Tameside Strategic Partnership

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Child Poverty Needs Assessment

4. Employment, Skills and Local Economy

The importance of work and the local economy to families living in poverty cannot be underestimated. However, we must remember that effective policies to tackle poverty can not be achieved solely through economic growth and that we must balance entry into employment with good quality sustainable work, family friendly practices and opportunities for skills development. Research has shown that success in reducing worklessness in the last decade did not necessarily lift families out of poverty and that a wider focus than reducing ‘worklessness’ is needed including:

  • Developing parents’ skills and enabling them to get jobs that can be combined with family life
  • Providing truly affordable childcare that meets children’s and parents’ needs
  • Ensuring that benefit levels provide a solid foundation for families seeking to improve their lives
  • Earnings, job quality and sustainability also need to improve

A wider focus is also needed in developing a local economy that mitigates the effects of poverty and provides sustainable and positive economic development. We need to understand how local economic development and poverty is intricately related to the local social and physical networks within neighbourhoods which define life chances and highlight the importance of basing economic development as part of places, people and their communities. A resilience model for successful local economies, which take into account social relations and equalities, has been developed by the Centre for Local Economic Strategies and highlights some of the problems which need to be addressed:

  • Not enough bespoke local strategies which move beyond traditional economic concerns
  • Too many strategies and local economies are not central enough in them
  • Not enough focus on investment and venture capital
  • Social and employment issues not related to local economies
  • Poor connections between economic development and land use planning
  • Poor recognition of the role of the social sector in the local economy
  • Poor fostering of a culture of innovation, creativity and entrepreneurship
  • Not enough "local"
  • Poor accountability in relation to economic planning and strategy
  • Poor thinking as regards growth, development and quality

Finally, a wide range of research suggests that we need to address economic inequalities if we are to improve social and community outcomes and in turn reduce poverty in deprived neighbourhoods. A recent report on economic inequality and polarisation looks at the relationship between economic inequality and social cohesion and recommends actions which can be taken locally:

  • Local Enterprise Partnerships should prioritise ‘good growth’ for their area
  • LEPs should develop sector strategies, prioritising sectors those that lag in productivity and are also large employers
  • Voluntary pay ratios could act as a check on pay inequality
  • Continue to focus on improving incomes for the most disadvantaged in society
  • Local authorities should have greater financial powers to enable them to shape their areas

4.1 What does Tameside’s Economy look like?

A recent economic baseline study has looked at Tameside’s economy as whole, the key issues in the borough and opportunities for development in the future. A summary of the findings are as follows.

Introduction

Tameside is an area which has not yet adjusted to many of the structural shifts in the UK economy. Tameside has a resident population which has achieved lower skills, lower grade employment and consequently lower levels of wages than the average for the UK or Greater Manchester (ONS Annual Population Survey).

Despite the relatively poor labour market outcomes for Tameside residents however, the unemployment rate is not as high as many areas of Greater Manchester (Claimant Count data - NOMIS) but this may demonstrate more about the resilience of residents than the economy as a whole. Employment in Tameside declined during the UK economic expansionary years of 2004 to 2008 (Annual Business Inquiry) and out-commuting from Tameside is relatively high (ONS Annual Population Survey).

Whilst Tameside faces some economic difficulties, from the perspective of location, Tameside has a number of advantages. The proximity and linkages to the growing economy of Manchester and the national and international motorway, rail and air links provide Tameside with a position many other local authorities would envy.

Economic Geography

The economy of Tameside is closely linked into Greater Manchester. Out-commuters are most likely to work in Manchester or Stockport whilst workers in Tameside are most likely to originate from Oldham, Stockport and High Peak (ONS Annual Population Survey).

Within Tameside, unlike other authorities across Greater Manchester, there is no single economic focus for the area. This lack of focus may have been detrimental to the economic performance of the area. A central focus can lead to more efficient concentrated provision of public and business services, creating in turn, a greater town centre vitality and on towards a clearer spiral of service sector employment generation.

Ashton is the District Assembly Area (DAA) with the highest number of residents and the highest concentration of employment but Stalybridge; Hyde; and Longdendale & Hattersley retain a structure where their contribution of employment and residents to the Borough is balanced. Dukinfield is an area which may be considered more focused on employment whilst the areas of Droylsden; Mossley & Stalybridge North; and Denton & Audenshaw are skewed towards residential (Annual Business Inquiry and ONS Mid Year Population Estimates).

