Major announcements and releases in August 2024

WMCA Economic Dashboard

New figures were released in July for the Business Activity Index, enterprise births and deaths, counts of claimants and payrolled employees, and unique job postings. While some indicators moved in a negative direction, given the timing of the election, it is too early to state any significant changes in long-running trends.

Bank of England reduces base rate by 0.25%

The Bank of England reduced the base rate of interest from 5.25 to 5.00% on 1 August. This follows a reduction in headline inflation down to 2%. Interest rates are expected to continue to come down slowly over the next year and settle around a rate of 3.5%. This will be good news for many homeowners and should energise the economy as investors switch from saving to investing.

West Midlands sees FDI boost in 2023

In 2023, the West Midlands secured 127 foreign direct investment (FDI) projects, a 72% increase from 2022, with Birmingham leading outside London with 67 projects, contributing to a decade-high 12.9% share of UK projects, and significant growth in the Software, IT services, and manufacturing sectors.

Aston Professor talks elevating trade performance

Enhancing international trade is crucial for the West Midlands' economic growth, writes Professor Jun Du in this Greater Birmingham Chambers of Commerce blog. It requires support for small to medium enterprises (SMEs), infrastructure investment, market diversification, service trade opportunities, policy advocacy, and promoting regional strengths to overcome post-Brexit challenges, attract FDI, and maintain global competitiveness writes Jun Du.

Levelling up: it’s time to step up

The UK faces significant regional disparities in pay, employment, and living standards, with slow progress in addressing these gaps despite long-term efforts, writes the IFS. Boris Johnson's 2019 "levelling up" initiative aimed to bridge these divides by 2030, but progress has stalled, particularly in education where the target for 90% of 11-year-olds meeting standards has fallen. Major events like the pandemic have hindered progress, but with extensive research available, the next government has a foundation to build on and must act decisively.

Levelling up?

The latest National Institute for Economic and Social Research (NIESR) briefing looks at progress in ‘levelling up’ between the 2019 and 2024 elections. Between 2019/20 and 2023/24, the living standard pay gap between London and the West Midlands increased from roughly £4,400 per household to £7,000. Productivity differences between London and the West Midlands are also widening. Economic output per hour worked is projected to grow from £68 to £70 in London, while it is projected to fall from £32 to £30 the West Midlands. The paper argues for long-term investment to be spread more equally across the country.

Record number of visitors choose West Midlands in 2023

Data compiled by independent tourism research body, Global Tourism Solutions, with the West Midlands Growth Company, revealed the region attracted 145.4 million visitors in 2023 – an increase of more than four million people from previous year; the economic impact of the tourism sector soared 15% to a record £16.3 billion; and, the West Midlands Growth Company is launching a new visitor pass to build on record-breaking figures and enhance tourists’ experience.

PwC outlines Framework for Growth

PwC's Framework for Growth was launched in Birmingham on 11 July. It identified ten key components required in a growth plan in order to boost the UK economy. It analysed insights from business leaders and economic data, highlighting the components that could significantly enhance growth and productivity. The ten components identified included: skills, education and talent; innovation ecosystem; sustainability and environmental considerations; regional development and social inclusivity; infrastructure and planning; trade policy and promotion; cyber security and resilience; digital transformation; private sector investment; and tax and regulatory competitiveness.

Three new honorary professors give inaugural lectures on vital topics

Tera Allas, Catherine L. Mann, and Tony Venables, honorary professors at Alliance Manchester Business School, explored productivity's role in economic progress. Allas discussed AI's potential to boost UK productivity, emphasising the need for concurrent investments in skills and equipment. Mann analysed the high hurdle rate for UK business investment, highlighting the impact of managerial decisions and market conditions. Venables focused on policy design for transformational change, stressing the importance of targeting market distortions and coordinated policy actions to achieve lasting economic impacts.

