North East LEP Labour Market statistics reaction 14 December 2016

Richard Baker, North East LEP Head of Strategy and Policy, said:

Today’s ONS statistics for the North East mirror those of the national economic picture which suggest a slowing down in the UK labour market over the last quarter.

Whilst the position remains much improved on the position a year ago, employment numbers are currently largely static overall. Unemployment has fallen again slightly, while the numbers of people economically inactive has increased.

Within the employment figures for the region, one detail is that we are seeing an increase in the number of people in full-time work which is encouraging, with a drop off in the numbers of people in part-time and temporary work.

Today’s employment figures: Sustained job creation and falling unemployment

Richard Baker, North East Local Enterprise Partnership Head of Strategy and Policy, said today’s Office for National Statistics employment data continued to demonstrate a longer term picture of positive labour market performance in the North East.

“Employment in the North East now stands at another record high this quarter at 1.215 million people, that’s 51,000 more people in work than 12 months ago,” said Richard.

“The rate of growth in the number of people in employment in our region is growing faster than the English average both over the last quarter and the previous year, which is very encouraging.

“We are continuing to narrow the employment rate gap with the English average.

“Today’s figures also show that the number of people out of work has fallen again, by 20,000 in the three months to September and nearly 30,000 fewer people in unemployment now compared to one year ago.

“We are also seeing a continuation in the rise of permanent jobs for both men and women which is encouraging.

“It remains a concern however that the number of people economically inactive is rising.

“The reasons for this are unclear from this data but could be related to a fall in the number of people in self-employment in the North East over the past year, in contrast to the national trend, and unstable jobs.

“This requires further investigation into what is a complex picture. Our concern is to ensure that the quality of employment opportunities continues to improve.”

Come and work at the North East LEP

The North East Local Enterprise Partnership is currently recruiting for two new full-time roles, to help us deliver more and better jobs in the North East.

First is a fixed term contract for an ESIF (European Structural Investment Funds) Programme Manager.

The successful candidate will work with partners and raise awareness of the 2014-2020 ESIF programmes across the North East.

This will include running regional events to promote the launch of project calls, coordinating and supporting local partners with their local ESIF events, and supporting local partners in the development and management of a robust pipeline of ESIF projects that will support the delivery of the ESIF Operational Programmes, the North East LEP area ESIF Strategy and the Strategic Economic Plan.

To apply for this position or to find out more about the role, please click here. The closing date for applications is Friday 24 June.

We are also currently recruiting for a permanent Skills for Business Manager to join the new North East LEP executive team.

The successful candidate will take the lead in identifying what businesses within the North East require both now and in the future for businesses and the economy to grow. The post holder will work with business and education providers to design and implement a demand led skill strategy.

To apply for this position or to find out more about the role, please click here. The closing date for applications is Wednesday 29 June.

We look forward to hearing from you.

A refreshed SEP to reflect changing times

Richard Baker, Head of Strategy and Policy at the North East LEP, gives an update on the refresh of our Strategic Economic Plan.

The North East Strategic Economic Plan – or SEP for short – is the region’s road map to economic success.

It is our medium-term economic plan for the North East LEP area.

It sets out clearly how the LEP and the North East Combined Authority support economic growth and details the advice we give to Government about the most important investments needed for our area.

The SEP focuses on the sectors and areas that make our regional economy tick: innovation, business support and access to finance, skills, employability and inclusion, economic assets and infrastructures and transport and digital connectivity.

Like all plans setting out a course of action to reach milestones further down the road, it needs updating to reflect changing times.

The original SEP was unveiled back in March 2014.

It was born out of the evidence base of the Adonis Review of 2012 – and the data which underpinned that report was from two years previous.

The economic data in the current SEP is based on a period when we emerged from recession rather than where we are at now.

A series of new policy documents will impact our future economic planning and decision-making – a national innovation plan, new national infrastructure commission and an emerging devolution deal.

In the light of these shifting sands, the North East LEP board has agreed with the North East Combined Authority that now is the right time to look again at parts of the SEP, taking into account new evidence of the region’s economic position and evolving public policy environment.The SEP refresh is just that.

Not a rewrite, but a look again at how we reach our ambitious target of creating an extra 100,000 more and better jobs by 2024.

We are hard at work on this process.

We are examining with sharp focus our opportunities to be competitive nationally and internationally in the smart specialisation areas and growth sectors.

These are passenger vehicle manufacture, subsea, marine and related advanced manufacturing, life sciences and health and creative, digital software and technology based services.

We are looking to see high levels of productivity in these areas and to work out our position within the Northern Powerhouse to ensure we have the strong profile our region needs to seize maximum advantage from the opportunities it presents.

The views of stakeholders are crucial to our refresh work. They will contribute substantially to the evidence base, credibility and application of the SEP.

We’ll be seeking the views of business, the public and third sectors at a series of workshops running either side of the EU referendum during the summer.

