enhancing productivity · regions in the uk such as manchester, liverpool, cardiff and west...

ENHANCING PRODUCTIVITY

GLASGOW CITY REGION I 3


2 I GLASGOW CITY REGION

From the waterfront in Greenock to the farmlands of Lanarkshire, Glasgow City Region is the largest metropolitan area in Scotland. Whilst there is still much to do, the Region is beginning to blossom as it transforms from its industrial past. In doing so, it is benefitting from taking a regional approach to addressing its challenges and taking advantage of economic opportunities.

Glasgow City Region is:

� Key to the success of the Scottish Economy – it provides 34% of the country’s jobs.

� Growing – it is expected to add another 30,000 jobs from 2017 to 2021. The largest growth rates are seen in the ICT, Engineering, Tourism, and Legal industries.

� Providing Quality Jobs – recent analysis by the Office of National Statistics shows that the region has the second highest proportion of ‘residents in quality work’, just behind the West of England Combined Authority.

� Increasingly Competitive – its productivity levels have grown by 30% in the last decade. It is currently projected to have higher productivity levels than other post -industrial regions in the UK such as Manchester, Liverpool, Cardiff and West Yorkshire in the next few years.

� Prosperous – the Region’s residents have the highest weekly income amongst the UK’s Core Cities.

� Educated – it has the 2nd highest rate of residents (16-64) educated to degree level amongst Core City Regions.

Executive Summary


ENHANCING PRODUCTIVITYENHANCING PRODUCTIVITY

Glasgow City Region (GCR), is by far the largest metropolitan region in Scotland and one of the largest regions in the UK. It is Scotland’s economic powerhouse, generating almost one third of Scotland’s GVA (Gross Value Added).

The Region is made up of eight Member Authorities: East Dunbartonshire; East Renfrewshire; Glasgow City; Inverclyde; North Lanarkshire; Renfrewshire; South Lanarkshire and West Dunbartonshire.

The eight City Region Member Authorities have an established history of successful collaboration which has been vital to its economic transformation in recent decades.

While the economy and population have grown substantially over the last decade not everyone has shared this success. A significant number of residents are working in relatively low skilled, low paid jobs and many are living in poverty.

This following pages set out a snap shot of how GCR is performing. Some areas for improvement are identified through a comparative analysis against the regions of the UK’s other Core Cities (1).

The Intelligence Hub has completed a Regional Strategic Assessment (RSA), an individual and collective analysis of the economic performance of the Region and the eight local authority areas that make up the Region. It assesses our performance on a wide range of indicators over time, compared to competing UK City Core Regions.

The associated regions for the Core Cities are:

CITY REGION Birmingham West Midlands

Manchester Greater Manchester

Leeds West Yorkshire

Glasgow Glasgow City Region

Liverpool Liverpool City Region

Cardiff Cardiff Capital Region

Sheffield Sheffield City Region

Bristol West of England

Newcastle North of Tyne Based on findings, a suite of 117 indicators have been developed which cut across the themes of Business, People and Place. In response to some of the key challenges and opportunities identified within the Regional Strategic Assessment, a series of the policies, strategies and action plans will be launched in the near future. These are identified at the end of this briefing.

50% of all spending by the local authorities is kept within GCR

Introduction

92.7%of Commuters to the Glasgow

City Region reside within the Region

Notes: (1) Core Cities; Core Cities is an association of ten large UK cities: Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield.



Developing the Regional ApproachThe Glasgow City Region City Deal is the first and largest City Deal in Scotland and one of the largest in the UK.

The success of the collaboration between the Member Authorities paved the way to establish a more formal Regional partnership which brings together a wide range of other partners including: UK Government, Scottish Government, Scottish Enterprise, Skills Development Scotland, Glasgow Chamber of Commerce

The Regional Economic Partnership is tasked with supporting the growth of the Regional economy and tackling some of the issues noted in the following sections.

The Glasgow City Region City Deal



£2.2 billionper annum (4.4%)

generating a permanent upliftin GVA for the Region

21major infrastructure projects

Work with

19,000unemployed people

Generate an estimated

£3.3 billionprivate sector investment

> 4,500support people back into

sustained employment



Core to Business Economy GCR is at the heart of the Scottish economy. It provides almost 30% of the country’s business base and 34% of its jobs. However, it should be bigger. In 2018, it had the lowest number of companies per 10,000 residents amongst all the Core Cities and was significantly behind the Scottish and UK averages – although none of the Core Cities achieved the UK average (2).

