The Impact of Recession on Northern City Regions

8/14/2019 The Impact of Recession on Northern City Regions

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WWW.IPPR.ORG/NORTH

TheImpactoftheRecessiononNorthern

City-RegionsByTonyDolphin

October2009

ippr2009


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ipprnorth|TheImpactoftheRecessiononNorthernCity-Regions2

ipprnorth,theNewcastle-basedofficeoftheInstituteforPublicPolicyResearch,produces

far-reachingpolicyideas,stimulatingsolutionsthatworknationallyaswellaslocally.These

areshapedfromourresearch,whichspanseconomicdevelopment,regeneration,publicservicesanddevolutionaswellasastrongdemocraticengagementstrandwhichinvolvesa

widerangeofaudiencesinpoliticaldebates.

ipprnorth,2ndFloor,20CollingwoodStreet,NewcastleUponTyneNE11JF

Tel+44(0)1912339050|www.ippr.org/north

RegisteredCharityNo.800065

ThispaperwasfirstpublishedinOctober2009.ipprnorth2009

Aboutipprnorth

ThispaperwasoriginallypreparedaspartoftheevidencebasefortheMakingCityRegions

WorkforDeprivedCommunitiesproject,amajorprogrammeofworkbeingundertakenby

ipprnorth,withtheJosephRowntreeFoundationandtheNorthernWay.Itaimsto

understandwhy,earlierinthisdecade,someareaswithincity-regionsintheNorthof

Englandremaineddeprivedevenwhenthesurroundingeconomywasperformingstrongly;to

explorehowdeprivedareascanbebetterlinkedtoareasofeconomicopportunity;to

considertherolesoflocal,city-regional,regionalandnationalbodiesandtoinformthenext

generationofpoliciestargetedatdeprivedcommunities.

Theviewsexpressedinthispaperarethoseoftheauthorandnotnecessarilythoseofippr

north,theJosephRowntreeFoundationortheNorthernWay.

Abouttheproject


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ThispaperlooksatthegeographicaleffectoftherecessionacrosstheUnitedKingdomand,

inparticular,athowithasaffecteddeprivedcommunitiesinthecity-regionsintheNorthof

Englandandthepeoplewholiveinthem.Italsoofferssomethoughtsaboutthechallengesthesecommunitieswillfaceinthenextfewyears.

Unemploymentdatagivethemostup-to-datepictureoftheeffectoftherecessionandalso

representareasonableshorthandmeasureofdeprivation.Analysisofthesedatasuggests

thatasageneralruleunemploymenthasincreasedmostsinceMarch2008inthoseareas

whereitwasalreadythehighest.ThisistrueforlocalauthoritiesacrosstheUKandalsofor

wardswithintheeightnortherncity-regions.

Althoughtherearespecialfactorsatplayinsomecases,itappearsthatthoseareaswhere

therehasbeenthelargestincreaseinunemploymenthaveabove-averagerelianceon

employmentinmanufacturing,inparticularinthoselowvalue-addedmanufacturing

industriesthataremostvulnerabletocompetitionfromlow-costcompaniesinemergingeconomieselsewhereintheworld.Unemploymentwasalreadyhighintheseareasbecause

companieswereclosingandcuttingcostsasaresultofthiscompetition.Therecessionhas

acceleratedtheprocess.

Otheranalysisshowsthathousing-ledregenerationeffortsinnortherncity-regionshave

beenadverselyaffectedbytherecessionandthatsomecity-regionsarelikelytobebadlyhit

whentheGovernmentstartstocutpublicspending.

Fordeprivedcommunitiesinthenortherncity-regions,thiscould,therefore,representa

triplewhammy.Itisimperativethateffortsaremadetoexplorehowdeprivedareascanbe

betterlinkedtoareasofeconomicopportunity,toconsidertherolesoflocal,city-regional,

regionalandnationalbodiesandtostarttodevelopthenextgenerationofpoliciestargeted

atdeprivedcommunities.

Executivesummary


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Introduction

ThispaperlooksatthegeographicaleffectoftherecessionacrosstheUnitedKingdomand,in

particular,athowithasaffecteddeprivedcommunitiesintheeightnortherncity-regions 1 and

thepeoplewholiveinthem.Italsoofferssomethoughtsaboutchallengesthesecommunities

willfaceinthenextfewyears.Muchoftheanalysisisbasedonunemploymentdatabecause

theyofferthemostup-to-datepictureoftheeffectsoftherecession.Worklessnessis,inany

case,areasonableshort-handproxyforanareaslevelofeconomicdeprivation.

ThepaperwaswrittentoinformipprnorthsMakingCityRegionsWorkforDeprived

Communitiesproject,whichisexaminingwhy,earlierinthisdecade,someareaswithin

northerncity-regionsremaineddeprivedevenwhenthesurroundingeconomywasperforming

strongly.Theaimistodevelopthenextgenerationofpoliciestargetedatdeprived

communities2.Itshould,however,beofinteresttoanyoneconcernedwithhowtherecessionis

affectingdeprivedcommunitiesinthecitiesofnorthernEngland.

Thepaperlooksathowthecurrentrecessionhasdevelopedandatearlyindicationsofits

effectonthenortherncity-regions.Itshowsthat,asageneralrule,thegreatertheeconomic

problemswereinanareawhentherecessioncommenced,thebiggertheeffectofthe

recessionhasbeen.Thisisgoingtomakethetaskofthosechargedwithrevivingdeprived

communitiesintheseregionsevenharderthanitalreadywas.

Backgroundtothecurrentrecession

Thecurrentrecessionwascaused,primarily,byaglobalcreditcrunch.Bankswereforcedto

cutbacktheirlendingaftermakinghugelossesbettingonfinancialinstrumentsbackedby

theUSmortgagemarket.Asaresult,credit-worthycompanieswereunabletoborrowthefundstheyneededtomakeinvestmentsorremainsolvent;workerswerelaidoff;business

andconsumerconfidencefell;spendingwascutbackandtheglobaleconomyplungedinto

recession.3

IntheUK,outputbegantocontractinthesecondquarterof2008.Sofartherecessionhas

lastedfivequartersandoutput(realGDP)isdown5.6percentfromitspeak.Thisisthe

fastestfallinoutputintheUKsincethe1930s.

1.TheseareCentralLancashire,HullandHumberPorts,Leeds,Liverpool,GreaterManchester,Sheffield,

TeesValleyandTyneandWear.ForthefullstructureofthecityregionsseeAppendix1,p19.

2.FormoredetailsonMakingCity-RegionsWorkforDeprivedCommunities,visitipprnorthswebsite:

www.ippr.org/ipprnorth3.Appendix2containsamoredetaileddiscussionofthenatureofthisrecessionandhowtheeconomy

mightrecover(p21).

TheImpactoftheRecessiononNorthernCity-Regions

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-4

-2

0

2

4

6

1984 1987 1990 1993 1996 1999 2002 2005 2008

%

Year

Figure1.UKreal

GDPgrowth(%

changeonyear)

Source:Officefor

NationalStatistics,

www.statistics.gov.

uk/instantfigures.

asp


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Becausetherecessionwascausedbyacreditcrunch,ratherthanbyageneraltighteningof

economicpolicyinordertoreduceinflation,manycommentatorssuggestedthatitwouldbe

differentfromotherrecessionsexperiencedintheUKsincetheSecondWorldWar.In

particular,theoriginsoftherecessioninthefinancialsector,andespeciallyintheCityof

London,ledmanytopredictthatitwouldbeawhitecollarrecessionandthatitsbiggesteffectwouldbeintheSouthofthecountry.