Business and Enterprise

In the recent past, employment has declined across Tameside. This decline has not been uniform and it was most severe in Hyde and Longdendale & Hattersley (Annual Business Inquiry)

The decline has been caused by a structural shift with more than a third of manufacturing jobs lost in the decade 1998-2008. The fastest growth in employment during the same period was in ‘public administration, education and health’ and this activity represents the most important activity for employment in Tameside. In the decade 1998-2008 almost 4,000 jobs are estimated to have moved from the public to the private sector. Of course, ‘public administration, education and health’ is also an area where jobs may be considered to be at risk as a result of planned public sector expenditure cuts.

The sectors recording the highest proportions of employment when compared to the average for England remain skewed towards manufacturing. There are examples of highly regarded value adding manufacturing operations within Tameside such as Scapa Group, The Hyde Group, Stamford Group and Total Petrochemicals but in general, even within manufacturing alone, those sectors considered to be knowledge intensive are under-represented (NW Business Insider top 500 companies and Annual Business Inquiry).

One anomaly which may result in a lack of acknowledgement for the structural economic difficulties that Tameside has faced is that whilst the structure of the Tameside economy is more closely linked to North Manchester, for the purposes of Gross Value Added (GVA) calculations, Tameside is classified in the NUTS3 area of Greater Manchester South. This is the lowest geographic level at which GVA is recorded, the figures are influential in terms of government / European regional policy and yet Tameside is amalgamated with the second most successful NUTS3 area in North West England. Manchester South recorded the 24th fastest GVA growth in the UK in the period 1995-2008 whilst Manchester North was ranked 111th (ONS Regional Accounts).

People and Communities

The fundamental issue for Tameside appears to be the skill levels of the workforce. As the UK becomes more reliant on knowledge driven industries for wealth creation, so the employment outcomes for Tameside residents become more limited. Tameside records the lowest level of NVQ4 equivalent or higher attainment for residents in Greater Manchester and the highest level of residents achieving no recognised qualification. In turn this has led to the lowest levels of employment in professional or management grade employment and the lowest average wages in Greater Manchester (ONS Annual Population Survey).

Workforce skills can take more than a generation to change and is structurally difficult to address with the ability to shift performance linked to attitudes and aspiration as well as the economic pressures to gain work before potential qualifications are achieved.

In fact, whilst employment outcomes may be limited by skills, at present the relatively low skills attainment has not resulted in high levels of unemployment. Unemployment rates in Tameside have been below the averages for England. This does mask some structural issues relating to the total benefit claimant rate and the period of time individuals may be reliant on benefits in some difficult to reach communities (ONS Claimant Count data).

The result of the overall situation is that Tameside is an area where communities are more skewed towards deprivation than affluence. When the indices of multiple deprivation are considered there are very few lower level super output areas (LSOAs) in Tameside positioned within the rankings for least deprived in England as a whole. Conversely high levels of deprivation are found in individual LSOAs across Tameside but particularly in Ashton, Hyde and Longdendale & Hattersley. On average health is the measurement where deprivation is relatively most severe across Tameside (DCLG Indices of Multiple Deprivation).

Sustainable Economic Growth

The Tameside built environment reflects the economic findings as a whole. The area has the largest amount of factory space as a proportion of all commercial buildings of anywhere in Greater Manchester although over the last few years this proportion has declined as warehousing has become more important. Offices make up a relatively small proportion of the commercial built estate (DCLG land use statistics).

Housing in Tameside is relatively inexpensive but this view can mask an important trend. Whilst wages in Tameside are the lowest in Greater Manchester, housing costs are not the least expensive and as a result the affordability ratio for the least expensive part of the housing stock has been worsening faster than elsewhere in Greater Manchester (Land Registry and DCLG Live Tables).

Whilst out-commuting is important in Tameside, and despite the strong linkages of the Borough to the whole of the region, the majority of residents travel less than 10Km to work. The majority of residents also use their cars to make their journeys to work (2001 Census).

Strengths

Weaknesses

  • Proximity to Manchester and linkages to the Manchester economy
  • Transport links and access to Manchester, the North West and the remainder of the UK. Proximity to Manchester airport and international flights
  • The economy of Tameside has proved resilient. Business failure rates are low relative to the average for the region and unemployment has not increased as quickly as in neighbouring areas
  • The proportion of employment in manufacturing is relatively strong on a regional and national basis
  • The Borough can be viewed as affordable with wages and property costs below the regional averages
  • Housing, in particular, is more available and affordable than in other parts of Manchester albeit there is a lack of higher priced housing
  • The fundamental weakness is the poor skill levels of the resident population. The working population has significantly lower skills than the national average
  • Poor skill levels have led to labour market outcomes in lower graded occupations
  • As a result the average wages of Tameside residents are the lowest in Greater Manchester
  • The economy is also relatively small compared to the number of residents with a reasonably high proportion of out-commuters
  • The economy is reasonably reliant on the public sector for employment and knowledge intensive sectors are under-represented within the economy
  • There is a view that the aspirations of the resident population are on average relatively low. Educational attainment, whilst rising, remains just below the average for England
  • There is also a view that the built environment is poor
  • The housing offer is limited at the higher price range and there are few communities recorded as being amongst the least deprived in England