Closing the Productivity Gap Forty years ago, the Core Cities, along with London, were the driving force behind the UK economy. Since then they have all found it difficult to shake off their industrial past and transition into new highly productive industries. In 2017, the average productivity levels within the Core Cities (measured through GVA per hour worked) was 91% of the UK average (3). In 2007, GCR was the poorest performing of the Core Cities in terms of productivity. That has changed. If current growth continues, GCR will have a higher productivity than most post-industrial regions such as Manchester, Liverpool, Cardiff and West Yorkshire (4) by the middle of the decade.

GCR has a broad business base. This helps to protect it from external shocks such as changes to trade agreements. Its rise in productivity is driven in part by specialisms in some of the UK most productive industries such as:

� Financial and insurance

� Food and beverage

In terms of employment, it is largely service-based. The three largest industry sections are focused on ‘personal and local services’ (as opposed to tradeable/exportable services). A challenge for GCR is that that exportable services generally bring higher value to both the wider economy and the individual employee. Whilst it is doing better than most of its Core Cities competitors, in terms of service exports per job, it could be better.

If it is to close the productivity gap with the UK average, it needs to find opportunities to add value locally in some of its existing core sectors. This is driving a wide range of public investment decisions across the Region, such as the City Deal, and will be a core component of the future Regional Economic Strategy.

Economic Structure

BUSINESS BASE

GCR has a strong SME base and its three largest sectors for businesses are:

� Professional, scientific and technical

� Wholesale, retail and vehicle repairs

� Construction

EMPLOYMENT SECTORS

Generally, the GCR economy is largely service based, with the three largest employment sectors personal and local services:

� Human health and social work

� Wholesale, retail and vehicle repairs

� Admin and support service

JOBS

34,000 jobs were added to the City Region economy between 2014 and 2017 (5) – with the largest growth seen in:

� Tourism

� ICT

� Legal

� Engineering

At current job growth rates, GCR could add over 30,000 jobs from 2017 to 2021 (6).

The Office of National Statistics has recently published data which shows that with 75.2%, GCR has second highest proportion of ‘residents in quality work’ just behind the West of England Combined Authority – 76.1% (7).

Business

Notes: (2, 5) NOMIS: Business Register and Employment Survey (October 2017) (3) Office National Statistics: Sub-regional productivity: labour productivity indices by city region (4,6) GCR Intelligence Hub analysis (7) ONS: Job quality indicators in the UK – hours, pay and contracts: 2018



The Core Cities value noted does not include North of Tyne.

Source: Office National Statistics: sub-regional productivity: labour productivity indices by city region

Source: NOMIS: Business Register and Employment Survey: open access 2018

PRODUCTIVITY

£33.7£33.1

£30.1£29.3

21.3%

27.9%

19.4%

29.2%

0%

5%

10%

15%

20%

25%

30%

35%

£20.0

£22.0

£24.0

£26.0

£28.0

£30.0

£32.0

£34.0

£36.0

/Scotland UnitedKingdom CoreCities

GlasgowCityRegion

ProductivityIncreases-GVAperhrWorked

2017 10Year%Change



PeopleGrowth in Population and Income Levels In 2017, GCR had almost 1.83 million residents, one third of the country’s population. Over the preceding 10 years, the population grew by 4%. This was behind the UK average of 8%. Although the 4th largest, it had the second lowest growth rates within the UK’s Core Cities regions (excluding North of Tyne). West Midlands and West of England had the highest growth rates of approximately 10% during the same period.

In 2018, GCR residents, on average (median), earned a weekly income of £462.7. This is the highest amongst the UK’s Core Cities, helped by a 23% rise from 2008-2018. This growth has put GCR above both the UK and Scotland’s median.

Relatively Low Inequality Reducing inequality within and between regions is a complex issue that governments are grappling with. In GCR, despite the relatively high median earnings the challenge is not as acute as elsewhere. At £470, GCR has the 4th lowest level of income inequality within the Core Cities, measured on the basis of weekly income

difference between the 10th and 80th percentile. However, the income difference has risen by 9% over the last 9 years. Whilst this is lower than most Core Cities, and less than the UK average (10.9%), given the negative societal impacts caused by inequality, this is something that will need to be closely monitored.

Addressing High Levels of Deprivation A key reason for the rising inequality in GCR is workers in low skilled, low paid jobs. From 2013-2018, the numbers of employees earning less than the Living Wage has remained steady at 18.4% to 19.8%. Since the Public Sector is one of the largest employers in the Region, Living Wage initiatives by Member Authorities will be important to reducing In Work Poverty.

A further challenge to increasing earnings and improving productivity is the lack of qualifications of some residents. Although GCR has the second highest rate of 16-64 years educated to degree level, it conversely also has the second highest rate of residents with no qualifications (12.5%) across the Core Cities.