Thisisnotturningouttobethecase.Allpartsoftheeconomyhavebeenaffectedbythe

downturn,withtheconstructionandmanufacturingsectorsexperiencingthebiggestfallsin

output(14percent,comparedwithanalmost6percentdropinaggregateoutput).

Recentdatareleasesshowsomesignsofstabilisationinconsumerandbusinessconfidence

andthevastmajorityofforecastersthinkthattheworstoftherecessionisbehindus.

However,thepathofanyrecoveryisextremelydifficulttopredict.Historicalanalysis

suggeststhatrecessionscausedbycreditcrunchestendtobefollowedbyrelativelyweak

recoveriesandthiscouldwellturnouttobethecase.Householdbalancesheetshavebeen

weakenedbyfallinghouseprices,sopeoplearesavingmoreandspendingless.Bank

balancesheetsareinneedoffurtherrepair,solendingwillbeslowtoreturntoformerlevels.

And,after2010,departmentalpublicspendingislikelytobecutinrealtermsasthe

Governmentlookstoreduceitshugefiscaldeficit.Themostlikelyoutcomeforthenextfew

years,therefore,appearstobeareturntoeconomicgrowth,butatadisappointingrate.

Theimpactoftherecessiononthelabourmarket

Atthisstage,thedatathatprovidethebestinformationabouttheimpactoftherecession

arelabourmarketdata.Theseofferevidenceoftherecessionsscaleandeffect

geographicallyandondifferentgroups,forexampleaccordingtooccupationorskilllevel.

Andformostpeople,employmentiswhatreallymatters.

Sofar,thefallinoutputseenoverthelastyearhasnotledtoasbigafallinemploymentas

mighthavebeenfeared.TotalemploymentintheUKpeakedat29,541,000inthethree

monthsMarchtoMay20084.Fifteenmonthslater,inJunetoAugust2009,ithaddropped

4.TheOfficeforNationalStatisticsreportsemploymentdatasourcedfromtheLabourForceSurveyas

threemonthaveragesbecauseofvolatilityinthemonthlynumbers.

-16 -12 -8 -4 0 4

Gross domestic product

Government & other services

Business services & finance

Transport storage & communication

Distribution, hotels & catering

Construction

Electricity, gas & water supply

Manufacturing

Mining & quarrying

Agriculture, forestry & fishing

%

Figure2.Change

inoutputby

sector,2008Q1

to2009Q2(%)

Source:OfficeforNationalStatistics


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by589,000,or2percent,to28,952,000.Whilethisisabigfall,outputcontractedbymore

than5.5percentoverthesameperiod,soitcouldhavebeenmuchworse.

Therearetwopossibleexplanationsfortherelativelymodestdeclineinemploymentoverthe

lastyearorso:

1.TheoptimisticviewisthattheUKslabourmarketisnowmoreflexiblethanitwas,

enablingcompaniestocopewiththedownturninwaysthatdonotinvolvemaking

redundancies.Thereisplentyofanecdotalevidencetosupportthisview.Accordingtoa

surveyofover1,600workersfortheindependentKeepBritainWorkingcampaign,more

thanhalfofallUKworkershaveexperiencedacutinpay,areductioninhoursoraloss

ofbenefitssincetherecessionbegan(KeepBritainWorking2009).2.Thepessimisticviewisthatthedownturnhasbeensoquickandsoseverethatithas

takencompaniesbysurprise.Theyhavebeenslowtoreactsofarbutemploymentwill

becutfurtherintherestof2009andin2010,evenifoutputbeginstostabilise.Thisis

whathappenedduringtherecessionoftheearly1980stheonlyoneexperiencedby

theUKinthelast70yearsthatwasonacomparablescaletothecurrentrecession.

Meanwhile,withinthelabourmarket,anumberoftrendsareapparent:

Therecessionishittingmenharderthanwomen.Maleemploymentwasdownby2.5percentovertheyeartoJuneAugust2009,comparedwithadropof0.5percentinfemale

employment.

Therecessionishittingtheyounghardest.Overthelastyear,thenumberof16to24yearoldsinemploymenthasfallenby7.6percentandyouthunemploymentisatits

highestlevelfor15years.

Joblosseshavebeenconcentratedinthreebroadsectorsoftheeconomy:manufacturing(269,000jobslostsinceMarch2008,representingadeclineof8.5per

cent),financeandbusinessservices(260,000,3.9percent)anddistribution,hotelsand

restaurants(237,000,3.4percent).Meanwhile,thenumberofjobsineducation,health

andpublicadministration(whichcoversboththepublicandprivatesectors)has

increasedby216,000(2.7percent).

Inalltheserespects,thisrecessionisturningouttobesimilartopreviousones,eventhoughithasadifferentcause.

-6

-4

-2

0

2

4

6

197 8 198 0 198 2 198 4 198 6 198 8 199 0 199 2 199 4 199 6 199 8 2000 2002 200 4 200 6 200 8

Real GDP

Employment

%

Year

Figure3.UKreal

GDPand

employment

growth(%

changeonyear)Source:Officefor

NationalStatistics


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Theregionalandlocalimpactoftherecession

Atthisstage,themostcomprehensiveandup-to-datedataontheeffectoftherecessionat

aregionalandlocallevelrelatetothelabourmarket.TheseshowthatsinceMarch2008(the

mostrecentlowpointforunemploymentintheUK)theunemploymentratebasedon

numbersclaimingJobseekersAllowance(JSA)hasincreasedmostinNorthernIreland,theNorthEast,theWestMidlandsandYorkshireandtheHumber.5

Atalocallevel,therehasbeensubstantialvariationindevelopmentsinthelabourmarket.In

22localauthoritydistrictsunemploymenthasincreasedby3percentagepointsormore,

whilein21othersithasincreasedbylessthan1percentagepoint,andinoneinstanceithas

fallen.(SeeTable2,nextpage.)DataatNUTS6 Level2showthatthebiggestincreasesinunemploymentrateshavebeenin

theWestMidlands,NorthernIreland,SouthandWestYorkshire,theEastRidingandNorth

Lincolnshire,GreaterManchester,theTeesValleyandMerseyside.Thesmallestincreasesin

unemploymentrateshavebeeninruralareas,particularlyinCumbria,NorthYorkshire,East

AngliaandtheWestCountry.

5.Mostoftheanalysisinthispaperisbasedonunemploymentasmeasuredbytheclaimantcountbecauseitprovidesthemostup-to-dateanddetailedinformationonthegeographicaleffectofthe

recession.However,thisdoesmeanthattheanalysisisonlypartial,inthesensethatitexcludesthoseon

otherout-of-workbenefits,orwhoarelookingforajobbutnotclaimingbenefit.Morecomprehensive

figuresoneconomicinactivity,whentheyareavailable,maytellaslightlydifferentstory.

6.NUTSistheacronymforNomenclatureofTerritorialUnitsforStatisticsthestandardgeographicalunits

intowhichtheUKisdividedforstatisticalanalysis.Thereare37countiesorgroupsofcountiesatNUTSLevel2and133upper-tierauthoritiesandgroupsoflower-tierauthoritiesatNUTSLevel3intheUK.

