Learning Journal 2 -
From collecting our individual research and discussing our findings it is clear that each area of the English economy (infrastructure, health, education, employment & the environment) features a 'London bias’. It goes without saying that London has the largest economy of all the regions but the extent to which London needs attention from the exchequer and if the economy needs rebalancing is matter of debate.
Tomas: Infrastructure
In terms of investment and rail & road usage, London sticks out as an economy in a league of it's own. Not only does it consistently attract by far the most investment per head year by year but has the largest private sector to match. The three northern most regions (NE, NW, YH) have both the lowest per head investment and smallest private sectors. From research done by Sheffield Political Economy Research Institute on the strong correlation between a relatively large private sector and investment of public money, we can call into question the government’s mantra that public investment ‘crowds out’ business. In terms of supporting domestic trade, roads are far more instrumental than rail or water ways, accounting for three times as many goods transported as the later two. Interestingly, the regions with the lowest investment and smallest economies show the least promise of return on the public investment, which is a serious hurdle for re-balancing the UK’s economy.
Simon: Economy
According to a study by Spatial economics, offshoring to countries with cheaper labour is most often done with routine jobs, but due to advancing technologies, this is now being done to almost all types of routine jobs. This decrease in routine labour is then not offset by a matching rise in non-routine jobs, leading to fewer job opportunities, especially in areas where routine jobs are a large proportion of total jobs. The map above shows which areas this applies to.
Jobs also being lost to the south, however. ONS data shows how ‘the economy’ began to recover in the north after the recession, but this happened 3 years later than in the south. The ONS said: “Northern England regions collectively have grown below the UK average in both the 2009-2014 period (growing at 2.2%) and the 2013-2014 period (growing at 2.7%). This is in stark contrast to the southern regions, which collectively have grown by 7.5% during the 2009-2014 period and 3.5% during the 2013-2014 period.”The ONS figures show employment growth in the UK as a whole was 4.8% a year on average from 2009-14, and 3.1% between 2013 and 2014Even discounting London, the south still grew much more than the north. ONS point to ‘manufacturing’ as a possible cause, as lack of demand sees the 2nd most common job sector in the north somewhat faltering. Manufacturing is only 7th most common job in the south, with finance taking charge, and tory government have made the financial sector extremely lucrative these days.In 2013-24, London +17%, Brighton +11%, Bournemouth +9%, Aberdeen +7%, Blackpool -10%, Rochdale -8%, Newport -9%.In terms of Private Sector Jobs, growth in the south was 12%, elsewhere it was -1%. Only the huge public sector offered employment opportunities elsewhere.In 2015, FT said GVA was probs the best way to determine ‘economic dynamism’ in the country.
Showing growth by region compared to UK-wide growth.But economic growth in London has not resulted in reduced poverty or inequality. On the contrary, poverty rates for various groups, including children, have seen much less improvement in London compared to the Northern regions; house price affordability and private rental costs have increased substantially in London but not in the North; homelessness has worsened in London but improved in the North; and overcrowding remains particularly acute in the capital.The paper, Pulling in the Same Direction? Economic and Social Outcomes in London and the North of England Since the Recession, by Polina Obolenskaya, Ruth Lupton and Bert Provan, concludes: “The findings suggest not only a need for regional rebalancing of both the economic and social kind, but that economic growth per se cannot be relied upon to improve social outcomes in any region – and in particular it cannot be relied upon to reduce poverty and inequality”.It recommends closer monitoring of regional disparities and levels of inequality within regions, and a clearer understandings of how growth strategies and public service reform can generate “inclusive growth” in different local places.Offshoring to cheaper countries has resulted in fewer job prospects in manufacturing-based economies found prominently in the north east and north west of England. Additionally, huge job growth in London has led to a ‘brain drain’ with workers moving south to follow the opportunities. Northern cities suffer from this, and this as well as lack of private sector investment has led to huge differences in growth between northern and southern cities, with GVA per head 3 times higher in London than in northern cities. In Northern cities, private sector jobs fell by 1%, and public sector jobs, making up the vast majority of total jobs in these areas also fell. Crowding out phenomenon seems debunked, and the North just gets less back of both public and private sector investment, discouraging both types of investment in the north.
Kinza: Environment
It seems that the regions in England with higher levels of funding capacity don’t necessarily correlate to consumption and productivity, at least in terms of living standards, due to environmental conditions. A good example of this is agricultural land becoming an increasingly augmented asset due to the lack of it, with agriculture condensing in the very fertile East of England. Through retirement planning and tax breaks (CGT, IHT etc.) farmland has fallen into higher demand nation-wide.
This is reflected by the government encouraging diversity in farms through the Rural Development Programme for England that offered loans and grants especially to tenant farmers who could produce a surplus. The below areas are examples of agricultural surplus in England.
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certain species of goat for mohair or cashmere or angora rabbits for their wool
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sheep and/or goats for their milk and specialist cheese-producing potential
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new world camelids - eg llamas, alpacas, guanacos or vicunas for their pelts or wool
Ciara: Education
Education in the UK shows disproportionate funding per pupil across the UK. Over the last two decades, London has benefited from an increase in funding, with schools in the inner city receiving up to £5,917 per pupil, above the national average in England of £4,306 (IPPE). The inequality is due to regional spending, and the rise of academies, which leave local councils powerless to intervene and build improvement programs within the schools. Using examination results as a marker of excellence, one cannot use deprivation as an indicator, as reports show that London’s disadvantaged achieve better outcomes than pupils in the north. Northern schools are failing because they receive less funding, despite similar intakes of pupils, with pre-determined funds being allocated from the central government. London hosts the top 10 schools for GCSE results in the country, with the lowest 10 performing schools located in areas of the North West, North East and the Midlands.
Giulia: Health
We are going to focus on the differences inside the regions of England regarding healthcare. In general it ha been shown that the northern regions generally do less well than the midlands and London, and the best performing regions are the East of England and southern regions compared to the overall English average.
Some indicators which oppose the general trend are:
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High levels of childhood obesity in London – this contrasts the majority of indicators doing better than England in this region. This finding is backed up by the APHO Profiles.
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High proportion of drug use in the South East – goes against the trend of good health in this region
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High levels of breast cancer incidence in the South West – opposing the picture of good health in this region. (Radon)
In keeping with the other areas of research, the North-East sticks out the most, followed by the the North West which together are over the UK average for public investment.
In the final report we are going to have to ascertain the supply-need dynamic in the regions, how this relates to ‘value for money’ for the taxpayer and how this will change when the new budget is introduced.
One of many issues which Albo brings up is again the idea of markets. Eco-Localists seem to have this idea that firms and big companies will just cooperate with ecological values which is just being blind to the very nature of the market. Companies operate for the maximization of profit and economic growth. Any rational firm would not implement ecological policies if it is infringing on profit margins. And the only way they would do so, is if such costs can be translated via market prices i.e if you want greener services, you're going to have to pay more. Albo further argues that in order for firms to implement such ecological policies, they would need to be pressurized in doing so. For example, if other firms of similar nature from other locals are implementing ecological values then firms may comply but other than that there is not much hope.
