Can productivity and growth be increased outside the South East except for Hinkley C?

Our Local Enterprise Partnership’s draft economic strategy is making enormous claims about how much it will increase productivity in Devon and Somerset – its predictions outstripping those of historic precedent and some of the most productive areas of the UK. This in spite of our ageing population and the effects of austerity on skills and training (our LEP’s investment in this sector appears to be limited to training only for Hinkley C nuclear plant).

Our councillors might well examine our LEPs claims with some disquiet:

“… Cities such as Stoke, Blackburn, Mansfield and Doncaster had productivity 25% below the national average, the Centre for Cities said. Raising all parts of the UK to the national productivity average would increase the size of the economy by £203bn – equivalent to Birmingham’s output four times over.

The report showed that cities outside the greater south-east had weaker productivity because they were failing to secure the higher-skilled work of productive sectors and firms.

“Firms choose to locate their high-skilled operations in cities which can offer them access to a high-skilled workforce and other relevant businesses, and will base lower value components in places where land and labour is cheaper,” the thinktank said.

“Barclays bases its high-value banking activities in London and its low-skilled call centre in Sunderland. Similarly, clothing company Asos has a large distribution centre with low-skilled jobs in Barnsley, but its headquarters is located [in London].”

The report said another factor explaining the regional divide was that highly productive sectors and firms made up a larger shares of jobs in cities in the greater south-east than in urban areas in other regions.

On average, cities in the region had a larger proportion of workers in sectors and firms that contributed most to national productivity – in 2015, the information and communications sector made up 7% of jobs in cities in the greater south-east, compared with just 3% in other cities. The financial services industry accounted for 6% of jobs in cities in the region compared with 4% of jobs in cities elsewhere in the country. …”