Table1:Regionalunemploymentrates(basedonJSAclaimants)

Region Unemploymentrate(%) Change(pp*)

March2008 Sept2009

NorthernIreland 2.7 6.2 3.5

NorthEast 3.9 7.3 3.4

WestMidlands 3.4 6.7 3.3

Yorkshire&Humber 2.9 6.0 3.1

Wales 2.8 5.8 3.0

NorthWest 3.0 5.8 2.8

EastMidlands 2.4 5.1 2.7

East 1.9 4.3 2.4

Scotland 2.5 4.7 2.2

SouthWest 1.3 3.5 2.2

SouthEast 1.4 3.5 2.1

London 2.6 4.7 2.1


*pp=percentagepoint

Note:TheratesarebasedonthenumberofJSAclaimantsasaproportionoftheworkforcethestandardway

ofpresentingunemploymentrates.DatabylocalauthorityandatNUTSLevel2and3arederivedfromthe

OfficeforNationalStatisticsnomisdatabase,whichcalculatesunemploymentratesusingthepopulationof

workingageasthedenominator(sogivinglowerunemploymentrates).


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AtNUTSLevel3therearesomeareasoutsidetheworstaffectedregionswheretherehave

beenbigincreasesinunemployment.Indeed,oneofthelargestincreasesinunemploymentsinceMarch2008isinSwindon,whereitisupfrom1.7to5.1percent.Thisreflectsthe

importanceforemploymentoftheHondafactoryandamajorWoolworthsdistribution

centre;redundanciesweremadeatHonda,whichshuttemporarily,whileWoolworthshas

nowclosed.However,thevastmajorityofareaswiththebiggestincreasesinthe

unemploymentrateareintheWestMidlandsandYorkshire,includingWalsall,

Wolverhampton,DudleyandSandwellintheformerandKingstonuponHull,Barnsley,

DoncasterandRotherhaminthelatter.

Whatthismeansisthatthelargestincreasesintheunemploymentratehavetendedtobein

thoseareaswhereunemploymentwasalreadyrelativelyhighinMarch2008.Sothoseareas

withtheweakestlabourmarketshavebeenhithardestbytherecession.7

7.ThisanalysissupportsDeloittes(2009)findingsthatareasofhighunemploymenttendtoexperience

proportionatelylargeincreasesinunemploymentduringrecessions.Thatpaperalsoarguesthatearnings,

outputandotherindicatorsconvergeintimesofrecession.

Table2:Largestandsmallestchangesinunemployment,March2008toAugust2009,local

authoritydistricts

Smallestchanges pp

Westminster 1.0

AberdeenCity 0.9

RibbleValley 0.9

Cambridge 0.9

EileanSiar 0.8

Highland 0.8

EastLindsey 0.8

WestDorset 0.8

NorthDevon 0.8

Copeland 0.8

WestSomerset 0.8

ArgyllandBute 0.7

Eden 0.7

Aberdeenshire 0.6

SouthLakeland 0.6

CityofLondon 0.6

Gwynedd 0.6

Ceredigion 0.5

ShetlandIslands 0.4

Moray 0.2

IslesofScilly 0.0

OrkneyIslands -0.1

Largestchanges pp

Limavady 3.8

Sandwell 3.8

Cookstown 3.8

Walsall 3.7

MerthyrTydfil 3.6

Dungannon 3.5

Swindon 3.4

BlaenauGwent 3.4

NewryandMourne 3.3

KingstonuponHull 3.3

Rotherham 3.2

Redditch 3.1

Magherafelt 3.1

CannockChase 3.1

Derry 3.1

Corby 3.1

Dudley 3.1

Wolverhampton 3.1

Moyle 3.1

Leicester 3.0

Craigavon 3.0

Rochdale 3.0



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EmploymentdataavailabletoJune2009showtherehasalsobeenabiggerproportionate

fallinjobsinmanufacturingintheWestMidlandsandYorkshireandtheHumberthanin

otherregions.ThisisparticularlytrueintheWestMidlands,wheretherewasafallof12.5

percentinemploymentinmanufacturingbetweenMarch2008andJune2009(compared

withan8percentfallacrossGreatBritain).TheWestMidlandsalsosawthebiggestproportionatedropinemploymentinservices,at2.5percent,overthisperiod.Inpart,this

willhavebeenduetolostemploymentincompaniesservicingmanufacturing(suchas

canteenstaff,cleanersandaccountants).Itwillalsoreflecttheeffectonthelocaleconomy,

especiallyretailing,ofbigjoblossesinmanufacturing.

Itistooearlytobesurebutitseemstheseregionsaresufferingbecausetheirmanufacturing

capacitywasconcentratedatthestartoftherecessioninoneoftwoareas:eitherlowvalue-

addedareas,andsoexposedtoexternalcompetitionfromlow-wage,emergingeconomies,

orinareasthathaveseenasignificantdropindemandbecausetheirproductsarejudgedto

benon-essentialintoughtimes.Manufacturingcompaniesinthefirstgroupwerealready

underpressureandlayingoffworkers(orclosingdowncompletely).Asaresult,frictionalunemploymentcausedbypeoplemovingjobsthroughchoiceorotherwisewasrelatively

highintheseregions,evenwhentheeconomywasoperatingatclosetofullcapacity,asit

undoubtedlywasin2007.Thecreditcrunchandrecessionhaveservedtoacceleratethis

process.Companieshaveclosed,orcutbacktheirproductionlevelsandlaidoffworkers

evenmorerapidly,eitherbecausedemandhasfallen,orbecausetheycouldnotborrowthe

fundstheyneededtosurviveorboth.Asaresult,frictionalunemploymentintheseregions

hasgoneupfaster.

ArecentpaperfromtheWorkFoundationalsonotesthatakeydeterminantofhowwell

localareasareperformingintherecessionagainbasedontheunemploymentdataisthe

skillsprofileofthearea(thoughthisclaimisactuallybasedoninformationabout

qualificationsratherthanskills).Itclaimsthereisaclearrelationshipbetweenlowskillsina

LocalAuthorityandTraveltoWorkareaandinincreasesinunemployment(Leeetal 2009:

21).Inpart,thiswillsimplybebecausethosewithlowskillsarefoundinproportionately

greaternumbersinthoseindustriesthathavelostthemostjobs,suchasmanufacturingand

retailing.However,itislikelythatfirmsarealsochoosingtoretainskilledworkersduringthe

downturnbecausetheywillbehardertorecruitwhentheeconomyrecovers.

Theremay,however,bebetternewsinthenearfuture.Ifthefortunesofthemanufacturing

industryarethemaindriverofregionaltrendsinunemployment,thereisapossibilitythat

thefortunesoftheareashitmostbadlysofarintherecessionwillimproveatleastin

relativeterms.Manufacturingoutputfellsharplyinthesecondhalfof2008andtheearly

partof2009becausecompanieswereanxioustoreduceinventorylevels(theamountof

finishedbutunsoldgoodsmanufacturersorretailershave).Surveyevidencesuggeststhese

arenowexceptionallylow,whichhasledtoastabilisationofoutputinrecentmonths.

Consequently,anyrevivalindemandcouldbeaccompaniedbyanimmediateincreasein

outputandpossiblyemploymenttoo.

ThemostrecentCharteredInstituteofPersonnelandDevelopment/KPMGsurveyofthe

jobsoutlookfoundamodestimprovementinrecruitmentintentionsintheprivatesector

(CIPD2009).Interestingly,theregionsmostlikelytorecruitstaffinthenextthreemonths

(acrossallsectors)areintheNorthofEngland.72percentofemployersintheNorthof

Englandand82percentintheNorthEastareplanningtorecruit,thehighestfigures

sincelastsummer.


