The West Midlands needs to address its dismal employment rates

Birmingham looking festive. Image: Getty.

With the Midlands Engine policy, Joseph Chamberlain’s legacy being back in vogue and – perhaps most notably – CityMetric’s recent tour around the area, the West Midlands is finally getting the attention it deserves. Over the next few months, the run-up to the election of a metro mayor in the West Midlands Combined Authority (WMCA) should mean even more thought is given to what’s needed to help the region thrive.

And top of that list should be turning around its dismal employment performance.

The West Midlands’ rusty jobs machine isn’t a new problem, as a report published this week by the Resolution Foundation highlights. In the years leading up to the financial crisis, the conurbation’s employment rate remained stubbornly low compared to other city regions.

And while the recovery has seen the proportion of people in work nationally rising to record levels, the West Midlands still hasn’t got back to where it was, with an employment rate of just 64.5 per cent compared to 71.6 per cent across all the city regions.

The WMCA is made up of Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton – diverse areas with different histories and populations. But bar Solihull, each of those local authorities has an employment rate below the average across the UK’s other city regions. A cross-city plan is needed.

The big challenge for the new mayor, along with other local leaders and central government, is helping people from groups that have traditionally been disadvantaged in the labour market to find work. That doesn’t mean that we should expect, say, people with disabilities to have identical employment rates to the rest of the country. But the gap between the kinds of workers who tend to be in employment whatever the economic weather – in their thirties or forties, highly-educated – and these disadvantaged groups is significantly larger in the WMCA than in other city regions. Targeted support designed to help some of those groups that fare worst in the the region – younger workers, those with low qualifications and people from BAME backgrounds – could make a meaningful contribution.

Of course, it’s not enough to just think about potential employees: the kinds of jobs and sectors setting up in the city region are crucial too. The WMCA can be rightly proud of its industrial heritage, still evident today with companies like Jaguar Land Rover. And while a higher share of the WMCA’s workforce are employed in manufacturing, it’s still only 13 per cent. The city region should also look to expand into more “jobs-rich” areas such as the high value services sector. When it comes to industrial strategy, it should be proud of, but not constrained by, its past.


And hand in hand with attracting those sorts of jobs is having workers with the right skills. Qualification levels in the WMCA are below average. Despite having one of the highest proportions of students among city regions, it has trouble retaining them once they graduate, with fewer staying on than in Bristol or Manchester. More high-skilled jobs would help – but it’s worth thinking too about what those other “stickier” cities offer and how the WMCA can mark itself out and tap into the asset of its large student population.

While the mayor will have powers that can make a real difference, a shared focus with central government and other leaders in the West Midlands will be needed to boost employment. But with a targeted, ambitious plan that puts jobs growth at its heart, there’s every reason to hope that the West Midlands will be talked about for all the right reasons for years to come.

Conor D'arcy is a policy analyst at the Resolution Foundation.

Want more of this stuff? Follow CityMetric on Twitter or Facebook.

 
 
 
 

Is Britain’s housing crisis a myth?

Council housing in Lambeth, south London. Image: Getty.

I’ve been banging on about the need for Britain to build more houses for so long that I can no longer remember how or when it started. But at some point over the last few years, the need to build more homes has become My Thing. People ask me to speak at housing events, or @ me into arguments they’re having on Twitter on a Sunday morning in the hope I’ll help them out. You can even buy a me-inspired “Build More Bloody Houses” t-shirt.

It’s thus with trepidation about the damage I’m about to do to my #personal #brand that I ask:

Does Britain actually have enough houses? Is it possible I’ve been wrong all this time?

This question has been niggling away at me for some time. As far back as 2015, certain right-wing economists were publishing blogs claiming that the housing crisis was actually a myth. Generally the people who wrote those have taken similarly reality-resistant positions on all sorts of other things, so I wasn’t too worried.

But then, similar arguments started to appear from more credible sources. And today, the Financial Times published an excellent essay on the subject under the headline: “Hammond’s housebuilding budget fix will not repair market”.

All these articles draw on the data to make similar arguments: that the number of new homes built has consistently been larger than the number of new households; that focusing on new home numbers alone is misleading, and we should look at net supply; and that the real villain of the piece is the financialisation of housing, in which the old and rich have poured capital into housing for investment reasons, thus bidding up prices.

In other words, the data seems to suggest we don’t need to build vast numbers of houses at all. Have I been living a lie?

Well, the people who’ve been making this argument are by and large very clever economists trawling through the data, whereas I, by contrast, am a jumped-up internet troll with a blog. And I’m not dismissing the argument that the housing crisis is not entirely about supply of homes, but also about supply of money: it feels pretty clear to me that financialisation is a big factor in getting us into this mess.

Nonetheless, for three reasons, I stand by my belief that there is housing crisis, that it is in large part one of supply, and consequently that building more houses is still a big part of the solution.

Firstly I’m not sold on some of the data – or rather, on the interpretation of it. “There is no housing crisis!” takes tend to go big on household formation figures, and the fact they’ve consistently run behind dwelling numbers. Well, they would, wouldn’t they? By definition you can’t form a household if you don’t have a house.

So “a household” is not a useful measure. It doesn’t tell you if everyone can afford their own space, or whether they are being forced to bunk up with friends or family. In the latter situation, there is still a housing crisis, whatever the household formation figures say. And there is plenty of anecdotal evidence to suggest that’s the one we’re living in.

In the same way I’m not quite convinced that average rents is a useful number. Sure, it’s reassuring – and surprising – to know they have grown slower than general prices (although not in London). But all that figure tells you is the price being paid: it doesn’t tell you what is being purchased for that payment. A world in which renters each have their own property may have higher rents than one in which everyone gets one room in an over-crowded shared flat. It’s still the latter which better fits the label “housing crisis”.

Secondly, I’m entirely prepared to believe we’ve been building enough homes in this country to meet housing demand in the aggregate: there are parts of the country where housing is still strikingly affordable.

But that’s no use, because we don’t live in an aggregate UK: we live and work in specific places. Housing demand from one city can be met by building in another, because commuting is a thing – but that’s not always great for quality of life, and more to the point there are limits on how far we can realistically take it. It’s little comfort that Barnsley is building more than enough homes, when the shortage is most acute in Oxford.

So: perhaps there is no national housing crisis. That doesn’t mean there is not a housing crisis, in the sense that large numbers of people cannot access affordable housing in a place convenient for their place of work. National targets are not always helpful.


Thirdly, at risk of going all “anecdote trumps data”, the argument that there is no housing crisis – that, even if young people are priced out of buying by low interest rates, we have enough homes, and rents are reasonable – just doesn’t seem to fit with the lived experience reported by basically every millennial I’ve ever met. Witness the gentrification of previously unfashionable areas, or the gradual takeover of council estates by private renters in their 20s. 

A growing share of the population aren’t just whining about being priced out of ownership: they actively feel that housing costs are crushing them. Perhaps that’s because rents have risen relative to wages; perhaps it’s because there’s something that the data isn’t capturing. But either way, that, to me, sounds like a housing crisis.

To come back to our original question – will building more houses make this better?

Well, it depends where. National targets met by building vast numbers of homes in cities that don’t need them probably won’t make a dent in the places where the crisis is felt. But I still struggle to see how building more homes in, say, Oxford wouldn’t improve the lot of those at the sharp end there: either bringing rents down, or meaning you get more for your money.

There is a housing crisis. It is not a myth. Building more houses may not be sufficient to solve it – but that doesn’t meant it isn’t necessary.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

Want more of this stuff? Follow CityMetric on Twitter or Facebook