Call for investment in Yorkshire cities and skills as think tank warns over scale of Britain's job crisis

Warnings have been issued over Britain’s jobs crisis as analysis suggests almost 10m new jobs may be needed to reverse the damage caused by the coronavirus crisis.

Dan Jarvis, Mayor of the Sheffield City Region, said economic performance in places like South Yorkshire must be boosted to help build back better.

Seven new private sector jobs were needed to create one viable job in the wake of the last financial crisis, according to a report from Centre for Cities and HSBC.

Now, the report concludes, if the recovery follows previous patterns, some 9.4m new private sector jobs will be needed to get 1.3m people back into work.

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Calling for an “economic reset” to address stalled productivity and stagnant pay, the think-tank has urged for investment in adult education to train people for higher paid jobs.

“Addressing these problems will be essential if the Government hopes to attract higher-skilled businesses in emerging industries to cities and large towns in the North and Midlands and meet its levelling up objectives,” said Andrew Carter, Centre for Cities’ chief executive.

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Experts believe the vast majority of new jobs to be created in recovery will be in bigger cities, as seen in the wake of the financial crisis a decade ago.

Some smaller towns did built back stronger, the report acknowledged, with Barnsley highlighted as among those to have fared well with jobs growth. But, underlining the role it thinks big cities will have, it cites findings that London saw one in four of all new private sector jobs - the equivalent of 17 Scarboroughs.

With expectations that the majority of new roles will be in lower skilled jobs, it calls for investment to address a “productivity problem”, alongside a £5bn fund to make struggling city centres more attractive places for high-skilled businesses to locate.

Other proposals include reforming business rates, and devolving more economic powers and resources to local government and in particular England’s metro mayors.

“The employment challenge ahead for the country’s economy cannot be underestimated,” said Ian Stuart, chief executive of HSBC UK. “Beyond the sheer volume of new jobs required, the UK will need to create high value, export-led employment across all regions, if it is to address the age-old productivity puzzle.”

Stark scale of challenge

Last week, political leaders in South Yorkshire questioned the Government’s commitment to levelling up, issuing a joint statement over perceived funding disparities.

The statement described the distribution of resources around the country as a “hollow facade” that has benefited relatively affluent areas at the expense of more deprived towns and cities.

Now Dan Jarvis, Mayor of the Sheffield City Region, hailing the power of devolution, said there is a need for “extraordinary measures” to address the recovery challenge.

He is today with leaders set to agree an £860m stimulus package for the region, with pledges over skills growth and jobs creation and to attract investment.

“Following the massive disruption of Covid, the scale of the challenge to build back our economies and communities is stark,” he said.

“But as this report rightly highlights, if we want to build back better, we especially need to boost economic performance in places like South Yorkshire – for the benefit of the whole country.

“Communities and businesses across the North of England have been disproportionately hit by the pandemic and have historically faced a much harder recovery from recession.”

Government response

A Government spokesperson said: “Our multi-billion pound Plan for Jobs aims to protect, support and create jobs across the country and offers targeted support to help jobseekers of all ages back into employment – including help to switch sectors and build new skills.

“We are also doubling the number of Work Coaches as part of our plan to build back better, meaning that everyone who needs it will be able to get tailored one-to-one support.”

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