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So,whileforecaststhattherecessionwouldhittheSouthrelativelyhardhaveprovedwideof

themark,itisalsotoosimplistictosuggesttheNorthasawholehassufferedbadlywhile

theSouthhasescapedunscathed.Someofthebiggestincreasesinunemploymenthave

beenoutsidethenorthernindustrialregions,inplaceslikeSwindonandCorby,whilepartsof

theNorth,inparticularCumbria,arefaringrelativelywell.TheSouth,particularlyLondon

anditscommuterbelt,hasseenthebiggestincreasesinunemploymentratesformanagers

andprofessionals.Butmorejobsinaggregatehavebeenlostinelementaryoccupationsand

skilledtradesandsincetheseaccountforalargerproportionoftheworkforceintheWest

MidlandsandpartsoftheNorth,itisthesegeographicalareasthathavegenerallyseenthe

biggestincreasesinunemployment(seeLocalGovernmentAssociation2009).

Theimpactoftherecessiononthenortherncity-regions

OutsideoftheWestMidlandsandareaslikeSwindonwheretherearespecialfactors,most

oftheareasthathaveseenthebiggestincreasesinunemploymentsinceMarch2008are

foundwithinthenortherncity-regions.

IthasbeenunfashionableinrecentyearstotalkaboutaNorth-SouthdivideintheUKbut,

inEnglandatleast,thatdividehasnevergoneaway.Thenortherncity-regionscomprise26

ofthe133NUTSLevel3areasthatmakeuptheUK.Ofthese,23hadanunemployment

rateoverthenationalaverageof2.2percentinMarch2008and21haveseenabigger

increaseinunemploymentthanthenationalaverageof2percentagepointssincethen.Thethreeareaswithlowunemployment(andrelativelysmallincreasesinunemployment)are

Table3:Recruitmentintentionsbyregion(Summer2009)

Region Percentageofcompaniesplanningtorecruit

North 72

Wales 69

South 66

Scotland 62

Midlands 54

Source:CharteredInstituteofPersonnelandDevelopment(2009)

-0.5

0

0.5

1

1.5

2

2.5

3

3.5

4

0 1 2 3 4 5 6

Unemployment rate in March 2008 (%)

ChangeinunemploymentratesinceMarch

2008(pp)

Other areas

Northern city regions

Figure6.Levelof

unemploymentin

northerncity-

regionscompared

withotherareas

inMarch2008

andincreaseto

Sept2009,at

levelofNUTS3



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York,theEastRidingofYorkshireandLancashireCountyCouncil8.Thethreeareaswithinthe

northerncity-regionswiththehighestunemploymentratesareHull,LiverpoolandSouth

Teesside.BlackpoolandNorthumberlandrepresenttwoanomalies,inthattheyhadabove-

averageunemploymentinMarch2008butbelow-averageincreasesinunemploymentsince

then.

Asatthenationallevel,thereisapositivecorrelationbetweenemploymentinmanufacturing

inMarch2008inthenortherncity-regionsandtheincreaseinunemploymentsincethen,

thoughtherelationshipisalittlelessstrong.ThisislargelyduetoLiverpoolandSefton,

whereunemploymenthasincreasedbyalittlemorethanthenationalaveragerisedespite

employmentinmanufacturingbeingwellbelowtheaverage(7.8and8.8percent

respectively,comparedwith12.7percentinMarch2008).Unfortunately,thedataweneed

toexplainthisanomalyarenotyetavailable.

Theimpactoftherecessionlocallywithinthenortherncity-regions

Interestingly,thepatternwherebythoseareasthathadthehighestunemploymentratein

March2008haveexperiencedthebiggestincreasesinunemploymentsincethenalso

emergesatamorelocallevelwithineachofthenortherncity-regions.

IntheLeedscity-region9,forexample,therearefiveCensusAreaStatistics(CAS)wards

whereunemploymenthasincreasedby4percentagepointsormoreoverthelastyear:

WombwellNorth,Hunslet,SelbySouth,OvendenandRichmondHill.Threehad

unemploymentratesabove5percentinMarch2008andallhadarateabovetheaverageof

2.4percentforthecity-region.Attheotherendofthescale,thereare25wards(outofa

totalof244)whereunemploymenthasincreasedbylessthan1percentagepoint,andallbar

twohadanunemploymentrateoflessthan1percent.

8.NorthYorkshireCCispartoftheLeedscity-regionandNortheastDerbyshireCCandDerbyshireCCare

partoftheSheffieldcity-regionbutforthepurposesofthisanalysistheyareexcludedfromthecity-regionsbecausepartsofthemareruralinnature.

9.TheanalysiscoversthewardswithintenlocalauthoritiesthatcomprisetheLeedscityregion;North

YorkshireCCisexcluded.

1.0

1.5

2.0

2.5

3.0

3.5

6 8 10 12 14 16 18 20 22

Employment in manufacturing in March 2008 (% of total)

ChangeinunemploymentratesinceMarc

2008(pp)

Figure7.Increase

inunemploymentandemployment

inmanufacturing

inthenorthern

city-regions

comparedwith

otherareas,level

ofNUTS3,

March2008

Sept2009

Source:Officefor

NationalStatistics


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ThesamebroadpatternisrepeatedintheLiverpoolcity-region,thoughtherelationship

betweenthechangeinunemploymentanditslevelinMarch2008isalittlelessstronghere

becausethereareseveralwardswithveryhighratesofunemploymentthathaveseenonly

averageincreasesoverthelast16months.Still,twoofthefivewardswhereunemployment

hasincreasedby4percentagepointsormore(ParrandHardshawandLongview)already

hadveryhighunemploymentratesandtheotherthree(Riverside,AppletonandMersey)

hadaboveaverageratesforthecity-region.

ThesamepatternisapparentintheTeesValleycity-region,whichhaselevenwardswhere

unemploymenthasincreasedbymorethan4percentagepointssincetherecessionbegan.

Unemploymentratesinthesewardsrangedfrom4.5to9.1percentinMarch2008,

comparedwithanaverageforthecity-regionof3.8percent.Meanwhile,therearejustfive

wardsoutof116whereunemploymenthasincreasedby1percentagepointorless.These

hadunemploymentratesrangingfrom0.8to2.0percentbeforetherecessionbegan.The

outlierinthisregionisMiddlehaven,whereunemploymentwas13.2percentinMarch2008

butithasincreasedbyonly2.2percentagepointssincethen.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0 1 2 3 4 5 6 7

Unemployment rate in March 2008 (%))

Changeinunemploymentra

tesince

March2008(pp)

Figure8.

Unemployment

rateinMarch

2008and

increasetoSept2009,Leedscity-

region

Source:Officefor

NationalStatistics

0

1

2

3

4

5

6

0 2 4 6 8 10 12


ChangeinunemploymentratesinceMarch2008(pp)

c

0

1

2

3

4

5

6

0 2 4 6 8 10 12


ChangeinunemploymentratesinceMarch2008(pp)

c

Figure9.

Unemployment

rateinMarch2008and

increasetoSept

2009,Liverpool

city-region

Source:Officefor

NationalStatistics


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Thepatternisthesameintheotherfivenortherncity-regions(seeAppendix3,p24).The

relationshipisstrongestinHullandtheHumberPortsandstillclearalthoughalittleweaker

inCentralLancashireandTyneandWear,wheretherearesomeareasthatpreviouslyhadlow

unemploymentthathavehadbigincreasessinceMarch2008.Statisticalanalysisshowsthe

relationshipissignificantinalleightcity-regions(seeAppendix4,p32).

Deprivationisbestmeasuredbyarangeofindicators,asintheGovernmentsIndexof

MultipleDeprivation(IMD),whichincorporates37indicatorsundersevensub-headings10.

ButitwillbeafewyearsbeforethedataareavailabletocalculatehowtheIMDforeach

city-regionhasbeenaffectedbytherecession.Inthemeantime,ifthedeprivationofa

CensusAreaStatisticswardisdefinedverynarrowlybyreferencetothelevelof

unemployment(orifbroadermeasuresofdeprivationarecloselycorrelatedwith

unemployment),thenthesedatasuggestthattherecession,sofar,hashadabiggerimpact

onrelativelydeprivedcommunitieswithinnortherncity-regions.