Source: NOMIS: Annual Survey of Hours and Earnings 2018


Whilst the productivity of GCR’s labour force is increasing, the GVA per resident is significantly behind the UK and Scottish averages. Addressing this means bringing into the workforce, a large part of society who, for too long, have suffered the impacts of worklessness. GCR has the highest levels of Workless Households across the Core Cities. Whilst this has fallen from 24.8% to 21.2%, there is a need for a significant increase in jobs (over 55,000) for the number to come down to the UK average of 14.5%.

A key challenge in reducing the amount of Workless Households, is addressing the

relatively large numbers of (16 - 64 year old) residents who are economically inactive due to long term sickness. There were 87,000 in 2018. On a positive note, GCR has seen the largest percentage drop across the Core Cities over the ten years from 2008-2018. However, getting this down to the UK average of 22.9%, would require a further 6% point reduction. This highlights how important it is that GCR continues to focus on working with its partners to grow more businesses.


Source: NOMIS: Annual Population Survey 2018

Source: ONS: Households by combined economic activity status (Aug 2018)



South Lanarkshire

North Lanarkshire

Glasgow

EastRenfrewshire

Renfrewshire

Inverclyde

WestDunbartonshire East

DunbartonshireDumbarton

Barrhead

Greenock

Inverkip

Renfrew

PaisleyJohnstone

East Kilbride

NewtonMearns

Bishopbriggs

Milngavie

BearsdenCumbernauld

Coatbridge

Motherwell

Carluke

Lanark

Airdrie

Larkhall

Hamiltonl


Place


Attracting and Retaining Talent For GCR to increase employment and its productivity, it is vital that it can retain existing and attract new talent. Equally, it needs to provide the environment and networks that allow businesses to flourish and draw in national and international investors. GCR has been focused on providing a physical environment which enhances on the amazing architecture, parks and infrastructure that its forefathers delivered. It is providing business spaces that encourage innovation, infrastructure that meets business’s demands and places that families want to live in.

A real draw for the Region is its housing market. In 2017, there were over 837,300 households within GCR (8). The Region’s housing offer has many strengths including a wide range and choice of locations and good access to green spaces and countryside.

Overall, the Region’s housing offer is relatively affordable compared with other city regions.

From 2007 to 2017, affordability (9) – when measured based on median house prices versus gross disposable household incomes – improved across the Region. It dropped from a ratio of 8.8 to 8, in line with the Scottish average. This makes it the most affordable in terms of home buying across the Core Cities. It is one of the reasons that there is expected to be a 10% growth in households to 2035.

A key focus of the Region is shifting the modal share of adults travelling to work by all forms of public transport or active travel as this remained fairly static at between 30-32% from 2007 to 2016.

Creating Places that Everyone is Proud to Live In Analysis by Clydeplan on the Scottish Indices of Multiple Deprivation 2016 shows that the Region accounts for 59% of the most deprived data zones in Scotland. These are communities which have been the focal point for housing investment across the region over the last ten years.

Notes: (8) National Records for Scotland (NRS) (9) http://housingevidence.ac.uk/wp-content/uploads/2018/09/R2018_02_01_How_to_measure_affordability.pdf

Glasgow A�ordable HousingProgramme 2018-2019 and15% SIMD Areas

0 2.5 51.25 mi

0 4 82 km

Reproduced by permission of Ordnance Survey on behalf of HMSO. © Crown Copyright and database right 2012. All rights reserved. OS Licence No 100023379.You are not permitted to copy, sub-license, distribute or sell any of this data to third parties in any form.Web AppBuilder for ArcGIS

Scottish Index of Multiple Deprivation(SIMD) 2016 Most Deprived 15%

>50-186

>25-50

1-25

SOUTH LANARKSHIREEAST RENFREWSHIRE

RENFREWSHIRE

EAST DUNBARTONSHIRE

NORTH LANARKSHIRE

GLASGOW

http://housingevidence.ac.uk/wp-content/uploads/2018/09/R2018_02_01_How_to_measure_affordability.pdf

http://housingevidence.ac.uk/wp-content/uploads/2018/09/R2018_02_01_How_to_measure_affordability.pdf



See the investment map for Glasgow on page 10.This investment has been carefully designed to maximise impacts. In tandem, delivery partners accompany the investment with provision of employment opportunities and a wide range of training programmes for local residents.

A recent longitudal study by GoWell on the impacts of housing investment with GCR found that:

“Although the renewal investment was based on housing considerations, it also followed a pattern of allocation to needs related to health and area-level deprivation. Furthermore, the ‘higher need’ group of areas experienced relatively favourable mental and physical health outcomes after receiving higher levels of investment compared to areas of lower need.”