IfG reviews need for increased capital spending in public services

Public service performance will suffer due to crumbling buildings, outdated IT, and insufficient equipment unless the next government changes its capital spending approach, writes the IfG. A new report reveals that historically low and poorly spent capital budgets have led to significant maintenance backlogs and poor conditions in health, education, and justice sectors. Despite recent spending increases, inefficient capital budget management persists. The report recommends a more capital-intensive spending review and improved oversight to achieve better outcomes.

Where should the next new UK town be placed?

Labour plans to address Britain's housing shortage by building 1.5 million new homes and creating new towns. UKDayOne has recommended that a new town is built in Tempsford, at the intersection of the East Coast Main Line and planned East-West Rail. This town could accommodate 250,000-350,000 people and serve as an employment hub, contingent on resolving the Welwyn Bottleneck on the East Coast Main Line to enhance rail capacity and connectivity.

ReWAGE release evidence paper on links between Good Work and innovation, productivity and employee health/wellbeing

The report examines the link between good jobs and organisational outcomes such as productivity, innovation, and employee wellbeing, using research from the Warwick Institute for Employment Research, and aims to support the development of a good employment charter in Northern Ireland to address economic challenges and improve job quality and management practices.

Zero-hour contracts

This report investigates the use of zero-hour contracts and examines policy options from comparable countries. In 2023 1.1 million working aged people were on zero-hour contracts in the UK. However, certain demographics are disproportionately affected. Women are 1.2 times more likely to be on zero hours contracts than men, Black workers are 2.7 times more likely and people from Mixed backgrounds are 2.3 times more likely than White workers to be on zero-hour contracts.

Eight principles to guide the new Local Growth Plans

In its manifesto, Labour announced it would require regions nationwide to develop Local Growth Plans. The goal is for politicians to collaborate with the private sector, educational institutions, and trade bodies to create growth plans that align with a national industrial strategy.

Business Growth West Midlands: Growth opportunity for Walsall businesses with dedicated free support

Oxford Innovation Advice will deliver the Walsall High Growth Business Programme on behalf of Business Growth West Midlands (BGWM), funded by £428k from the UK Shared Prosperity Fund, to support over 200 Walsall businesses. The program, focusing on sectors like manufacturing and diverse groups, will offer advice, diagnostics, and account management. Building on Walsall Council’s initiatives, it aims to enhance economic growth and resilience. Workshops will cover resilience, digital marketing, and innovation. The initiative is part of the West Midlands’ £42 million investment from the UKSPF.

Business Model Innovation: a critical enabler of productivity improvements

The business model concept, long utilised by practitioners and scholars, has gained recent prominence. Harvard historian Alfred Chandler highlighted that from 1840 onwards, American firms transformed through vertical and horizontal integration, driven by the advent of railroads for transportation, telegraphs for communication, and coal as a major energy source. Read more in the Productivity Institute blog.

New care leavers innovation toolkit

Care leavers will benefit from a new toolkit designed by Warwick Business School researchers to help organisations implement innovative ideas. Developed over four years with the Care Leavers Association, Barnardo’s, and the National House Project, the Implementation Toolkit aims to prevent promising ideas from getting stuck in trials. It identifies five key ingredients for successful innovation: organisational receptiveness, co-production with care-experienced youth, shared leadership, outcome measurement, and adaptability.

Participation in education, training and NEET age 16 and 17

The ONS have reinstated local NEET data. In the West Midlands region, the proportion of 16–17-year-olds who were identified NEET increased by 0.2pp from 2.4% in 2019 to 2.6% in 2023. With England having the same proportional increase. The West Midlands region NEET proportion is below the national average by 0.2pp and the fourth lowest region.

Department for Education (DfE) Apprenticeships

DfE have published the latest apprenticeship, starts, achievement and participation data. In the West Midlands region there were 576 apprenticeship starts per 100,000 between August 2023-January 2024 and 216 achievements per 100,000 during the same time period. Higher than the national average.

