Back to work - What you may have missed this summer

WMCA Economic Dashboard: improved business confidence but higher claimant count

The latest Regional Future Business Activity Index show an increase to 77.9 for July 2024, revealing the slide in June (to 74.8) to have been a blip. However, the WMCA area claimant count has continued its rise to 8.1%. This is another 10.7% in July after a 6.1% rise the month before, and represents another 14,440 claimants in the WMCA area, to a total of 149,955 claimants. This is the highest number of claimants since September 2021.

ONS raises 2022 GDP growth figure from 4.3% to 4.8%

The UK's latest GDP revisions reflect refined estimates showing stronger economic performance during the pandemic rebound in 2022, with notable impacts on sectors like mining, health, manufacturing, and accommodation. While UK figures have been updated, new regional figures are yet to be released.

“A genuine living wage for working people”

The government has revised the Low Pay Commission's remit to ensure future minimum wage recommendations consider the cost of living, aiming to create a genuine living wage for all adults and narrow the wage gap for younger workers as part of a broader plan to improve living standards and economic growth.

Midlands Engine reflects on learnings from recent Summit and UKREiiF

While the UK's universities and business environment attract inward investment, barriers such as skills shortages, infrastructure deficits, complex planning, and short-termism hinder retention. This necessitates innovative finance models like the Midlands Green Bond and stronger public-private partnerships to drive sustainable growth and attract long-term investment say business leaders.

A new approach to inflationary resilience?

While inflation has returned to target levels, the UK remains vulnerable to future inflationary shocks driven by gas dependency and food insecurity according to Onward. In a new report, the think tank argues the situation requires proactive supply-side measures such as increasing renewable energy production, improving food self-sufficiency, and enhancing infrastructure resilience rather than relying solely on monetary and fiscal policies.

The next industrial strategy must have cross-party support

To avoid the fate of previous failed attempts, the new industrial strategy must set a clear, cross-party target of making the UK more prosperous than Germany, focus unapologetically on boosting productivity rather than diluting the strategy with other agendas, and prioritise enhancing the attractiveness of major cities to foster economic clusters rather than organising around specific sectors, writes Centre for Cities Director of Policy and Research.

‘Cheapflation’ and the rise of inflation inequality

From 2021 to 2023, inflation inequality surged as cheaper goods saw larger price increases, a trend termed 'cheapflation', which hit lower-income households harder. Evidence from post-Brexit price changes suggests that higher cost pass-through to cheaper products contributed to this disparity writes the Institute for Fiscal Studies.

How not to miss the productivity revival again: Bart van Ark at the Royal Society of Edinburgh

The Royal Society of Edinburgh hosted a talk by Professor Bart van Ark on the future of UK and Scotland's productivity. Introduced by Professor Sir Anton Muscatelli, the event featured a panel discussion with MSPs Maggie Chapman, Michael Marra, and Brian Whittle. This summary covers the event and highlights recommendations for a productivity revival, including championing inclusive productivity growth, adoption of AI, and the synchronisation of policy across departments.

Briefing note: community wealth building

This briefing, sent to all MPs by CLES during the week of July 22 2024, outlines how community wealth building can tackle issues in local economic development and support local growth plans. It highlights key opportunities for achieving progressive and green growth while addressing regional inequality.

New set of think pieces on social mobility

A set of reports by the Social Mobility Commission propose a framework to tackle social mobility challenges by integrating innovation policy, competition policy, the labour market, and education policy. The first report, ‘Innovation and social mobility: two sides of the same coin’, suggests that fostering innovation can enhance social mobility by disrupting markets and creating new opportunities. The second, 'Spatial agglomeration, productivity, and inequality', emphasises holistic regional policies to improve mobility for residents who remain in their areas. The third, 'Occupational regulation and social mobility in the UK', examines how occupational regulations can hinder social mobility and calls for policies that balance consumer safety with accessibility.

Evaluation of Partnerships for People and Place - Birmingham project

According to a City-REDI evaluation, the East Birmingham project aimed to raise career awareness and support transitions to employment or further study, successfully demonstrating proof of concept by recommending earlier career focus in schools, shifting away from a deficit model of youth aspirations, involving parents in career planning, and securing school leadership support for valuable work experiences.

