West Midlands is now employment blackspot, says thinktank

Jaguar Land Rover

The West Midlands has become an employment blackspot and is badly trailing behind other parts of the UK on job creation and living standards, a leading think tank has warned.

These considerations pushed the region into voting to leave the European Union, said the Resolution Foundation.

The West Midlands now has the lowest employment rate of any other big city region – 64.5% compared with an average of 70.9% – and lags behind the UK average on growth, pay and income.

The Guardian reports that the thinktank called on government to do more to help Birmingham and the surrounding area and said the new metro mayor for the West Midlands, who will be elected next May, must prioritise creating high-quality jobs, improving productivity, and tackling a long-standing skills shortages.

The West Midlands delivered the strongest vote to leave the EU of any region in the UK once characteristics such as age and income were discounted. Walsall, Sandwell and Dudley particularly supported Brexit. Resolution said there were strong links between pro-leave sentiment and the employment problems, which stretch back to before the 2008 global financial crisis.

Conor D’Arcy, author of the report and a policy analyst at Resolution, said: “The West Midlands’ terrible record on job creation has created a huge employment blackspot and was a key factor behind its overwhelming vote to leave the EU.

“Turning the city region’s economic prospects around will be a huge task facing the new mayor, and they should have the full backing of central government too. Whitehall should recalibrate its flagship Midlands engine project to supporting the new mayor in overseeing a long overdue jobs boom across the West Midlands.”

The region, which has a population of 4 million and encompasses Birmingham, Coventry and Wolverhampton, entered the downturn with the lowest employment rate of any city region. Employment prospects have only improved at a “glacial pace” since, Resolution said, despite success stories such as the revival of Jaguar Land Rover.

The region’s employment rate had grown by about half the average for city regions in the UK. If the West Midlands had kept pace with the average, an additional 114,000 people would now have a job.

D’Arcy added: “For years the West Midlands has been ignored as previous governments have focused on making London the financial capital of the world and Manchester a ‘northern powerhouse’. It’s high time Birmingham and the Black Country are brought out of the shadows and made the focus of a national renaissance for Britain’s major cities.”

The report found one of the fastest growth areas for employment had been work via agencies, an area that has come under scrutiny recently for its failure to provide a decent living or economic security to workers.

“In contrast to trends across the UK and its cities, managers now make up a smaller proportion of the workforce than they did in 2008 while the share of professionals has remained flat against rapid increases elsewhere,” Resolution said.

The researchers also found that employment problems spread across the region. Solihull was the only local authority to have a higher employment rate than the UK’s city region average. Birmingham was the worst performing part of the West Midlands, followed by Walsall.

The report highlighted three groups experiencing particular troubles finding work: young people, BAME workers – black, Asian or minority ethnic – and low-qualified workers. It noted that barely half of all young people aged 16-29 were in work and urged policymakers to prioritise support for those disadvantaged groups with back-to-work programmes and other schemes.

Despite its gloomy findings, the thinktank said there were still grounds for optimism that things could change under the the new mayor, who will have responsibility for transport, adult skills and planning, and will oversee a £1.1bn, 30-year investment fund.

One area where policymakers could make big progress, it said, was encouraging those who graduate from the region’s universities to stay on there. The West Midlands has the highest proportion of students of any city region and retaining them by providing high-skill job opportunities would boost productivity and create spillover benefits for local non-graduates.