Implicationsfordeprivedcommunitiesinthenortherncity-regions

Atthisstage,itisonlypossibletodrawtentativeconclusionsabouttheimplicationsofthe

recessionfordeprivedareaswithinthenortherncity-regionsbutitlooksliketheyarebeing

hit,orareabouttobehit,bythreeunwelcomefactors:

First,areaswhereunemploymentwasalreadyhigharefaringrelativelybadly.

Second,regenerationworkrelatedtohousinghasbeenbadlyaffected.Third,theycouldsufferrelativelyhardwhenpublicspendingiscut.

Ouranalysisoftheunemploymentdatademonstratesthatdeprivedareasaresufferingmore

thanotherareasasaresultoftheslowdown.Itshowsbiggerincreasesinunemployment

ratesinareaswhereunemploymentwasalreadyhigh(whichmightbeexpectedtocorrelate

withbroadermeasuresofdeprivation).Higherunemploymentislikelytobeassociatedwith

lowerincomes,lowerspendingand,therefore,increasedpressuresonlocalbusiness.

Inmanycases,therelativelylargeincreasesinunemploymentreflecttherelativeimportance

oflowvalue-addedmanufacturingindustriesforjobs.Althoughthefallinsterlings

exchangerateoverthelasttwoyearsmighthelpintheshortterm,thiswillcontinuetobea

10.Income,employment,healthanddisability,education,skillsandtraining,barrierstohousingandservices,andlivingenvironmentandcrime.

0

1

2

3

4

5

6

7

0 2 4 6 8 10 12 14


Changeinunemploymentratesince

March2008(pp)Figure10.

Unemployment

rateinMarch

2008and

increasetoSept2009,TeesValley

city-region

Source:Officefor

NationalStatistics


15/32


vulnerablepointformanynortherncity-regionsbecausecompetitionfromoverseas

manufacturersislikelytointensify.Ineffect,therecessionhastemporarilyacceleratedthe

declineintheUKsmanufacturingindustries.

Policymakerswillthereforeneedtoincreasetheireffortstofindwaysofgettingpeoplewho

losetheirjobsintheseindustriesbackintotheworkforce.Intheshortterm,theWork

Foundationnotesseveralareasinwhichcityeconomiesareactingtolimitthescaleofthe

downturnintheirarea(forexample,byimprovingcreditavailabilityforlocalbusinesses),to

minimisejoblossesandprovidehelptotheunemployed,tomakeplacesmoreattractiveand

topreparefortheupturn(Leeetal2009).Longerterm,thiswillalsorequireavisionofwhat

theeconomicmake-upofthecity-regionsmightbelikein10yearstime.Thisshouldnot

involveareturntothepre-recessioneconomyintheUK,sinceitwasneithersustainablenor

just.Instead,thenextdecadeshouldbeusedasanopportunitytoreshapetheeconomyin

fairerways.

Meanwhile,constructionactivityinparticularresidentialconstructionwithinnorthern

citieshasbeenbadlyhitbytherecessionandthecreditcrunch.Itseemsthatsomeregionsarelikelytosufferdisproportionatelyasaresultofthedownturninthehousingmarket

associatedwiththerecession.BuildingofprivatehomesinManchesterhasbeen50percent

higher(relativetopopulation)thantheUKnationalaverageinrecentyears,withLeedsnot

farbehind(Parkinsonetal 2009).Arelativelyhighproportionofthesehomeswerebought

bybuy-to-letinvestorsorforpurelyspeculativepurposesbutthecreditcrunchmeans

potentialbuyerswillfindithardertoraisefundsforthenextfewyears.Thelikelyresultisa

muchlowerrateofbuildingnotjustforthedurationoftherecessionbutforseveralyears.

Thereisalsosomeevidencethatthemoredeprivedareaswillsufferthemost:

Residential-ledregenerationschemeslocatedinlessprosperous/peripheral

economies,particularlywherethemajorityofpotentialbuyersarethoserelying

ongainingfinancethroughthesub-primemortgagemarkethavebeenhit

[relativelyhard].Thesearenowtheleastattractiveschemestodevelopers.

(Parkinsonetal 2009:32-3)

Thesameauthorsreportthatmanyregenerationschemesledbyhousebuildinghavecome

toastandstillintheNorthEast,whichhasledtoredundancies.Asortofviciouscirclemight,

thus,bedevelopingasregenerationdevelopmentsaredelayedinareaswithweaknessinthe

localeconomyduetotheirdependenceondecliningmanufacturingindustries,leadingto

lessemployment,whichinturncreatesmoreeconomicweakness,andsoon.

Asignificantworryisthathousing-ledregenerationactivitywillnotreboundin2010or2011,eveniftheeconomyemergesfromrecession.Theperiodofabundantprivate-sectorcredithas

cometoanendandbanksarelikelytobereluctanttolendforwhattheyseeasmarginalor

riskyprojectsforseveralyears.Thiscouldbeasevereblowtohousing-ledeffortsaimedat

regeneratingdeprivedareaswithinnortherncitiesunlessanalternativesourceoffundscanbe

found.Futurepoliciestargetedatdeprivedcommunitieswillneedtotreatthisasonefocus.

Thereisalsoevidencethatsmallercities,suchasHullandSunderland,andtheperipheryof

largercitiesarefaringworsethanlargenortherncitycentres.CatherineGlossoparguesina

recentSmithInstitutepaperthatitmaybenecessarytorespondtothisdevelopmentby

switchingfundsfromthelargecitycentreswhichhavetraditionallygleanedthelionsshare

ofregenerationfundstotheworsehitareas(Hackett[ed]2009:62).Ineffect,thiswould

meanabandoningthenotionthatspendinginareasofopportunitywillalsoboostpoorer

areasthroughsomesortoftrickle-downeffect.


16/32


TheforthcomingsqueezeonpublicspendingisalsoaconcernbecausetheNorthofEngland

reliesmoreheavilythanotherpartsofthecountryonpublicspending.Cutsinpublicsector

spendingwillhaveadirecteffectonemploymentandincomes,buttheywillalsohave

second-roundeffectsasaresultofreducedconsumptionandorganisationalspending,which

willleadtofurtherjoblossesintheaffectedareas.

Inaggregateterms,theNorthEastlooksthemostvulnerableregioninEngland.According

tothelatestfigures,publicspendingisequivalentto52percentofgrossvalueaddedinthe

region,comparedwithanationalaverageof38percent11.TheNorthWest(47percent)and

YorkshireandtheHumber(44percent)arealsoaboveaverage.

Initiallyatleast,thefocusislikelytobeonefficiencysavingsandcutsinadministration

costs,ratherthanonfrontlineservices.IftheConservativeswinthenextgeneralelection,

theyhavesaidthattheywillseeksignificantcutsinspendingonquangos.Thecitiesthatwill

bevulnerable,therefore,arenotnecessarilythosewiththehighestproportionofpublic

sectoremployees(OxfordandCambridge)butthosewiththewrongsortofpublicsector

employmentinauxiliarycentralgovernmentfunctionsandquangos.Wherethereisa

clusterofgovernmentofficesorquangos,cutscouldleadtolarge-scaleredundanciesina

particulargeographicalarea.

ArecentreportfromtheCentreforCitieshighlightsBarnsley,Newcastle,Liverpooland

Blackpoolascitieswithinthenortherncity-regionsthatarehighlyvulnerablebecausealarge

proportionoftheireconomyisreliantonpublicsectoractivities(alongwithSwansea,

Hastings,IpswichandNewport)(Larkin2009).Itsuggests6,600publicsectorjobscouldbe

lostinNewcastle(1.8percentoftotalemployment)and1,200inBarnsley(1.7percent).

