Agenda item

The Chair will present the report of the Task Group review of Economic Development at Local Level.  The Commission is recommended to receive the report and comment as appropriate.

The Chair presented the report of the Task Group review of Economic Development at Local Level, drawing attention to the following points:

·           The Task Group had consulted with various external organisations, details of which were included in the final report;

·           It has not been possible to visit Preston, to discuss the Preston Model, as intended, due to the Covid-19 pandemic;

·           Some of the Task Group’s recommendations were very relevant to the economic recovery needed for the city due to the impact of the Covid-19 pandemic; and

·           Details of the recommendations made, along with information on the reasons for these, were set out in the report.

Councillor Myers (Assistant City Mayor – Policy Delivery and Communications) expressed his support for the report, welcoming the rich and informative data it contained.  He expressed the hope that the recommendations made could be adopted and implemented over the term of the Council.

Councillor Myers noted that the development of a model similar to that used in Preston in co-operation with key anchor institutions across the city was recommended.  This was welcomed as, being the largest employers in the city, they had a significant influence, both on people’s lives and the city as a whole.  In this way, it would help drive the city’s post-Covid-19 recovery and inform other future business models.

At the invitation of the Chair, Jonathan Payne, Professor of Work, Employment and Skills at De Montfort University, addressed the meeting, making the following points:

o    Leicester was the 32nd most deprived local authority area in England.  The issues raised by this were likely to be exacerbated by the current Covid-19 pandemic;

o    It was widely thought that the country would be entering a very deep recession following the Covid-19 pandemic, as a result of which unemployment levels could increase significantly by next year and take ten years to recover;

o    Approximately 70% of the city’s workforce were employed in the hospitality, tourism and retail sectors, but these sectors were expected to be facing a moderate or severe impact from the anticipated recession;

o    Many young people were in financial difficulty.  They often worked casual hours and lack of work experience could lead to employers feeling that it was risky to employ young people;

o    Recent measures announced by the Chancellor of the Exchequer could go some way to improving the situation, but questions remained, such as whether employers would co-operate and who would monitor training provided.  There also was concern that adult training would be restyled as youth training;

o    Prospects for long-term unemployed people remained limited, due to lack of work experience opportunities;

o    60% of young people not in employment, education or training (NEET) were not actively seeking work.  Many had complex needs, but very few opportunities were available to these groups;

o    Tailored one-to-one coaching was important for both the long-term unemployed and NEET groups.  Leicester already had some good examples of this;

o    Further education colleges had a vital role in economic development, but the local employment market made skills planning very difficult.  The emphasis on careers advisors by the government was welcome, but relevant skills were needed as well;

o    The East Midlands currently had little infrastructure for intelligence gathering on these matters;

o    Skills were not the only solution to economic development.  However, demand for workers was low, with too few jobs on offer and this situation could get worse if employers had to reduce their work force.  This could result in high unemployment and low skill levels locally;

o    One concern was that considering inclusive growth to mean getting people in to any work ignored the need for job quality;

o    Local government could not resolve this situation by itself, but needed to work co-operatively with other key stakeholders; and

o    Inclusive growth needed to be more than a slogan.  People living with unemployment and low wages needed to be given a voice.

On behalf of the Commission, the Chair thanked Professor Payne for outlining challenges and opportunities for economic development at local level.

The Director of Tourism, Culture and Inward Investment agreed with challenges identified and stressed the need for all partners to work together to address these.  In particular, people needed to be given a voice and effective collaborative responses developed.  The Director noted that the details of the provisions set out by the Chancellor of the Exchequer were not known yet, but the financial challenges set out in the Task Group’s report showed an expectation that locally the anticipated recession would disproportionately affect young people, the low waged and female workers.

The Commission noted that the economic situation of a significant number of people in the city had been concerning before the Covid-19 pandemic started.  For example, apprenticeships appeared to be being used by some employers as a way to pay people very little and the combination of low wages and high property prices had led to a lack of hope for the future.  It therefore was suggested that a large programme of investment was needed to try and avoid local industries being closed down.  The Council needed to be clear about what it would do to support this, but central government also needed to take an active role.

Members also stressed the need to ensure that training provided was relevant to the area being considered, using cultural intelligence to design and develop training that would retain employment in the city.

The need to understand different needs and different reasons for disadvantage also was stressed.  These differing needs meant that the same approach could not be used across all parts of the city to address challenges identified in different neighbourhoods.  This highlighted the need to have partnerships with different stakeholders and institutions, and to press central government to undertake investment in the city.

The Commission also suggested that the recovery from the Covid-19 pandemic was an opportunity to find new solutions with which to move forward and questioned whether any new solutions had been identified. 

One area in which this was needed was how to address the issue of sweatshops in the city.  Concerns about these had been raised under a previous task group review and passed on to central government, but there appeared not to have been any action taken until earlier this year.  In reply, the Chair advised Members that the City Mayor would be answering a question regarding sweatshops in the city under minute number 73, “Questions to the City Mayor”, below.

It was stressed that the foundation of good economic development policy was good, reliable data, so ways needed to be found of obtaining this.

One area in which further discussion could be held was the distribution of money remaining in the city’s allocation from the European Social Fund.  Although this source of funding would be lost when the United Kingdom left the European Union, requests could be made that some of the remaining funding be used to address the issues raised through this report, particularly in relation to economic development for young people.

At the invitation of the Chair, Professor Payne responded to the comments made, stressing the importance of moving away from just focussing on economic growth and consumption.  This needed to be combined with other things, such as jobs. 

He also recognised the concern that, after the Covid-19 pandemic, the situation could be worse than before the pandemic.  For example, in addition to increased unemployment, more people could be put on zero hours contracts, or need to do agency work, or have less satisfying jobs.  It therefore needed to be asked what local government could do to try and make gains if central government did not take action to address these issues.

AGREED:

1)    That the recommendations contained in the Task Group report “Economic Development at Local Level” be endorsed and passed to the Overview Select Committee for consideration and onward transmission to the Executive;

2)    That the Director of Tourism, Culture and Inward Investment be asked to ensure that officers preparing the Council’s post-Covid-19 Economic Recovery Plan take account of the recommendations contained in the Task Group report;

3)    That the Director of Tourism, Culture and Inward Investment be asked to submit a report to this Commission at an appropriate time on how the recommendations in the Task Group report have been reflected in the development of the Council’s post-Covid-19 Economic Recovery Plan;

4)    That the Chair of this Commission be asked to meet representatives of the Leicester and Leicestershire Enterprise Partnership to discuss whether any money from the European Social Fund can be allocated to address issues raised in the Task Group report, particularly in relation to young people; and

5)    That the Commission’s thanks be extended to Professor Jonathan Payne, Professor of Work, Employment and Skills at De Montfort University, for his assistance with the review and at this meeting.