Brain drain continues in West Midlands

ONS have published the latest data from DfE on outcomes for higher education leavers covering the 2021/22 tax year. Of the 56,890 West Midlands graduates in 2016/17, 54.6% had left the region five years after graduating, and 19,280 graduates from institutions outside the West Midlands moved into the region.

Essential Employment Skills

A new report from the National Foundation for Educational Research finds significant Essential Employment Skills (ESS) deficiencies in the labour market. 3.7 million workers (13%) in 2023 have EES deficiencies, which is forecasted to grow by up to 7 million by 2035. 14% of the UK labour market have EES under-utilisation (possessing higher skills than those required to do their job) which is particularly common in skilled trades, customer service and administration sectors. EES deficiencies are more common among young people and long-term unemployed.

A new Skills Levy for growth and opportunity

This report by the Learning and work Institute finds employer investment in staff training has decreased from 26% since 2005 and apprenticeships are down by 34% since 2015/16, before the levy was introduced. The report sets out proposals for change to Skills Levy.

BGWM: Building a Resilient Workforce

Resilience in business involves equipping staff to handle change, essential for growth and survival. It improves job satisfaction, self-esteem, and productivity. Employees experience a range of emotions during change, described by the Kubler-Ross Change Curve, and must be supported to avoid burnout. This blog piece covers strategies to foster resilience include cultivating a growth mindset, developing emotional intelligence, building support networks, setting realistic goals, and practicing flexibility and adaptability.

Education Policy Institute releases annual report

The Education Policy Institute's annual report on the disadvantage gap in pupil performance, using data from various educational stages, has become essential for policymakers and sector leaders. Despite pandemic disruptions, the 2023 report offers the first comprehensive post-pandemic assessment, emphasising the continued impact of COVID-19, pre-existing widening inequalities, and rising child poverty, urging evidence-based government interventions to close these gaps.

WPI discuss delivering skills for growth

The UK faces economic challenges from stagnant productivity and rising inequality, necessitating Labour's urgent focus on skills development to boost growth. Key recommendations in the report include accelerating T-level roll-out, improving access and awareness, and ensuring all post-16 qualifications meet national standards, to address skills shortages, align with OECD best practices, and fill critical gaps, especially in technical fields. If this can be done, it will support the industrial strategy and reduce the estimated £39 billion annual economic impact of skill shortages.

Deepening the Opportunity Mission of the new Labour government

A new report from the Fairness Foundation explores why tackling inequality is key to the success of Labour’s opportunity mission. Young people from disadvantaged backgrounds are disproportionately faced with barriers to opportunities. Since the start of the 2023/24 academic year, 48% of pupils have experienced hardship that has interrupted their learning. The inequality continues into higher education, with 29% of disadvantaged students attending university compared to 49% of non-disadvantaged students.

Substantial rise in long-term mental health hits Midlands firms

A new Enterprise Research Centre report reveals a significant rise in long-term mental health absences among Midland's businesses, with 47.2% of firms reporting such cases in 2024, up from 38% in 2023. Presenteeism remains high, affecting over a third of businesses. While 57% of firms now offer mental health initiatives, up from 52% in 2023, nearly 80% believe they should, highlighting a gap between intention and action. Productivity can drop by 25% due to workplace mental health issues.

Centre for Society and Mental Health looks at what could replace the Work Capability Assessment

The UK government plans to replace the Work Capability Assessment (WCA) with a system based on Personal Independence Payment (PIP) assessments, aiming to address its flaws. However, the new system's effectiveness remains uncertain, with potential best- and worst-case scenarios outlined in this report, which emphasises the need for comprehensive reform to improve trust, reduce poverty, and ensure administrative justice for disabled claimants.

Education Data Lab looks at the rising numbers of Education, Health and Care Plans

According to the blog, the latest statistics reveal a significant increase in the number of young people in England with Education, Health and Care (EHC) plans. Since their introduction in 2014/15, the number of EHC plans has more than doubled. This increase is evident even when adjusting for population growth and focusing on pupils aged 5 to 15. The analysis suggests that the rise in EHC plans may be driven by a need for access to educational support services.