West Midlands one of the worst-hit areas for child poverty

According to a new report by the Resolution Foundation, the West Midlands, notably Birmingham, Wolverhampton, Sandwell, and Walsall, has become one of the worst-hit areas for child poverty in the UK, with nearly half of children in these areas living in relative poverty in 2022-2023, exacerbated by the two-child benefit cap and a significant shift from previous hotspots in London.

A New Deal for parents?

A new report written by Onward emphasises the need for 'A New Deal for Parents' to address financial and career-related barriers to parenthood, reflecting widespread concerns about inadequate statutory pay and the Motherhood Penalty, which are contributing to declining birth rates in the UK.

Community led business support to drive economic growth in diverse neighbourhoods

The WMCA is investing £270,000 to establish five community-led business hubs that will provide targeted support to entrepreneurs in ethnically diverse communities, aiming to drive economic growth and help overcome barriers to success.

Global Entrepreneurship Monitor UK report launched

The latest Global Entrepreneurship Monitor (GEM) UK report 2023/24, launched at Aston University, highlights the UK's significant progress in becoming a more entrepreneurial society over the past 25 years despite facing major global and domestic challenges. Interestingly, the West Midlands has risen from the middle of the pack to the second highest region for early-stage entrepreneurial activity in the UK. 

Flexible working for all?

This report by the Institute for Employment Studies highlights the positive impact of flexible working on employees and organisations, emphasising the need for equitable access to flexible options, particularly for frontline workers, to improve performance, reduce absences, and enhance organisational loyalty.

Midlands Engine Investment Fund hits £1m milestone

Since its launch earlier this year, the Midlands Engine Investment Fund II has provided £1m in small business loans to 18 firms in the West Midlands to support job creation, expansion, and increased demand for their products.

Six ways to boost performance with generative AI

According to Warwick Business School, companies can boost performance by using generative AI in six key ways: enhancing research, brainstorming ideas, supporting content creation, writing and understanding code, automating customer interactions, and translating languages, all of which can significantly increase productivity and transform organisational structures.

Mental health training essential for managers

Mental health training for line managers is strongly linked to improved business performance, including better staff recruitment and retention, enhanced customer service, and reduced long-term mental health sickness absence, according to new research.

New research delves into equity access and use in early-stage ventures

A report by the Enterprise Research Centre explores the critical role of early-stage equity in firms' commercialisation strategies by examining the journey of early-stage ventures toward securing equity and identifying the barriers and enablers, based on surveys, case studies, and interviews conducted in early 2023.

Thinking about why and how to improve access to debt finance

Business investment, crucial for productivity and economic growth, is sluggish in the UK, limiting improvements in living standards. Most businesses rely on debt finance rather than equity for investment. A local policy aimed at improving access to debt finance could potentially boost business investment and productivity. A recent briefing by What Works Centre for Local Economic Growth explores this idea, helping policymakers consider its impact on local economic growth.

What do we know about factors that affect business investment decisions?

The UK's persistent productivity lag, particularly after the global financial crisis, is partly attributed to lower business investment rates, and this paper by Eugenie Golubova at the Enterprise Research Centre aims to address the underexplored area of investment decision-making processes by reviewing key evidence from the post-crisis period. Golubova finds that many factors influence investment decisions but evidence is lacking in uniform measurement of these factors, a lack of evidence on the decision-making process, and stakeholder behaviour.

New logistics and manufacturing development in Wolverhampton secures funding

A £22 million development loan from commercial property lender Together is fuelling the delivery of a logistics and manufacturing scheme at Wolverhampton. The £60 million scheme involves two warehouses, with a combined floor space of 380,000 sq ft, located next to junction 2 of the M54 at Wolverhampton.

Agreement signed that aims to promote battery research and innovation

The Australian Government’s Powering Australia has signed an agreement with the UK battery industrialisation centre in Coventry. The agreement aims to boost collaboration in battery research and innovation between Australia and the UK.

Local labour markets, workforce planning and underemployment

Underemployment (being part-time employed but wanting more hours) in the UK and Europe has increased since the 2008-9 financial crisis, with risks higher in less productive local economies. This academic article explores how labour market conditions and business models influence workforce planning and underemployment.

Equality gaps in earnings and employment from education

A report by Transforming Access and Student Outcomes in Higher Education (TASO) highlights that higher education significantly boosts earnings and employment rates, particularly for those with Level 5 and 6 qualifications, but also underscores rising inequalities for disadvantaged students, recommending enhanced support and increased availability of these qualifications in further education.

