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Economy of older industrial towns is "essentially stagnant"

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Issued:30/07/18

A new report from Sheffield Hallam University has exposed the ongoing economic problems in Britain’s older industrial towns and casts doubt on claims that the recovery has benefitted all parts of the country.

The report has found that since the depths of the last recession the number of jobs in older industrial towns has increased by just over 200,000 but the rate of job growth has been three times faster in the main regional cities and seven times faster in London.

Britain’s older industrial towns – the places in the North, the Midlands, Scotland and Wales once dominated by industries such as coal, steel, textiles and engineering – are a substantial part of the UK, accounting for around a quarter of the population.

The new report, which draws heavily on official statistics, finds that there is still substantial slack in the labour market in older industrial towns. 

Some of this is reflected in the government’s own unemployment figures but much of it is hidden by diversions within the benefits system. Almost 830,000 adults of working age in the towns are out-of-work on incapacity benefits.

Pay and conditions in older industrial towns are often poor, with 900,000 in-work households on low pay having to claim Tax Credits, at a cost to the Exchequer of £6bn a year.

The report finds that older industrial towns are increasingly becoming dormitories for men and women who work elsewhere.  The net outflow – the balance between commuting in and out of the towns – has risen to almost one million

The report also finds no evidence that the spectacular growth in employment in London in recent years has been of any direct benefit to the labour market outside southern England.

The report was co-authored by Professors Christina Beatty and Steve Fothergill of Sheffield Hallam's Centre for Regional and Economic Research (CRESR).

Professor Fothergill said: “During a national economic upturn it would have been extremely surprising if there had been no job growth at all in Britain’s older industrial towns. But with job growth so much slower than in the cities, and far slower than in London, the evidence is that the economy of Britain’s older industrial towns is essentially stagnant."

Dave Innes of the Joseph Rowntree Foundation, co-funders of the research, said: “It isn’t right that the opportunity to get a decent paying job varies so much across the country. Despite some recent jobs growth, many older industrial towns still have low employment rates, and jobs that on average pay £42 per week less than across the country.

"The government’s promise to create a Shared Prosperity Fund provides an opportunity to reform and revitalise the support provided to places left behind by economic change.”

ENDS

For press information: Please contact Andrea Ruttan in the Sheffield Hallam University press office on 0114 225 3244 or email A.Ruttan@shu.ac.uk.  

NOTES TO EDITORS

1. The new report, The Contemporary Labour Market in Britain’s Older Industrial Towns, by Christina Beatty and Steve Fothergill, can be accessed at http://bit.ly/2NNelgw.

2. The research on which the report is based was jointly funded by Sheffield Hallam University’s Higher Education Innovation Fund and the Joseph Rowntree Foundation.