There will also be an online survey for people to feed their views into the refresh process.

Details of how stakeholders can take part in the SEP refresh will coincide with the launch of our engagement activity in June and more information about how businesses can input will be available soon.

These views will be fed into the work to create an updated SEP which will be unveiled later this year.

Two other important pieces of work will support this refresh.

One is an economic analysis paper, which has been independently verified and looks at where we are now, compared to then back in 2014 and the next steps the region needs to take. We would encourage businesses to get in touch if they have more research or evidence to strengthen the economic analysis paper we have produced.

The second is a progress review of SEP delivery to date to show what has been done set against the SEP’s original plans.

The progress review looks right across leadership and governance structures, programme development, resource acquisition and investment.

Our aim with stakeholders is to provide the North East LEP area – from County Durham to the Northumberland – with an updated strategic economic plan which better reflects today while future proofing for tomorrow.

Richard Baker

Head of Strategy and Policy

North East Local Enterprise Partnership

[email protected]

Gear for Girls in Wooler on paying a decent wage

Alison Wright is the owner of Northumbrian SME Gear for Girls, providing outdoor and fitness clothing for women. The company was set up 10 years ago and employs 6 staff. 90% of their business is online.

It makes a huge difference to your staff
“We’ve always paid above the National Minimum Wage, it just seemed the right thing to do. You don’t want staff feeling that they are under pressure to support themselves and so it made sense to pay a decent wage. It really makes a huge difference to your staff if they’re being paid properly – they want to continue working for you and, if they are a happy workforce they want to put in their best effort. As a business, you get it back. I don’t think you get that if you don’t pay people a decent wage that they can live on.”

Reputation is everything
“For a business, your reputation is everything. And at the end of the day your business is about your staff- if your staff aren’t good your business won’t be good. You can’t separate the two. If you want good staff, you have to pay them at a level that they are comfortable with and so they know that they are being appreciated for what they do.”

The Government’s new National Living Wage becomes law in April. Make sure your business is ready. Visit website for details.

National Living Wage becomes law on 1 April 2016

On 1 April 2016 the National Living Wage will become law. The Government is urging businesses to prepare early for the changes and make sure they follow these four simple steps:

• Know the correct rate of pay – £7.20 per hour for staff aged 25 and over
• Find out which staff are eligible for the new rate
• Update the company payroll in time for 1 April 2016
• Communicate the changes to staff as soon as possible.

The National Living Wage will provide a direct boost to over one million workers in the UK this year – rewarding and providing security for working people.

By taking these measures, companies will be able to properly reward their staff and avoid falling foul of the law when it takes effect.

The new National Living Wage is a key part of the Government’s plan to continue to move to a higher wage, lower tax and lower welfare society, building a more productive country and giving families the security of well-paid work.

You can find out more by visiting Join the conversation on Twitter by following @bisgovuk and the hashtag #NationalLivingWage.

North East long-term employment rises but some concerns in latest figures

The North East LEP has welcomed the longer term positive changes to the region’s employment rates but cautioned that shorter term fluctuations highlight the need for ongoing monitoring of the regional economy.

The latest ONS figures, published today, show that North East employment rate for the period May to July 2015 have fallen from 68.8 per cent to 68.1 per cent in the past year. This is against a backdrop of a growing working age population (16 – 64 years), which has increased by 9,000 to around 1.7m people. However, looking at longer term changes, the employment rate in the North East has increased from 67.3 per cent since May-July 2013.

The North East has also experienced a decline in the unemployment rate over this period. The current unemployment rate for the North East region stands at 8.6 per cent, notably lower than the 9.9 per cent of last year. The North East has seen this longer term improvement in labour market outcomes despite a rise in unemployment in the last quarter from 7.6 per cent. The region’s current unemployment rate was the highest in UK, which has an average rate of 5.6 per cent.

The inactivity rate in the region has risen over the past year from 23.7 per cent to 25.5 per cent, and remains a key concern for our economy. The average inactivity rate for the UK is 22.1 per cent. The North East inactivity rate has remained comparatively high since the end of the recession, although more of those classed as inactive declared they want to work over the last year.

In addition, the number of self-employed people in the region rose from 10.3 per cent to 11.3 per cent between 2013/14 to 2014/15, with 7,000 more women now self-employed. Over the same period, the number of over-65s in the workforce jumped from 5.2 per cent to 6.3 per cent.

The ONS figures for the region showed that a further 8,000 manufacturing jobs were created in the last year, while the proportion workforce jobs provided by the service sector rose from 81.7 per cent to 82.6 per cent, fuelled by the accommodation and food services, retail trade of repair of motor vehicles, health and social work and art and entertainment sectors. There was a decline of 6,000 construction jobs.

Chief Economist of the North East LEP, Chris Milne said: “Whilst today’s figures present a disappointing picture in the short term, they also demonstrate clear progress in the North East labour market over the past couple of years, helping to move us towards the targets we have previously set out in our strategic economic plan.

