 49% of employees in the retail & wholesale sector also earn less than 7 per hour. The lowest risk of low pay is the public sector: admin with only 7% earning less than 7 per hour. 10 All the statistics in this indicator relate to numbers of individuals rather than numbers of families or numbers of households 5
Access to training In 2009 only 9% of UK people who had no qualifications received job-related training whereas 28% of people with qualifications. Also the lower a person's level of educational qualifications, the less likely they are to receive job-related training. The best access to training is in the public sector (42% accessing job related training) whereas Manufacturing, Construction, Retail and wholesale and Hotels and restaurants are all below 20%. The above three points will impact on living standards, social role and behaviour, children s development of the child s health capital (limiting illness) and income potential (education). All of these affect health. Links to other issues / topics Economy and Housing Housing can enhance economic performance and competitiveness but it can also lead to segregation and spatial concentrations of poverty. In turn Economic development has impact on affordability, mortgage interest rates, labour demand and migration of residents. Neither Housing nor Economic development on its own will achieve sustainable development. Economy and employment Economy growth attracts investment and employers to the area. This increases employment opportunities for its residents. Knowsley works with its employers in the borough to provide customised recruitment and training packages to ensure people have the right skills for the job. Also Knowsley needs a skilled healthy workforce to attract employers and investment. Economy and transport Transport infrastructure is crucial for businesses. Transport networks need to reflect the business needs, in order for them to deliver sustainable growth and employment. If the transport infrastructure does not meet the needs of employers, this impacts on businesses productivity and the ability for Knowsley to attract investment. Access, affordability, reliability and punctuality is essential for residents to access work. Economy and the environment The low carbon economy offers a growth market for the economy. However businesses are being put under pressure to reduce their carbon, which requires investment and skills. 6
The image and security of industrial estates can attract inward investment and retain jobs. Economy and Education Education attendance and attainment is essential to create a high skilled workforce. Also staff development by improving training and skills so they can progress and make their employment less susceptible to the economic downturn. Links to existing strategies (incl. policies/services) Knowsley Economic Regeneration strategy Knowsley Employment and skills strategy Knowsley Interim Housing Strategy (Will be replaced by the Knowsley Housing Strategy 2011-2014 Currently in draft form) Local Transport Plan 2. (Will be replaced by Local Transport Plan 3, due to be adopted in April 2011) Unitary Development Plan (Will be replaced by the Local Development Plan in 2012) Knowsley Child Poverty Needs Assessment Knowsley Sustainable Communities Strategy Knowsley Climate Change Strategy Knowsley External Funding Strategy Knowsley's Children and Young People's Strategic Plan Liverpool City Region Strategies Future implications (Modelling / projections) Knowsley has a dependence on the public sector. The Public sector employment accounted for 32% of total employment in Knowsley in 2007. With prediction of major cuts within the sector, job losses can be predicted. This will increase unemployment and the competition for jobs, but also will impact of the public sector workers (stress of job losses and potential lower incomes will impact health) Unfortunately the forecast work of Cambridge Econometrics is now mostly out of date due to recent Government budget cuts and policy changes. However we can predict that manufacturing and the public sector, will face significant employment decline. As stated previously Knowsley current employment 32% of public sector and 19.8% of manufacturing. If Knowsley and the Liverpool City Region do not experience Economic growth in the next 5-10 years the divide between the Liverpool City Region and the rest of the UK will widen. This will increase inequality. At present the most deprived areas in Knowsley are experiencing health inequalities. These health inequalities will hinder the attraction of economic development in the areas of most need. 7
Implementation of targeted initiatives which address clear need will close the gap between deprived and affluent areas. Evidence of what works The Knowsley Apprentice is an innovative and pioneering programme securing employment and training opportunities for young people in Knowsley. It provides local businesses with the opportunity to employ some of the brightest and best talent in the borough in a structured and supportive apprentice programme. This assists Knowsley in creating a more dynamic, well qualified workforce for the future. The council alone has recruited 211 apprenticeships since 2009. The School gate employment support project aims to improve non-working partners awareness and take up of employment or self-employment opportunities. The main link to health would be to increase income levels for Knowsley residents. For example key services would be: Working with employers to encourage and provide training Programmes of action to assist residents to work, training and education Business start up support, including self employment Attracting investment and businesses to the area (Increase business density and job density) Linking areas of deprivation to affluent areas Knowsley has several hard to reach groups and a lack of enterprise culture. These are the core issues that we are trying to address using the above services. This will include targeted support to deprived areas, to narrow the gap between deprived areas and more affluent areas Gaps Local Economic Assessments are currently being developed to identify and address any data/intelligence gaps in provision 8