Employment prospects and the current/future economic outlook are two of the key wider socio-determinants of health. Unemployed people are significantly more likely than employed people to have poorer mental and physical health.
What are the big issues?
The UK and Warwickshire’s unemployment rates have decreased significantly in recent years and are now at record lows. The Claimant Count can be used to indicate the level of unemployment in local areas. This figure counts the number of people on Jobseeker’s Allowance (JSA) and also those on the out-of-work element of Universal Credit. However, the Claimant Count does include some out of work claimants in receipt of Universal Credit who are not required to seek employment; for example, due to illness or disability. Under Universal Credit, a broader span of claimants are required to look for work than under Jobseekers Allowance. As Universal Credit Full Service is rolled out in particular areas, the number of people recorded as being on the Claimant Count is therefore likely to rise. In February 2018, there were 5,095 people in Warwickshire (or 1.5% of the population) claiming Universal Credit. Within the county, Rugby Borough (2.3%) and Nuneaton and Bedworth Borough (2.2%) have the highest proportion of people claiming Universal Credit, with Warwick District (0.8%) the lowest.
Employment and Support Allowance (ESA) is a benefit for people who are unable to work due to illness or disability. There are two ESA categories: the support group, which is for those who are not expected to return work; and the work-related activity (WRA) group, which is for those with less severe conditions, who may be able to return to work. Within Warwickshire, 2,280 of the 14,610 claimants were in the WRA group. From April 2017, new group claimants will receive £30 less a week than the current rate. Whilst the Chancellor suggests this will provide an incentive for claimants to return to work quicker, the Disability Benefits Consortium (DBC) argue the cuts could potentially lead to hardship for those claimants, and may actually have a detrimental effect on claimants’ health, delaying their return to work.
Over the last ten years, Rugby Borough has seen the largest decrease in JSA claimants, with 87% fewer claimants in 2017 when compared to 2007. In contrast, Nuneaton & Bedworth Borough has seen the smallest reduction in JSA claimants during this period, reducing by 54%. Across all of the districts and boroughs, JSA figures peaked in 2009 as a result of the recession. Across the county, these figures reduced year on year and by 2013 had returned to the levels witnessed pre-recession. Nuneaton & Bedworth Borough also has the highest ESA claimant rate (3.3%) in the county; whereas Stratford-on-Avon District has the lowest rate (1.7%).
Comparing the below datasets which looks at the proportion of unemployed residents across the county (in addition to the West Midlands and England), there are large variations across the county in terms of income and employment. Nuneaton & Bedworth Borough consistently scores lower when compared to the other districts and boroughs in Warwickshire, but has improved significantly in recent years. Long-term unemployment looks at the proportion of residents claiming JSA for 12 months or more, whilst youth unemployment looks at the proportion of 16-24 years olds claiming JSA. Across all of the areas included, unemployment peaked in 2010 as a result of the recession, however long-term unemployment peaked in the 2012-2014, highlighting that the ramifications of the recession were still being felt in later years. When looking solely at JSA claimant rates, Nuneaton & Bedworth Borough consistently has the highest levels of unemployment in the county, although since 2016 this rate has been lower than the England average.
Figures indicate that the median full-time worker in Warwickshire earns £2,490 and £230 a year more than the West Midlands and England averages, respectively. There is clear disparity in median workplace based earning across the county, with median annual earnings in Stratford-on-Avon District £8,043 greater than in Nuneaton & Bedworth Borough. Indeed, both North Warwickshire Borough and Nuneaton & Bedworth Borough have median workplace based earnings lower than the equivalent figures for both the West Midlands and England.
The outlook for Warwickshire appears positive, with wages higher than the equivalent regional and national figures and unemployment low. However, as the local working-age population shrinks and the over-65 population expands faster than average, Warwickshire’s businesses will find it increasingly difficult to find the local workers. This phenomenon appears to already be an issue for Coventry & Warwickshire’s businesses (explain in Warwickshire County Council’s Skills Report, 2017). As skills shortages persist, we would expect to see wages increase. Indeed, annual median resident and workplace wages have increased at an above-average rate in the county.
Higher wages have not been enough to offset the increase in median house prices in the county. The high standard of living in Warwickshire is significantly increasing the demand for property. As a result, house price affordability – a measure of buying power of residents – has worsened at a faster than average rate in the last year and since 2009. This is particularly visible for lower quartile earners, who now need 7.5 times their annual wage to afford a house, up 5.2% in the last year (compared to 0.7% nationwide).
GVA (Gross Value Added) is total economic output produced in the economy. A rise in GVA is equivalent to positive economic growth, and Warwickshire’s GVA has increased 4.9% over the last year. This is faster than the national average (3.6%) and has been driven by above-average economic growth in Warwick District (6.3%), North Warwickshire Borough (5.8%), Rugby Borough (4.1%) and Nuneaton & Bedworth Borough (3.9%).
Productivity, expressed as GVA per job filled, is a measure of long-term economic prosperity. It is widely accepted that areas displaying faster productivity growth, grow faster in the long-run. Since the 2009 recession, Warwickshire’s productivity has outgrown every local authority in the England, growing 30.4%. Over the same period, the average local authority grew 16.5%, almost half the county rate. Also, this is 5 times faster than the same period of time before the recession (2004-2009), where Warwickshire grew just 6%.
With such exceptional growth, Warwickshire’s productivity gap with the UK has reversed from its widest point in 2009 of -13.1% to +1.5% in 2016. Each worker in the county now produces, on average, £53,447 worth of goods/services a year, £821 more than the national average.
There was a 5.8% rise in employment growth in Warwickshire between 2009-17, a rate that is fairly consistent with regional and national averages. Automotive Manufacturing and Energy were the two strongest sectors with employment GVA growing by 144% and 172% respectively between 2009 and 2016. The automotive sector is clearly a driver of productivity and employment growth in the county (this sector is valued at £1,408 million) but this raises concerns that Warwickshire is over-reliant on the automotive sector for employment, productivity and growth.
Finally, despite the long-run success of Warwickshire’s economy, there has been a slowing down in terms of business start-up rates (business births were down -0.7% between 2015 and 2016) and a 14.6% increase in business deaths (a business that is no longer present one year on).
The Coventry and Warwickshire Local Enterprise Partnership (CWLEP) promotes the area as a good place to do business by creating the right conditions and infrastructure for investment. In September 2014, CWLEP signed a Growth Deal with Government potentially worth over £100m to the local economy. This will help improve public transport, provide office space for SMEs (Small and medium size enterprises) and launch start-up initiatives across the region, all of which should increase job opportunities and employment rates. This positive economic activity along with the trends highlighted, suggest that the outlook for Warwickshire’s workforce and economy is strong. However, this has to be set against the backdrop of the Government’s unprecedented welfare reform programme, uneven economic recovery and uncertain growth in Europe; the impacts of which are still to emerge fully.
What do we need to do?
We must ensure everyone benefits from the successes of Warwickshire’s economy. Inclusive growth must be a key priority for those who wish to sustain our recent success. This should involve promoting the development and recent successes of the boroughs in the North of the county.
Helping local people to be productive either in paid or unpaid work to support their transfer towards future employment will have a beneficial effect on demand for health services in the future.
Local partners operating through the Local Enterprise Partnership (LEP) will need to help create the conditions for economic growth and effectively address the weaknesses, risks and inequalities across Warwickshire and the sub-region.
Who needs to know?
The Coventry & Warwickshire Local Economic Assessment also contains a wealth of relevant economic analysis.