Post-18 education reviewed

A recent report by EDSK critiques the post-18 education system in England for its inequalities in funding, achievement, and accessibility across higher education, further education, and apprenticeships, advocating for a standardised and coherent tertiary system that promotes equity and sustainability, with recommendations for unified funding, expanded local oversight, and capped tuition fees.

A devolved work and skills offer

The Local Government Association’s report proposes localising employment and skills services to support government goals of boosting growth and opportunity by helping young people and adults into work, encouraging collaboration between Jobcentres and councils, and promoting tailored initiatives for youth employment, adult workforce reintegration, and lifelong learning.

Getting Britain working – a new Government approach to employment support

The Secretary of State for Work and Pensions Liz Kendal outlined plans to reform Britain’s employment support system by integrating health, skills, childcare, and transport support, focusing on a new national jobs service, local work-health-skills plans, and a youth guarantee, aiming for an 80% employment rate.

Launch Pads: The future of youth employment hubs

A new report by Demos highlights the effectiveness of the Department for Work and Pension’s Youth Employment Hubs in supporting young people aged 16-24 who are not in education, employment, or training (NEET), recommending increased funding, broader availability, and greater accessibility to further enhance their impact.

Closing the forgotten gap: Implementing a 16-19 student premium

A Education Policy Institute report advocates for a 16-19 student premium to address significant attainment and earnings gaps for disadvantaged students, recommending targeted funding based on combined student and area-level disadvantage criteria, building an evidence base to assess its impact, and enabling institutions to identify eligible students for early support.

Living standards, poverty and inequality in the UK: 2024

The Institute for Fiscal Studies has found that between 2021–22 and 2022–23, UK median household income fell by 0.5%, leaving it 1.6% lower than in 2019–20, similar to post-2008 declines. During the pandemic and cost-of-living crisis, poorer households' incomes stagnated, while middle- and high-income households saw slight declines. Temporary government support in 2022–23 stabilised poorer households' incomes, but this support has now ended.

Local labour markets, workforce planning and underemployment

Underemployment in the UK and Europe has risen since the 2008–9 financial crisis, with more people seeking longer hours or better jobs. This academic article investigates how labour market conditions and business models shape workforce planning and underemployment risks, particularly in less productive and weaker local economies. The authors discuss key priorities for labour market and employment policy.

Prevention is better than cure: Careers education and NEET reduction

In this guest blog, Oli de Botton, CEO of the Careers & Enterprise Company, discusses how early intervention can address the issue of too many 16–18-year-olds exiting the education and skills system.

How our surroundings shape our health

The Health Foundation have launched a resource highlighting how environmental factors, such as crime and pollution, impact health disparities across different groups, particularly affecting racialised communities and those in deprived areas, and provides recommendations and local authority dashboards for improvement.

Prosperity through health: The macroeconomic case for investing in preventative health care in the UK

A report by the Tony Blair Institute for Global Change argues that greater investment in preventive healthcare is crucial for addressing the economic impact of an aging population and rising economic inactivity, highlighting the long-term economic benefits and improved quality of life such measures can bring.

Long COVID: Job loss, work hours and mental health of workers

A study by Reuschke, Houston, and Sissons finds that Long COVID significantly impacts UK workers, particularly those aged 35-69, women, and those with pre-existing conditions. Workers with symptoms lasting over 28 weeks face a higher risk of leaving employment and suffer from reduced mental well-being, though they tend to adapt over time. Those with symptoms lasting 5-28 weeks experience increased sickness absence but no reduction in working hours. Income level also influences workplace adaptations for those with Long COVID.

Trailblazer devolution deals: The next oxymoron in the policy litany of sub-national governance in England?

An academic analysis highlights how recent devolution initiatives in England, including the Trailblazer Devolution Deals, continue a centralising trend, offering limited actual devolution, similar to previous government efforts that ultimately failed to deliver genuine local empowerment.

Birmingham City Council bankruptcy overreaction?

A new report by the Audit Reform Lab reveals that Birmingham City Council's financial crisis, leading to a section 114 notice, was driven by potentially overstated equal pay liabilities, compounded by austerity pressures, post-Covid demands, and a failed IT system, prompting possibly unnecessary, government-initiated cuts and asset sales that jeopardise its long-run financial sustainability.

Tax rises less regressive than spending cuts – how does the council financial crisis impact households?