Afterallowingforconsequentlossesintheprivatesector,Newcastlecouldlose8,600jobsin

totalandBarnsley1,600.

Theoutlookisparticularlyworryingforthoseareaswherepublicsectorjobshavebeen

createdinrecentyearsbytherelocationofpartsofcentralgovernmentthepublicationin

2004ofSirMichaelLyons'reviewforHMTreasuryonthepatternofgovernmentservice

(Lyons2004).

11.Theseratiosarecalculatedfromidentifiablepublicexpenditure(83percentoftotalmanagedexpenditure)for2007/08andgrossvalueaddedatbasicprices,byworkplace,incalendaryear2007.

0 10 20 30 40 50 60

United Kingdom

Northern Ireland

Wales

Scotland

South West

South East

London

East

West Midlands

East Midlands

Yorkshire & the Humber

North West

North East

Figure11.Public

spendingasa

shareofgross

valueadded,

2007/08(%)

Source:Officefor

NationalStatistics


17/32


Itisnottoosoonforregionalbodiestobelobbyinggovernmentandtheoppositionin

anefforttominimisetheeffectofspendingcutsondeprivedareasintheNorth.Moregenerally,wherecity-regionshavereliedonpublicmoneyinthepasttofundeffortstohelp

deprivedareas,itwouldbewisetoassumethatlesswillbeavailableinthefuture.Apriority,

therefore,shouldbetoseekoutalternativeapproachestotheproblemofhowtolift

communitiesoutofdeprivation.

Conclusion

Therecessionisbadnewsfordeprivedcommunitiesinthenortherncity-regions,bringing

rapidincreasesinunemployment,cutbacksinhousing-ledregenerationprogrammesandthe

prospectofcutsinpublicspendingincomingyears.Itisimperative,therefore,thatefforts

aremadetoexplorehowdeprivedareascanbebetterlinkedtoareasofeconomic

opportunity,toconsidertherolesoflocal,city-regional,regionalandnationalbodies,andto

starttodevelopthenextgenerationofpoliciestargetedatdeprivedcommunities.

Table4:NortherncitiesthathavegainedpostsundertheLyonsrelocationprogramme

(20042009)

City Postsreceived

Liverpool/Bootle 1,667

Manchester 1,169

Sheffield 820

Leeds 728

Newcastle 668

Blackpool 503

Source:OfficeofGovernmentCommerce2009:www.ogc.gov.uk/government_relocation_relocation_

programme_progress__8180.asp


18/32


References

CharteredInstituteofPersonnelandDevelopment(CIPD)(2009)LabourMarketOutlook,Quarterly

SurveyReport,Summer2009, availableatwww.cipd.co.uk/NR/rdonlyres/B825A8B2-7022-4D8A-

B321-1AB38F1999B2/0/Labour_Market_Outlook_Summer_2009.pdf

Deloitte(2009)StrengtheningtheNorthsEconomyintheRecoveryPhase,March,London:Deloitte,

availableatwww.thenorthernway.co.uk/downloaddoc.asp?id=649

HackettP(ed)(2009) Regenerationinadownturn:whatneedstochange?London:TheSmith

Institute,availableatwww.smith-institute.org.uk/pdfs/regeneration.pdf

InternationalMonetaryFund(IMF)(2009) WorldEconomicOutlook,October

KeepBritainWorking(2009)FlexibilityofUKWorkershelpssavejobs,newsrelease,June,available

atwww.keepbritainworking.com/newsitem_Flexibility_of_UK_Workers_helps_save_jobs_7.aspx

LarkinK(2009)Publicsectorcities:Troubleahead London:CentreforCities

LeeN,MorrisKandJonesA(2009)Recessionandrecovery:HowUKCitiescanrespondanddrivethe

recoveryLondon:TheWorkFoundation,January,availableat

www.theworkfoundation.com/assets/docs/publications/220_UK%20Recession_Recovery_Cities-

The%20Work%20Foundation.pdf

LocalGovernmentAssociation(2009)Thegrowthofclaimantunemploymentbybroadoccupation

andarea,London:LGA,availableatwww.lga.gov.uk/lga/aio/1974810

LyonsM(2004)WellPlacedtoDeliver:ShapingthePatternofGovernmentServiceLondon:HM

Treasury

ParkinsonM,BallM,BlakeNandKeyT(2009)TheCreditCrunchandRegeneration:Impactand

Implications,ReportfortheDepartmentforCommunitiesandLocalGovernment,London:CLG,

availableatwww.communities.gov.uk/documents/citiesandregions/pdf/1135143.pdf


19/32


Appendix1:Divisionswithintheeightnortherncity-regions

CentralLancashire

1.BlackburnwithDarwen

2.Blackpool3.Preston

4.Fylde

5.Wyre

6.Chorley

7.SouthRibble

8.Hyndburn

9.RibbleValley

10.Burnley

11.Pendle

12.Rossendale

HullandHumberPorts

1.Hull

2.EastRidingofYorkshire

3.NELincolnshire

4.NorthLincolnshire

Leeds

1.Barnsley

2.Bradford

3.Calderdale

4.Craven

5.Harrogate

6.Kirklees

7.Leeds

8.Selby

9.Wakefield

10.York

11.NorthYorkshireCC

Liverpool

1.Liverpool

2.Wirral

3.StHelens

4.Knowsley

5.Sefton6.Halton


20/32


GreaterManchester

1.Manchester

2.Bolton

3.Bury

4.Oldham

5.Rochdale

6.Salford

7.Stockport

8.Tameside

9.Trafford

10.Wigan

Sheffield

1.Barnsley

2.Doncaster

3.Rotherham

4.Sheffield

5.NEDerbyshire

6.DerbyshireDales

7.Chesterfield

8.Bolsover

9.Bassetlaw

10.NEDerbyshireCC

11.DerbyshireCC

12.PeakDistrictNPA

TeesValley

1.Darlington

2.Middlesbrough

3.Hartlepool

4.RedcarandCleveland

5.Stockton-on-Tees

TyneandWear

1.Newcastle

2.Gateshead

3.Sunderland

4.NorthTyneside

5.SouthTyneside

6.NorthumberlandCC(BlythValley,Wansbeck,CastleMorpeth,Tynedale)7.DurhamCC(Durham,Derwentside,Easington,Chester-le-Street)


21/32


Appendix2:Thenatureoftherecessionandtherecovery

Thecurrentrecessionwascaused,primarily,byacreditcrunch.Thismakesitdifferentfrom

alltheotherrecessionstheUKeconomyhasexperiencedsincetheSecondWorldWar.

Previousrecessionswereprecededbyaperiodofexcessivelystronggrowthindemand,

whichcreatedbottlenecksintheeconomyandcausedtherateofinflationindomesticwagesandpricestoincrease.Insomeinstances,strongglobaldemandpushedup

commodityprices,particularlyoilprices,atthesametime.

Policymakersrespondedwithsubstantialincreasesininterestrates,whicheventuallycaused

demandandeconomicoutputtofallinotherwords,arecessionsoeasingthe

bottlenecksandallowinginflationtogobackdowntoacceptablelevels.

InflationintheUKdidincreasein2008,buttheinflationpressureswerealmostwholly

external.Thebulkoftheriseinconsumerpriceinflation,from2.1percentattheendof

2007toapeakof5.2percentinSeptember2008,wascausedbymuchhigherfoodand

energyprices.Domesticinflationremainedsubdued,withaverageearnings,forexample,

continuingtogrowatanannualrateof3.5to4percentthroughout2007and2008.While

theBankofEnglandincreaseditsofficialinterestratein2006and2007,itpeakedatonly

5.75percent(inJuly2007)nothighenoughtocausearecession.