The amount of vacant and derelict land (VDL) within GCR, a legacy of its industrial past, is a

long-term challenge for the Region. Whilst there has been a 22% reduction in the amount of VDL in GCR over the past five years, the Region still has over 30% of Scotland’s total.

The particular challenge faced by the Region is the proximity of this land to residents. In 2018, almost half of local residents were within walking distance (500 metres) of a VDL site. This is much higher than the Scottish average of 29.1%. Residents within the top 15% SIMD areas are most acutely impacted. As shown in the map below. Almost 30% of the sites are within top 15% SIMD areas. Of all the VDL sites across the country within top 15% SIMD sites, almost two thirds are within GCR.

GCR is looking to find new ways of bring these wasted assets back into productive uses that enhance the socio-economic prosperity of local communities. A Regional Vacant and Derelict Land Strategy is currently under development. It will focus on partner action to tackle this long standing issue.

Vacant and Derelict Land/Buildings with 15% SIMD Areas

0 2.5 51.25 mi

0 4 82 km


Vacant and Derelict Land/Buildings

Scottish Index of Multiple Deprivation(SIMD) 2016 Most Deprived 15%

SOUTH LANARKSHIREEAST RENFREWSHIRE

RENFREWSHIRE

EAST DUNBARTONSHIRE

NORTH LANARKSHIRE

GLASGOW



Creating Places that Unlock Innovation GCR has the benefit of three leading universities operating across the Region. As a consequence, Glasgow has the UK’s biggest academic community outside of London.

Strathclyde has just been voted the University of the Year by the Times newspaper. It opened the first Innovation District within Scotland – now home to 18 major research centres and innovation organisations along with more than 30 innovation companies and SMEs.

The University of Glasgow has recently created the Glasgow University Innovation District which includes zones for biomedical and interdisciplinary innovation. It focuses on a diverse range of areas including Precision Medicine which is revolutionising how we view healthcare, quantum technology, nanofabrication and photonics.

Glasgow Caledonian University (GCU) has pioneered the integration of social innovation as a pivotal element of its ‘common good’ mission. GCU has established an incubation unit, Uhatch, specialised in supporting social enterprises and value-led SMEs, helping them to demonstrate the positive societal impact they have within the region and beyond.

The Region has the people, business and institutional ingredients to enhance its productivity by turning itself into a world leading centre for Innovation.

This is one of the reasons why CGR is investing so significantly, through the City Deal programme, in its innovation districts, often in vacant and derelict land.

RUTHERGLEN

RENFREW

CLYDEBANKERSKINE

BEARSDEN

PAISLEY

BARRHEAD

Glasgow AirportInvestment Zone

Glasgow Airport Access CLYDE RIVERSIDEINNOVATION DISTRICT GLASGOW CITY INNOVATION

DISTRICT

Clyde Waterfront and Renfrew Riverside

SEC Expansion

Pacific Quay

Buchanan Wharf

Custom House QuayCentral Quay

Lancefield Quay

GLASGOWADVANCED MANUFACTURING

INNOVATION DISTRICT SCOTLAND (AMIDS)

Development Areas

0 2.5 51.25 mi

0 4 82 km


Innovation Districts

City Deal Projects

New Developments



Upcoming Developments and ResearchTo drive the necessary physical and social transformation, we need to deliver a step change in the economy which will help to further unlock potential and drive improvement to productivity.

To support this ambition, a series of work is being progressed by the Regional Economic Partnership which is anticipated to be completed within the coming months.

FEBRUARY/MARCH 2020

The Independent Commission on Economic Growth will present the Futures Report, a body of research which will complement the RSA and set out the Region’s future challenges and opportunities. It will report on a number of distinct areas including the growth drivers of city region economies, innovation systems and issues we will face in the coming years in relation to skills, the labour market, housing and infrastructure.

SPRING 2020

The Glasgow City Region Investment Prospectus.

JUNE 2020

A refreshed Glasgow City Region Economic Strategy (RES), co-produced with the Scottish Government, and informed by the findings from the extensive Regional Strategic Assessment. The RES will set out a series of clear actions to be delivered by the Regional Economic Partnership, designed to support Glasgow City Region to deliver on its economic potential for the benefit of all our residents and for Scotland.


This report was produced by the Glasgow City Region Intelligence Hub. The Intelligence Hub provides a range of intelligence related services, such as research, analysis, evaluation and reporting for the City Region and the City Deal on a range of economic issues - including demographics, land use, sustainability, inward investment, economic growth, tourism, transport, enterprise, skills, employment and housing.

The work delivered by the Hub provides the evidence base for future policy and investment decisions across the region.

www.glasgowcityregion.co.uk/IntelligenceHub

The Glasgow City Region Intelligence Hub



http://www.glasgowcityregion.co.uk/IntelligenceHub

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