Local authorities in England face a £4 billion funding gap, with Birmingham City Council (BCC) requiring £300 million to cover its deficit after serving a section 114 notice in 2023. Policy responses to this crisis will affect households differently. Matt Lyons and Kurt Kratena from the University of Birmingham analysed these impacts using their SEIM-UK economic model and explore policy lessons in their blog.

Time to shake up council tax?

Britain's current household taxation system is seen as unfair and impractical. Onward presents new proposals to replace council tax and stamp duty with a proportional property tax that would be fairer, boost economic mobility, and better fund local services.

Improving public funding allocations to reduce geographical inequalities

Addressing UK geographical inequalities has been difficult due to centralised governance, fragmented devolution, and constrained local authority resources. The new UK Labour Government prioritises reducing these disparities through community empowerment, partnerships, and proactive policies. However, efficient resource allocation remains a challenge, according to a recent City-REDI blog. The research team aims to support this by exploring funding mechanisms and policy reforms to better align public funds with local needs, contributing to more equitable development across England.

20 ways to improve the civil service

New ministers must reform the civil service to achieve their goals, addressing workforce management, high turnover, outdated pay structures, and limited external expertise. This paper by the Institute for Fiscal Studies outlines 20 actionable steps to improve workforce management, talent retention, performance, and external collaboration. These reforms can be implemented immediately to enhance the civil service’s effectiveness.

Ending the failure of regional policy – why Starmer must avoid ‘hyper-active incrementalism’

Dave Richards and Jack Newman of the Productivity Institute argue that frequent changes in policy initiatives aimed at addressing regional inequality have hindered progress. They suggest that for the new Labour government to succeed where others have failed, it must overcome "hyper-active incrementalism"—a pattern of constant adjustments with little substantial impact.

Cyanide spill in Walsall canal

A major incident was declared in Walsall last month after a toxic chemical spill involving sodium cyanide leaked into a 12-mile stretch of the canal network, prompting public warnings to avoid the area due to health risks and environmental damage, including dead fish and potential harm to wildlife.

Rapid review of the Environmental Improvement Plan announced

The Government has announced a rapid review of the Environmental Improvement Plan (EIP), aiming to develop a new statutory plan to meet Environment Act targets by addressing issues like pollution, waste, and species decline, with completion of the review set for the end of the year.

London Climate Resilience Review published

The London Climate Resilience Review, commissioned by the Mayor of London, provides 50 recommendations to prepare the city for increasingly severe climate impacts, focusing on strategic actions, investment, and capacity building, with a commitment from the Mayor to implement these measures in collaboration with government, local authorities, and communities.

Centre for Cities asks whether new towns are the answer to the UK’s housebuilding crisis

The Government's plan to create new towns to meet housing targets reflects historical patterns where new towns built more rapidly but contributed a modest share of total housing. According to the Centre for Cities, future success will depend on concentrating efforts in high-need areas, learning from past programs, and addressing planning and capacity challenges.

Consultation launch: National Planning Policy Framework and other changes to the planning system

This consultation seeks public input on proposed revisions to England's National Planning Policy Framework to support sustainable growth, including policy changes related to planning fees, local plan criteria, and thresholds for significant infrastructure projects.

Spatial planning changes not enough by themselves

The government's proposed planning reforms aim to empower mayors with enhanced spatial planning powers to improve city planning and boost housing supply, but success will depend on accompanying fiscal reforms and addressing local political challenges argues Centre for Cities.

The determinants of local housing supply in England

The Institute for Fiscal Studies has found that housing supply elasticity across 325 local authorities and 6,788 census tracts in England is low compared to other countries. Supply responsiveness to price changes is lowest in areas with limited land, higher elevation differences, higher historical population density, and where local planning authorities frequently rejected developments. Additionally, urban density and land constraints more strongly affect the supply of larger properties than smaller ones.

Could local development orders ease the housing crisis?

The Centre for Cities suggests using Local Development Orders (LDOs) to boost housing supply by streamlining the planning process around strategic transport hubs, but their limited use nationwide is due to their temporary nature and the ease with which they can be revoked, prompting recommendations to strengthen and extend LDOs for broader planning reform.

Major HS2 bridge completed

HS2 has completed its latest major bridge near Balsall Common in the West Midlands after 18 months of construction, marking a significant milestone with the bridge's installation now complete, paving the way for further landscaping and road relocation work.