Jobless figures rising with the city

May 23 2007 by Bill Gleeson, Liverpool Daily Post

Regeneration may have missed the most deprived areas, saysJane Lloyd

SOMETHING about Liverpool's employment figures just doesn't add up. With the city regenerating at an unprecedented rate, thousands of new jobs have been created.

Yet the latest jobless figures show unemployment in some of the city's most deprived areas are static or getting worse.

An attractive explanation for this anomaly would be the fact that Liverpool is attracting a huge influx of new workers, ready to capitalise on the city's recovery, and these people are taking the jobs, not locals.

While there may be some truth in that contention, it cannot explain the whole picture.

Part of the answer is unquestionably the influx of eastern European labour – mostly into the construction industry. But the main solution to the riddle lies right here on our doorsteps, in the shape of thousands of claimants on incapacity benefits being eased back into the jobs market by a raft of government initiatives. Some suggest that this is at the cost of helping those on Job Seekers’ Allowance to find work, while others question the true legacy of Objective 1 funding.

Whichever way you look at it, something is amiss – and you only have to look at the latest official statistics to realise that.

Last week, it was announced that national unemployment had increased by 13,000 – and that the number of people out of work in the three months to March was 1.7m – the worst figure since autumn. On a local level, Everton still has the highest unemployment and deprivation level in the country, with a further 12 areas in Liverpool in the top 100.

Those claiming Job Seekers’ Allowance in some of the poorest wards in the city aren't finding jobs. Speke, for instance, has increased from 418 to 485 jobless in the last three years (Office of National Statistics). Yet, in the same area, there are more jobs being created through the expansion of the airport as well as the opening of new factories, call centres and hotels.

Liverpool economist Peter Stoney claims there is a simple explanation for the apparent discrepancy.

"The service sector has now become the single biggest employer in Liverpool than anywhere else in the country – but it needs skilled workers and we don't have enough of them," explained the senior Fellow at the management school at the University of Liverpool.

He added: "One of the most salient figures from the Office of National Statistics shows that one in five school leavers don't have any qualifications, and this is feeding back into the labour market."

Professor Tom Cannon agrees, saying that much of Liverpool's development is useless for those who have neither the knowledge nor skills required to make the most of the new opportunities.

"The old idea about the service sector being about cheap labour has long gone. They now require skill and consumer focus, resulting in those who are poorest being bypassed by economic growth," said Prof Cannon, chief executive of Ideopolis International – a research and development company focusing on regeneration and the economy.

"But it goes further than that. Many manual jobs in Liverpool haven't gone to locals because big construction firms employ mobile teams that go all around the country. So jobs that open up here go to outsiders.”

Yet Cllr Flo Clucas, Liverpool City Council’s executive member for economic development and Europe, says that this is not a problem specific to Liverpool.

"It is in fact a challenge for all the major cities in the UK with growing economies, including London," she said. "In Liverpool, there are 24,000 more people in work than a decade ago, and the city has outstripped the national rate of increase in this period and that of many of the other core cities.

“The problem for Liverpool is, of course, that this increase has been from a very low baseline – so low that we qualified for two Objective 1 programmes. The current employment rate of 62% is a major improvement on 52% 10 years ago, and a sign of the major recovery of our economy, which has led to our new Objective 2 status."

According to Cllr Clucas, robust action has been taken to close the gap with the rest of the UK, including working with other Merseyside local authorities to get City Pathfinder status.

"We are one of 15 areas nationally which will now pilot a new approach, focusing on the wards with the highest worklessness. It builds on the innovative models of best practice developed by Liverpool City Council and Merseyside Local Authorities, using regeneration funding in programmes to add to the volume of support from Job Centre Plus and other national projects."

Answering the criticism levelled about the lack of skills among the unemployed, Cllr Clucas said that those with little or no qualifications and who, now in their 30s, do not have the necessary skills, experience or even confidence either to find work or improve their prospects, will be assisted.

"There will also be extra help over the next two years through £22m of 'LEGI' funding, which is addressing entrepreneurship in north Liverpool and south Sefton, one of the most deprived areas in the UK. As a consequence, there will be a wide range of support programmes, often on a one-to-one basis to increase enterprise and improve skills and employment rates."

In other words, plenty's being done – but will the means justify the end? Some say that the European funding already thrown at the problem hasn't had the impact it should have had. Will the same mistakes be repeated?

"Objective 1 just hasn't delivered," said Professor Cannon. "It's been spent on creating good jobs for those who would get good jobs anyway, prestige projects and necessities that would have been funded no matter what. One of the few areas where the money has worked is in the expansion of Liverpool airport – and that's due to the public and private sectors working together.

"We need to cut through bureaucracy and red tape. One of the stories that I recently heard but can't validate as yet, is that for every £500 that's been given to small businesses, it's cost £2,500 to administer it. The answer lies in becoming more serious about small business development.

“After all, they're the ones who will employ people from the most deprived areas of Merseyside."

Of course, Objective 1 has helped chip away at social poverty in Merseyside. Since 2000, the programme has funded more than 1,700 projects that will eventually deliver 56,642 new jobs and safeguard a further 25,755 jobs, according to a spokesman for the Objective 1 programme.

"The main reason for Merseyside getting Objective 1 funding from the European Commission was to close the gap between the region and the more prosperous parts of Europe, and this has clearly started happening over the last five years.

"Our intention has always been that as many people as possible should have the opportunity to share in the economic transformation of Merseyside, and we know that the residents of the most disadvantaged parts of Merseyside, the 'pathways communities', have benefited from a large proportion of our investment in training. However, it is still too soon to say how successful that has been.”

The conclusion seems to be that Liverpool has come a long way in the last 20 years. Jobs have been created and citywide unemployment has fallen – and, whilst the same could said for other parts of the UK, the rate of improvement in Liverpool has been faster from a lower starting point. However, there is still more to be done if the momentum is to be sustained, according to Nick Hughes, managing director of South Liverpool Recruitment Ltd.

"Changes in national policy have meant that the reduction in the Job Seekers’ Allowance claimant rate has slowed, and in Liverpool's most deprived neighbourhoods there has been little or no change for some time. In some cases, this can create a perception to some employers that people living in such neighbourhoods don't want to work – this simply isn't the case.

“We must make it easier for the private sector to access support if employers are creating sustainable employment. We must also ensure that there is engagement with schools, not only by looking at raising educational attainment rates, but by ensuring that young people are being prepared and qualified for the employment opportunities that do exist.

“Finally, there must be pro-active engagement with people that want to work but who have multiple barriers to employment. This will mean helping public agencies to work together for the benefit of the people they serve and moving away from the 'silo mentality' that is encouraged by the nature of output-led public funding.

“Liverpool has now started to say that as a city we're better than anyone else. Let's prove this by looking at innovative and cost- effective solutions to the remaining problems we face, not by creating more red tape and pouring more money into broad brush strokes that have small- scale benefits."