To each according to need?

In 2022-23, over £245 billion funded key public services across England. Funding varied widely, reflecting local needs. More-deprived, urban areas generally received higher per capita funding. However, discrepancies existed between actual funding and estimated needs, especially in local government and police services, according to the IFS report. For instance, the most-deprived areas received 3% less funding than needed, while the least-deprived received 3% more. Addressing these funding imbalances is crucial for equitable service delivery and reducing geographical inequalities.

Fixing public services

This report explores the past 14 years, in which Conservative-led governments have significantly cut public service budgets, resulting in poor infrastructure, outdated equipment, and widespread recruitment issues. This has led to a decline in service performance and increased public sector strikes. Despite acknowledging the severity of the situation, Labour's proposed spending plans suggest real-term cuts, risking further deterioration in public services by the next election in 2028/29. Immediate action is needed in key areas like health, local government, and criminal justice.

London Climate Resilience Review published

The Mayor of London commissioned an independent review to assess and recommend strategies for enhancing London's climate resilience following severe weather events, resulting in 50 recommendations aimed at various stakeholders to improve preparedness and protect the city's health and economy.

Climate Change Committee releases progress report to Parliament

The UK has reduced emissions by over a half, but recent slowdowns in policy progress necessitate urgent action from the new government to meet 2030 targets, according to the report. Actions needed include accelerating low-carbon technology adoption, reversing policy rollbacks, and enhancing climate adaptation efforts.

Social Market Foundation reviews unequal access to benefits of electric vehicles

Electric vehicles (EVs) in Britain, though beneficial for reducing transport poverty and emissions, are currently less accessible to low-income households due to high upfront costs. Recommendations in the SMF publication include adopting a social leasing model to make EVs affordable for low-income households, potentially lifting over 500,000 people out of poverty and cutting significant carbon emissions annually.

Clean power by 2030?: How could a Labour government achieve its mission for power sector decarbonisation?

A Labour government must tackle 10 major barriers to meet its 2030 clean power target, requiring immediate action in its first 100 days, according to the IfG. Key issues include grid capacity, supply chain and skilled worker shortages, public engagement, and speeding up the planning system. Historical successes show the UK can achieve large projects.

Insecure work and housing

This Work Foundation report used the labour force survey to explore the relationship between insecure work and housing. It found that, in 2023, 6.8 million (21.4%) people in the UK were in severely insecure work, 1.4 million of which are in privately rented accommodation. Insecure working conditions, such as unpredictable pay, irregular hours and lack of rights and protections make workers vulnerable to losing their jobs. This leaves them at risk of living in poor quality housing and insecure housing tenures, with people from Black or Asian households or the millennial generation disproportionately affected.

2027 Invictus Games to provide boost to regional economy

The WMCA area’s visitor economy is set to get a boost worth "tens of millions" after Birmingham won the race to host the 2027 Invictus Games - the huge sporting event founded by Prince Harry for injured military veterans - expected to draw in more than 100,000 visitors.

PepsiCo announce big investment in Coventry

PepsiCo has announced a £13m investment into its Coventry factory – known as the ‘home of Doritos’. Funds will be used to replace a manufacturing line with brand-new equipment, including more efficient machinery that will reduce the site’s greenhouse gas emissions by over 700 tonnes a year.

West Midlands secures quantum technology hub

Five quantum technology hubs, including one in Birmingham, will be developed across England and Scotland in a £100m boost. Hubs will be delivered by the UKRI Engineering and Physical Sciences Research Council (EPSRC), following a £106m investment from EPSRC, the UKRI Biotechnology and Biological Research Council, UKRI Medical Research Council, and the National Institute for Health and Care Research.

Go ahead given for phase II of Brownhills Business Park redevelopment

Phase two of the Brownhills Business Park redevelopment has been given the green light to go ahead. The site at Maybrook Industrial Estate is currently home to several warehouse-type buildings in various conditions. Once complete the Walsall Wood development will boast nine ‘sustainable and energy efficient’ employment units totalling 9000 square metres, ready for businesses to move in and fit out as needed.