Higherfoodandenergypricesdidplaysomepartinslowingdemandgrowth,byreducing

theamountofmoneyhouseholdshadavailablefordiscretionaryspending,buttheyplayeda

secondaryrole.Therecessionismainlytheresultofacreditcrunch,whichwas,inturn,

causedbyaburstingofhousepricebubbles,particularlyintheUnitedStatesandtheUnited

Kingdom.

IntheUS,housepricesstartedtofallin2007andtherewasariseinmortgagedefaults,

particularlydefaultsonsub-primemortgages(loansmadetothoseonloworirregularincomes).Alotofthesemortgageshadbeenparcelledupintomortgage-backedsecurities

(MBS),whichhadinturnbeenusedtocreatemorecomplexdebtinstruments,including

collateralizeddebtobligations(CDOs).Whenmortgagedefaultsrose,thepricesofthese

securitiesstartedtofall.Itthenemergedthatbanksandotherfinancialinstitutionswere

holdingvastquantitiesoftheseinstruments,oftenhavingusedborrowedmoneytobuy

them.Thesubsequentscrambletoselldrovepriceslower,ledtomassivelossesinthe

financialsectorandbankruptedsomeinstitutions.

Meanwhile,housepricesalsobegantofallintheUK,exposingaseriousweaknessin

householdsbalancesheets.HouseholddebtintheUKhadincreasedfrom109percentof

disposableincomein1999to176percentin2007.Muchofthisdebtwasbackedbyrising

housingwealthandtakenoninthebeliefthathousepriceswouldcontinuetoincrease.

Oncetheybegantofall,itwasunsustainable.Mortgagedefaultsrose,addingtothe

problemsbankswerealreadyfacing.

Oncebanksranintotroubleofthismagnitude,itwasinevitablethatthefinancialcollapse

wouldspilloverintotherealeconomy.Largelossescausedbankscapitalbasestoshrink,

forcingthemtocutbackonlendinginordertorepairtheirbalancesheets.Credit-worthy

householdsandbusinessescouldnolongerborrowthefundstheyneededtopurchase

houses,tomakeinvestments,orsimplytokeepcompaniesafloat.Consumerandbusiness

spendingwascut,workerswerelaidoffandtheeconomyfellintorecession.

ThecauseoftherecessionisimportantbecausestudiesbyorganisationssuchastheInternationalMonetaryFundconsistentlyshowthatrecessionsthatareprimarilytheresultof

balancesheetproblemstendtobeworsedeeperandlongerthanrecessionsthatresult


22/32


fromatighteningofmonetarypolicytocounterinflationpressures.Similarstudiesshowthat

synchronisedrecessionstendtobeworseforindividualcountriesthanisolatedrecessions.As

wearenowexperiencingaglobal,balancesheetrecession,itisnosurprisethatitisturning

outtobetheworstsincetheSecondWorldWar.

IntheUK,therecessionhas,sofar,lastedforfivequarters(2008Q2to2009Q2)and

outputisdown5.6percentfromitspeak.Thefallinoutputoverthelastyearisthelargest

annualfallsinceatleast1956(whenquarterlyrecordsbegin),andprobablythelargestsince

the1930s.

Recentdatareleases,whichshowsomesignsofstabilisationinconsumerandbusiness

confidence,thehousingmarketandpartsoftheretailsector,couldbeinterpretedas

suggestingthedownturniscomingtoanend.However,thesedataneedtobetreatedwith

caution.Muchoftheimprovementisinmanufacturingwhereinventorylevelshavebeen

correctedandcompaniescannolongercutproductionwhilemeetingdemandfromstocks.

Othersectors,suchasconstruction,arestillcontractingsharply.Itistoosoontosaywithany

confidencewhethertherecessionisendingorjustthattheworstisover.Inprevious

recessions,outputhasoccasionallyreboundedtemporarilybeforecontractingagain.The

samemayhappeninthisrecession.

Theunusualnatureoftherecessionandthepolicyresponsetoitmakeitharderthanusual

topredictitscourseandthenatureofanysubsequentrecovery.Fiscalandmonetarypolicies

havebothmovedintounchartedterritory.Thefiscaldeficitthisyearisprojectedtobe175

billion,whichis12.5percentofGDPand,bysomeway,thelargestdeficitinUKpost-war

history.Meanwhile,theBankofEnglandhascutinterestratestoalmostzeroand

implementedapolicyofquantitativeeasing(boostingtheamountofmoneyinthe

financialsystem).Noonecanbesurehowtheeconomywillreacttothisstimulusbecauseit

hasneverbeentriedintheUKbefore.

However,despiteallthepolicymeasuresthathavebeentaken,theriskisthattherecovery,

whenitcommences,willbeslowerandweakerthanisnormalintheUK.Banksstillhavemuchmoretodotorebuildtheircapitalbasesandrepairtheirbalancesheets,sothe

availabilityofcreditwillimproveonlyverygradually.Meanwhile,althoughhouseholdshave

-6

-4

-2

0

2

4

6

8

10

1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

Year

%

UKrealGDP

growth(%

changeonyear)


23/32


startedtosavemoreandborrowless,theyhavealotofworktodobeforetheirbalance

sheetsareinbettershape,andcompaniesarealsoseekingtoreducedebtasapriority,so

creditdemandwillbesubdued.Furthermore,governmentspending,excludingdebtinterest

andwelfarepayments,willhavetobecutinrealtermsperhapsquitesharplyafter

2010/11.Thiswillholdbackaggregatedemandandoutputgrowthintheeconomy.

JustasthisrecessionhasbeendifferentfromallotherrecessionssincetheSecondWorld

War,sotherecoveryislikelytobedifferentfromallotherrecoveriestoo.Unfortunately,the

maindifferencecouldbethatitisslowandfaltering.Thelatestforecastsfromthe

InternationalMonetaryFundsuggestUKrealGDPwillcontractby4.4percentin2009,

followedbygrowthofjust0.9percentin2010(IMF2009).


24/32


Appendix3:Increasesinunemploymentandunemploymentlevelsby

ward

CentralLancashire

Wardswithbiggestincreasesinunemployment:

MillHill(Blackburn)from3.2to7.2%

Sudell(Blackburn)from4.3to8.0%

WensleyFold(Blackburn)from5.7to9.4%

Trinity(Burnley)from4.4to8.0%

SpringHill(Hyndburn)from3.6to7.0%

Wardswithsmallestincreasesinunemployment:

ElswickandLittleEccleston(Fylde)from1.0to0.8%

BlackoandHigherford(Pendle)from0.9to1.1%

Gisburn,Rimington(RibbleValley)from0.6to0.8%

Bowland,NewtonandSlaidburn(RibbleValley)from0.4to0.6%

Garstang(Wyre)from1.0to1.3%

Wardswiththehighestunemployment:

Bloomfield(Blackpool)10.4%

Claremont(Blackpool)10.2%

Ribbleton(Preston)9.7%

WensleyFold(Blackburn)9.4%

ShadsworthwithWhitebirk(Blackburn)8.5%

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0 2 4 6 8 10



2008(pp)