Opportunities

Threats

  • The population of Tameside is ageing less quickly than the average for England and as result economic activity rates are likely to increase relative to the national average
  • The remaining manufacturing base is likely to have maintained core skills often lacking across many areas of the UK
  • Further economic growth in Manchester can provide opportunities for residents and businesses in Tameside
  • Cost competitiveness can attract opportunities with company location decisions
  • The growth in energy related engineering requirements matches some of the sector strengths in the Borough. Any moves to rebalance the UK economy towards manufacturing may also lead to opportunities
  • Improvements in the educational attainment levels in Tameside can improve employment market outcomes for residents although education attainment remains low in many areas
  • Ashton is a centre for the area with a concentration of residents, businesses and local amenities
  • A number of high quality employers remain in the area
  • There is a risk that manufacturing employment continues to decline
  • Employment losses in manufacturing and across the public sector could further reduce job opportunities in the Borough and increase both unemployment and out-commuting reducing the vitality of the town and district centres
  • As the economy becomes increasingly reliant on knowledge intensive industries, the employment outcomes for Tameside residents become less favourable
  • The built environment negatively impacts on the attractiveness of the area to potential employers and residents
  • A lack of quality employment space prevents the expansion of companies, forces some to relocate and hinders the attraction of further investment
  • Deprived and difficult to reach communities increase in number whilst Council budgets shrink. The cost of intervention prevents any funds to improve the economic activity of the area creating an unbreakable cycle
  • The lack of an agreed focal point for the area dilutes interventions and no single location achieves the standards expected for thriving commercial centres

4.2 Unemployment and Work

Getting people into work is an important step towards reducing levels of poverty though a focus on the type of employment and quality of employment is needed to provide a sustainable route out of poverty. Job security, low pay and lack of progression need to be addressed along with personal and structural barriers such as health and childcare. Since 2008, the number of people making a new claim for JSA who were claiming 6 months previously has increased by 60% highlighting the problem of the "low pay – no pay cycle&qout;.

In November 2010, there were 22, 880 people claiming out of work benefits in Tameside (16.4%). There were 5,530 (4%) claiming Job Seekers Allowance but this made up only 21% of those claiming out of work benefits. 13,660 people were claiming Incapacity Benefit or Employment Support allowance (51%), 10% claiming out of work benefits were lone parents though 67% of households claiming HBCTB (in poverty) are lone parent households (half of these have some waged income):

Pie chart showing breakdown of key out of work benifits

Pie chart showing percentage of households claiming Housing Benefit and Council Tax Benefit where there is a lone parent

The number of people who are “workless” in Tameside due to ill health or a disability makes up by far the largest proportion of people out of work. The vast majority of these people have a claim duration which is in excess of 5 years. A breakdown of this claim type and the reason for the claim can be seen in the graphs below:

Pie chart showing Incapacity Benefit and Severe Disablement Allowance reason for claim

Pie chart showing Incapacity Benefit and Severe Disablement Allowance duration of claim

Once in work, developing parents skills is an important feature of sustainable and good quality work which enables families to maximize their income and progress in the labour market. The pressing need to improve access to training across the labour market can been seen by looking at the differing levels of access by occupation. The proportion of working age adults receiving job-related employment is around 15% for those in unskilled and elementary occupations but is around 40% for those in professional occupations:

Graph showing proportion of working-age adults in employment who recieved job-related training in the last three months

Summary of Key Messages

  • Getting people into work is important for alleviating poverty but Job security, low pay and lack of progression need to be addressed along with personal and structural barriers such as health and childcare.
  • 22, 880 people Tameside are claiming out of work benefits (16.4%), 5,530 of these are claiming Job Seekers Allowance
  • The majority of people claiming out of work benefits are claiming Incapacity Benefit or Employment Support allowance - 13,660 individuals
  • The majority of people who are out of work due to ill health or a disability have been claiming for over 5 years
  • 10% of people claiming out of work benefits are lone parents but 67% of households claiming housing/ council tax benefit are lone parent households
  • The proportion of working age adults receiving job-related employment is around 15% for those in unskilled and elementary occupations but is around 40% for those in professional occupations

4.3 Part-time work and Costs of Childcare in Tameside

The availability of affordable childcare and good quality part time work is essential for parents to be able to balance a prosperous work life with a prosperous family life. However, all too often part-time work is not rewarded . Around 15% of full-time male workers earn less than £8 per hour compared to around 50% of part-time workers. For female workers around 20% earn less than £8 per hour compared to around 50% of part-time workers. In Tameside, the median pay for full-time workers in 2010 was £10.74 compared to £7.49 for part-time workers.