“The latest inactivity and unemployment rates highlight the need for more and better jobs in the region through addressing both supply and demand side issues in the regional economy and we have seen recent growth on the demand side. Between 2013 and 2014 3,000 new enterprises were created in the North East, a 5% increase.

“We are continuing to scrutinise labour market statistics which form an important part of our evidence base. To this end we have recently increased our team’s analytical capacity and I would like to welcome Fiona Thom to the team who has joined us from the Department for Health.”

North East employment rises to nearly 1.2m

North East LEP Chief Economist Chris Milne examines the latest Labour Market Statistics and concludes that while there are still challenges to overcome, the figures provide more evidence that the regional economy is continuing to grow in the longer term.

An important part of my role is understanding and analysing the evidence that supports the North East LEP’s strategic plan and shapes our approach to economic growth.

One of the best measures is the labour market statistics produced by the Office for National Statistics.

The latest figures provide us with some interesting, but mixed messages about the North East economy.

  • Employment of people aged 16+ has risen by 17,000 to near record levels to stand at almost 1.2m
  • There are now 32,000 fewer people out of work aged between 16-64 – that’s a 25% fall compared to the same period a year ago
  • Unemployment in the North East has fallen rapidly. The number of people out of work over the past year has dropped from 9.9% to 7.6%. That fall over the past year is almost twice the average for England
  • The traditional working age population of the North East has continued to rise, with 5,000 more people aged 16-64
  • Our employment rate has stayed at near record levels at 69.3%, but has fallen below its highest ever recorded level of 70.2% in the previous quarter
  • We have seen a continuation in the falling number of people claiming Job Seekers Allowance or Universal Credit in the region over the past year, down by nearly 18% to stand at 46,700. The claimant count is now at its lowest level since January 2008.

New figures published today by UKTI also demonstrate where some of the growth is coming from.

In 2014/15 UKTI recorded 44 successful foreign direct investment projects in the North East LEP area, generating around 3,200 jobs – treble that of the previous year.

With UKTI, we supported 42 of these projects, bringing significant benefits to our region.

But the North East economy still has its challenges.
Our rising population puts extra pressure on our economy to maintain and improve upon our high employment rate relative to previous years.

The wider 16+ population has risen by 16,000 in the past year, faster than the 16-64 age band.

Whilst the unemployment rate is decreasing and we are beginning to close the gap with the national average, it is still high in comparison with its current jobless level at 7.6% against the English national average of 5.6%.

Another challenge is the inactivity rate (a measure of the percentage of the population not looking for work) which has increased by 2.1 percentage points in the year to April 2015.

Inactivity remains one of my key concerns for the region but our economic activity rate of 75.1% is still high when compared to historical data for the North East region. Encouragingly, today’s official statistics show there is now a greater percentage of people who are inactive but want a job.

Short term fluctuations in statistics are to be expected and it’s our longer term trajectory and progress towards the targets we set out in our Strategic Economic Plan that are important.

This is an area I will be keeping a close eye on as we deliver our plan for economic growth, and move into a new Parliament complete with all the new challenges and opportunities that presents for our region.

North East closing employment gap with rest of England

The North East LEP today welcomed the latest regional labour market statistics which revealed the local economy outperforming the English average in creating more jobs.

Office for National Statistics data shows that the employment of people aged 16-64 in the North East increased by 12,000 in September to November 2014 and was up 33,000 on the same period 12 months earlier.

The North East employment rate outperformed the average for England in the last quarter and compared to the same period in 2013 – maintaining a longer term trend of more people in work and fewer out of work.

The North East employment rate now stands at 69.7%, just shy of the record rate of 70%, a 3% increase compared to a year ago.

While the English average employment rate stands at 73.3%, it did not change compared to the previous quarter and increased by only 1.5% on the year.

The North East unemployment rate continued to fall from 10.4% at the end of 2013 to 8.7% in the last quarter. Claimant count data for December 2014 also shows there are 1,600 fewer people claiming Job Seekers Allowance in the North East compared to November 2014 – nearly 22,000 less than December 2013.

The inactivity rate – a measure of the percentage of the population not looking for work – has also fallen in the North East by 3.3% to 23.7% over the 12 months to November 2014 while in England it has remained unchanged over that same period.

North East LEP Chief Economist Chris Milne said: “As the North East Independent Economic Review and our economic plan recognise, it’s essential we concentrate on closing the gap in employment rates with the rest of England.

“We are at the beginning of this process, but these latest statistics show that we are making substantial progress.

“Today’s data released by the ONS shows that the North East continues to achieve better labour market outcomes and is catching up with the rest of the country.

“This is not just a short term trend but part of a longer term trajectory for the area’s economy which is encouraging.

“A key objective of the North East’s strategic economic plan is to deliver more and better jobs for everyone – this underpins our approach to creating sustainable growth and greater competitiveness for the North East.”