Birmingham selected as host for 2027 Invictus Games

Birmingham will host the 2027 Invictus Games, beating Washington DC. This event, featuring injured military personnel and veterans, will return to the UK for the first time since its 2014 debut in London. Held at the NEC, the games will be funded by the government and private sector, with no financial input from Birmingham City Council. Prince Harry praised Birmingham's armed forces ties, and the event will introduce new sports like pickleball, laser run, and esports.

Birmingham City Council publish Community Safety Dashboard

The Birmingham Community Safety Dashboard, created with local partnerships, supports the Serious Violence Duty introduced in January 2023. Led by the Birmingham Community Safety Partnership, it provides detailed crime data analysis by age, gender, ethnicity, and location. The dashboard aims to improve understanding and prevention of serious violence in Birmingham. It combines public, police, and research data to inform policy, support victims, and address crime drivers.

Over 1,000 knives and guns destroyed thanks to PCC weapon bins

West Midlands Police and Crime Commissioner’s weapon surrender bins led to the safe deposit of 1,118 dangerous weapons from April to June, nearly doubling last year's figures. Commissioner Simon Foster highlights their impact on community safety, noting that each weapon surrendered potentially saves a life. The bins in Birmingham and Solihull, the Black Country, Wolverhampton, and Coventry collected a significant number of weapons, with 431 in Birmingham and Solihull alone.

IFS weighs into two-child benefit cap debate

Labour MPs have been pressuring the new government to end the two-child benefit limit right away, a policy that has increased child poverty by capping benefits for families with more than two children. While Labour aims to abolish it when fiscal conditions improve, the policy impacts nearly three million children. According to the IFS, removing it could reduce relative child poverty by half a million but raises fairness debates regarding financial trade-offs for larger families.

IPPR review support for labour pledges by constituency that voted them in

Labour's landslide victory saw them win 218 new seats (411 in total), creating a mandate to address economic and social issues. A new major poll shows the different strengths of opinion on key labour pledges by constituency – old and new. While there is strong support for investment in public services, housing, climate action, and stronger labour rights, opinions on taxation and immigration vary, presenting challenges. The Labour government needs to act quickly, according to the IPPR, as voters expect significant improvements, particularly in the NHS, economy, and cost of living, within two to three years.

What went wrong for the Conservatives?

The Conservatives faced a historic defeat in the 2024 election, losing two-thirds of their seats and nearly half their vote share. Analysing this, Onward’s report "Breaking Blue" highlights factors like age, income, geography, and the Brexit vote. Key issues included the Partygate scandal, Liz Truss’s mini-budget, and collapsing competence. To recover, the report argues, the Conservatives must appeal to former Reform and Liberal Democrat voters, who share demographic similarities and key concerns with traditional Conservative voters.

IfG breaks down ‘mission-driven government’

A mission-driven government focuses on achieving specific, bold goals that address key societal challenges, driving innovation, shaping markets, and fostering collaboration across various sectors to create significant and measurable impact. See a exploration of the term here.

Families and careers: IFS reviews evidence on lifetime gender pay gaps

Using data from 17 European and North American countries, the study finds that employment and earnings gaps between mothers and non-mothers and between mothers and fathers narrow significantly by age 50, particularly among the highly educated. But persistent earnings gaps remain due to part-time work among women and higher earnings for fathers compared to non-fathers.

IFS reviews pensioner incomes and poverty over recent years

According to the new report, median pensioner incomes grew significantly, reducing poverty among pensioners from 2002-2012. Post-2011, pensioner income growth aligned with working-age incomes, but poorer pensioners' incomes lagged, raising poverty rates. State pension reforms and increased private pension incomes boosted average incomes, especially for women. During the pandemic, lower-income pensioners saw improved income growth. However, financial difficulties persisted due to rising living costs, increasing material deprivation among pensioners.