Graph showing employees in Tameside by earnings per hour

It is widely held that good quality childcare gives children a great start in life, both educationally and socially. Findings published by the Institute of Education show that children’s achievements in language, reading and numeracy increased in proportion to the number of months they spent in pre-school. At age five, children who had attended pre-school were between four and six months ahead of those who did not attend pre-school. The recent reviews by Graham Allen and Frank Field indicate clear advantages for disadvantaged children in particular who benefit significantly from good-quality pre-school experiences enabling them to be better able to succeed at school. Early and regular participation in childcare is therefore considered an effective means of tackling child poverty. It is therefore important that childcare provision is as affordable and accessible as possible.

Since 2002 Tameside has conducted a comprehensive annual survey to research demand for childcare by parents of children aged 0 – 16 years. This survey has informed findings of the 2011 Childcare Sufficiency Assessment which is a detailed study of the childcare market in Tameside and is carried out every 3 years. The latest Parental Survey was conducted in September 2009 and included questions about factors influencing choice of childcare. Although the cost of childcare was not cited as the main influencing factor, quality of provision and location being ranked higher, respondents with pre-school aged children were inclined to agree that childcare costs are an issue for them. Those parents who used day nurseries were also more inclined to agree that childcare costs were an issue for them compared to those using other types of childcare. The Parental Survey data also shows a higher proportion of parents with an annual household income of £20k+ who agreed that cost was an issue for them compared with a smaller proportion of lower income households. This is not uncommon and relates to parents with higher incomes being less likely to be able to receive financial support towards the cost of childcare.

For parents who work, and for those who wish to take up training or study, affordable childcare can be crucial. However, out of hours care can often be charged at a higher rate and would impact on those requiring early morning, evening and weekend care or those working shift patterns. In addition, weekly fees are not the only costs as there may be registration fees and retainer fees although many settings do offer reductions for siblings and full time care. It is important that work with childcare providers is carried out to consider how their charging policy can be made as flexible as possible to accommodate a range of incomes and that parents are made aware of, and are encouraged to take up the help with childcare costs that they are entitled to.

Parents of disabled children say that they find childcare particularly difficult to afford. There are various reasons for this which may be due to individual families’ circumstances but could also include providers passing on additional costs as they may have taken on extra members of staff or need to buy specialist equipment. These costs should not be passed on to the family but equally cannot be met by the provider in all instances. It is important therefore, that families of children with disabilities are made aware of any specific help with costs that they are entitled to and that providers are supported to become truly inclusive.

The cost of childcare in Tameside across all sectors has risen since 2008. The cost of a full time weekly place has increased considerably so families can now expect to pay over £130.00 per week for full daycare for a child under the age of 5 years. The average daily and weekly rates for day nurseries are currently £33.11 and £148.14 (£5,629 per year) respectively. The weekly rate for a childminder is £127.66 (£4851 per year). In comparison, the Daycare Trust Childcare Costs Survey 2011 found that the average weekly expenditure for 25 hours nursery care per week for a child under two stands at £132.31 (£5,028 per year) for parents in England. The average weekly cost of 25 hours care from a childminder for a child under two stands at £122.89 (£4,670 per year) in England. The figures illustrate that Tameside childcare costs are slightly above the England average.

Summary of Key Messages

  • Affordable childcare and good quality part time work is essential for parents to be able to balance a prosperous work life with a prosperous family life
  • In Tameside, the median pay for full-time workers in 2010 was £10.74 compared to £7.49 for part-time workers
  • Affordable childcare is essential for a number of parents to be able to participate in sustainable work
  • Early and regular participation in childcare is considered an effective means of tackling child poverty. Childcare needs to be good quality and affordable
  • The cost of a full time weekly place has increased considerably so families can now expect to pay over £130.00 per week for full daycare for a child under the age of 5
  • The weekly rate for a childminder is in Tameside £127.66 (£4851 per year)
 
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