Levelof

unemployment

andincrease

March2008

Sept2009,

Central

Lancashirecity-

region


25/32


HullandHumberPorts


Myton(KingstonuponHull)from10.3to16.1%

OrchardParkandGreenwood(KingstonuponHull)from9.5to15.2%

WestMarsh(NELincolnshire)from5.9to11.1%

EastMarsh(NELincolnshire)from8.4to13.1%

CrosbyandPark(NorthLincolnshire)from4.5to9.0%


BeverleyRural(EastRidingofYorkshire)from1.0to1.7%

BridlingtonNorth(EastRidingofYorkshire)from1.8to2.6%

WoldsWeighton(EastRidingofYorkshire)from0.8to1.8%

Dale(EastRidingofYorkshire)from0.8to1.8%

PocklingtonProvincial(EastRidingofYorkshire)from0.7to1.8%


Myton(KingstonuponHull)16.1%

OrchardParkandGreenwood(KingstonuponHull)15.2%

StAndrews(KingstonuponHull)14.6%

EastMarsh(NELincolnshire)13.1%

WestMarsh(NELincolnshire)11.1%

0

1

2

3

4

5

6

7

0 2 4 6 8 10 12



2008(pp)

Levelof

unemployment

andincreaseMarch2008

Sept2009,Hull

andHumber

Portscity-

region


26/32


Leeds


SelbySouth(Selby)from5.1to10.0%

Ovendon(Calderdale)from4.3to8.7%

Hunslet(Leeds)from5.2to9.6%

WombwellNorth(Barnsley)from2.9to7.2%

RichmondHill(Leeds)from5.4to9.4%


BishopMonkton(Harrogate)from0.9to1.0%

Heslington(York)from0.1to0.2%

HellifieldandLongPreston(Craven)from0.8to1.0%

UpperWharfedale(Craven)from0.3to0.5%

Penyghent(Craven)from0.3to0.7%


SelbySouth(Selby)10.0%

LittleHorton(Bradford)9.8%

Hunslet(Leeds)9.6%

StJohns(Calderdale)9.6%

RichmondHill(Leeds)9.4%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0 1 2 3 4 5 6 7

Unemployment rate in March 2008 (%))

Changeinunemploymentratesince

March2008(pp)

Levelof

unemployment


Sept2009,

Leedscity-

region


27/32


Liverpool


Riverside(Halton)from4.1to9.6%

Appleton(Halton)from3.7to8.1%

Longview(Knowsley)from7.2to11.4%

ParrandHardshaw(StHelens)from7.1to11.2%

Mersey(Halton)from3.7to7.7%


Meols(Sefton)from1.3to2.0%

Clatterbridge(Wirral)from1.6to2.5%

Rainhill(StHelens)from1.9to2.9%

Eccleston(StHelens)from1.4to2.4%

Harington(Sefton)from0.9to2.0%


Granby(Liverpool)13.5%

Birkenhead(Wirral)13.5%

Breckfield(Liverpool)11.9%

Kensington(Liverpool)11.7%

Vauxhall(Liverpool)11.6%

0

1

2

3

4

5

6

0 2 4 6 8 10 12


ChangeinunemploymentratesinceMarch200

8(pp)

c

0

1

2

3

4

5

6

0 2 4 6 8 10 12



8(pp)

c

Levelof

unemployment


Sept2009,

Liverpoolcity-

region


28/32


GreaterManchester


Brinnington(Stockport)from6.6to11.8%

WalkdenNorth(Salford)from3.6to8.0%

Ince(Wigan)from3.9to8.3%

Norley(Wigan)from5.1to9.5%

Newtown(Wigan)from4.4to8.7%


Bowdon(Trafford)from0.7to1.4%

SaddleworthEast(Oldham)from1.0to2.0%

Tottington(Bury)from1.2to2.4%

WestBramhall(Stockport)from0.7to1.9%

Ramsbottom(Bury)from1.5to2.7%


CentralandFalinge(Rochdale)13.3%

Brinnington(Stockport)11.8%

Coldhust(Oldham)10.1%

Langworthy(Salford)9.6%

Benchill(Manchester)9.6%

0

1

2

3

4

5

6

0 2 4 6 8 10



2008(pp)

Levelof

unemployment


Sept2009,

Manchester

city-region


29/32


Sheffield


ShirebrookEast(Bolsover)from3.7to8.9%

Greasbrough(Rotherham)from3.5to8.3%

Herringthorpe(Rotherham)from5.0to9.6%

Central(Rotherham)from5.4to9.8%

Manor(Sheffield)from5.2to9.6%


Chatsworth(DerbyshiresDales)from0.7to0.2%

WinsterandSouthDarley(DerbyshiresDales)from1.0to1.0%

HathersageandEyam(DerbyshiresDales)from1.1to1.2%

Sutton(Bassetlaw)from0.7to1.0%

Ashover(NEDerbyshire)from0.8to1.1%


Burngreave(Sheffield)10.4%

Central(Doncaster)10.1%

Central(Rotherham)9.8%

Herringthorpe(Rotherham)9.6%

Manor(Sheffield)9.6%

-1

0

1

2

3

4

5

6

0 1 2 3 4 5 6 7


ChangeinunemploymentratesinceMar

ch

2008(pp)

Levelof

unemployment


Sept2009,

Sheffieldcity-

region


30/32


TeesValley


PortrackandTilery(Stockton-on-Tees)from9.1to15.2%

BlueHall(Stockton-on-Tees)from4.5to9.3%

ParkEast(Darlington)from4.7to9.5%

Coatham(RedcarandCleveland)from6.7to11.4%

NorthOrmesbyandBramblesFarm(Middlesbrough)from8.4to13.1%


Elwick(Hartlepool)from1.1to1.4%

Hummersknott(Darlington)from1.3to2.0%

ParkWest(Darlington)from1.3to2.3%

HeighingtonandConiscliffe(Darlington)from0.8to1.8%

College(Darlington)from2.0to3.0%


Middlehaven(Middlesbrough)15.4%

PortrackandTilery(Stockton-on-Tees)15.2%

Grangetown(RedcarandCleveland)14.0%

NorthOrmsebyandBramblesFarm(Middlesbrough)13.1%

Thormtree(Middlesbrough)12.5%

0

1

2

3

4

5

6

7

0 2 4 6 8 10 12 14



08(pp)Levelof

unemployment


Sept2009,Tees

Valleycity-

region


31/32


TyneandWear


AcreRigg(Easington)from1.5to5.6%

EdenHill(Easington)from3.8to7.8%

Castletown(Sunderland)from3.5to7.3%

HordenSouth(Easington)from2.8to6.4%

Catchgate(Derwentside)from3.4to6.9%


Shincliffe(Durham)from0.9to0.7%

StNicholas(Durham)from0.2to0.3%

Wark(Tynedale)from1.0to1.1%

Elvet(Durham)from0.2to0.4%

SouthTynedale(Tynedale)from0.7to0.9%


Rekendyke(SouthTyneside)10.9%

Walker(Newcastle)10.7%

Bede(SouthTyneside)10.5%

Hirst(Wansbeck)10.4%

Hendon(Sunderland)9.4%

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0 2 4 6 8 10



2008(pp)

Levelof

unemployment


Sept2009,Tyne

andWearcity-

region


32/32


Appendix4:Correlationsbetweenincreasesinunemploymentandunemployment

levelsbyward

City-region Correlation* Numberofwards

CentralLancashire 0.48 249

HullandHumberPorts 0.87 81

Leeds 0.77 244

Liverpool 0.48 138

GreaterManchester 0.68 214

Sheffield 0.71 208

TeesValley 0.65 116

TyneandWear 0.46 278

*CorrelationbetweentheunemploymentrateinMarch2008andthechangeinunemploymentbetweenMarch2008andSeptember2009

Allthesecorrelationsarehighlystatisticallysignificant.

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The Impact of Recession on Northern City Regions

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