Transcript Add title - Strabane District Council

Strabane: current and future needs
Neil Gibson, Director
Oxford Economics
[email protected]
30th June 2011
Prepared for Strabane District Council
Overview
A new world, recovering but forever
changed
Strabane - challenges ever more acute
A need for change
The policy challenge
2
A new world, recovering but forever changed
A new world
 The world economy is growing again based on a resumption of trade flows
 But the problems of an indebted West remain largely unsolved
 The reality of scare resources is becoming apparent (e.g. food and fuel)
 The exchange rate has helped UK exporters (as has low interest rates)
 The UK had been ‘buying’ jobs through increased debt, either public debt (a growing
civil service) or consumer debt (the retail and housing boom)
 The financial services sector is forever changed (but not dead!)
 Agri, elderly care, niche production, and near to market production are coming back
into vogue
 But the harsh reality is – we cannot afford the economy we are currently running
4
Northern Ireland – end of the boom
Total employment, Northern Ireland, 1998 - 2020
890
2008 peak
not forecast
to return by
2010
Forecast
Employment (000s)
.
870
850
830
810
Loss of
36,600 jobs
from peak
790
770
750
Source: Oxford Economics
5
20
20
20
18
20
16
20
14
20
12
20
10
20
08
20
06
20
04
20
02
20
00
19
98
730
Northern Ireland – the stark truth
 NI has an effective annual ‘deficit’ worse than Greece or Ireland (approx £10bn or 38%
of GVA)
 The relative economic ‘health’ remains about 30% below the UK
 NI has higher levels of welfare and public sector dependence than any other UK region
 The Executive to date has passed very few new economic policies into law or made
substantive changes to the economic trajectory of the region
 But changes are coming:
■ welfare reform;
■ a less ‘supportive’ UK government;
■ end of Selective Financial Assistance (capital grants); and
■ a reduction in Corporation tax?
 Are we ready for this?
6
Strabane - challenges ever more acute
8
Source: Oxford Economics
Strabane experienced relatively
no growth over the decade prerecession
Strabane
Ballymoney
Ards
Limavady
Carrickfergus
Larne
Coleraine
Craigavon
Down
Derry
Newtownabbey
Belfast
North Down
Moyle
NI
Fermanagh
Omagh
Castlereagh
Lisburn
Antrim
Ballymena
Armagh
Magherafelt
Newry and Mourne
Banbridge
Dungannon
Cookstown
Employment Growth (%)
Strabane lagging behind, even in good times
Employment Growth, NI District Councils, 1998-2008
45
40
35
30
25
20
15
10
5
0
Retail, construction and agriculture major employers
Employment by sector, Strabane, 2010
Other
personal
services
3%
Transport &
comms
3%
Financial
services
1%
Extraction
1%
Utilities
0%
Public admin.
4%
Hotels &
restaurants
4%
Distribution &
retail
21%
Business
services
5%
Construction
15%
Manufacturing
8%
Health
10%
9
Education
11%
Source: Oxford Economics
Agriculture
14%
Rural setting, reliance on production sectors
Difference in Employment structure, NI & Strabane, 2010
Business services
Health
Public admin.
Manufacturing
Hotels & restaurants
Other personal services
Transport & communications
Financial services
Utilities
NI more dependent
Strabane more dependent
Extraction
Education
Distribution & retail
Construction
Agriculture
-8
-6
-4
-2
0
2
4
Percentage points (Strabane-NI)
Source: Oxford Economics
10
6
8
10
12
Employment growth was driven by the housing market
Employment growth, Strabane & NI, 1998-08
Agriculture
Extraction
Manufacturing
Utilities
Construction
Distribution & retail
Hotels & restaurants
Transport & communications
Financial services
Business services
Public admin.
Education
Health
Other personal services
Total
Strabane
000s
%
-0.6
-27
0.0
62
-2.3
-69
0.0
-47
1.1
90
0.9
58
0.2
61
0.1
20
0.0
18
0.6
386
-0.2
-26
0.0
-4
0.3
40
0.1
38
0.1
0
Northern Ireland
000s
%
-11.1
-24
0.3
18
-24.1
-21
-1.2
-33
27.6
57
35.3
31
7.3
19
6.8
23
6.6
45
47.9
101
0.5
1
7.6
11
25.1
26
10.9
34
128.9
17
Source: Oxford Economics
Note; red shading indicates worst performing sectors, yellow shading indicates best performing sectors
11
12
Source: ASHE, Oxford Economics
Strabane suffers from low
wage levels
Strabane
Moyle
Limavady
Antrim
Craigavon
Ards
Ballymena
Cookstown
Newry and Mourne
Dungannon
Derry
Magherafelt
Down
Fermanagh
Coleraine
Ballymoney
Banbridge
North Down
Armagh
NI
Omagh
Carrickfergus
Lisburn
Belfast
Larne
Newtownabbey
Castlereagh
weekly wages (£)
The lowest level of weekly wages…
Weekly wages (resident based), District councils, 2010
550
500
450
400
350
300
Missing out on tourism benefits
Number of visitor nights, district councils, 2010
Number of visitor nights (000's)
2500
2000
1500
1000
500
0
Source: NITB, Oxford Economics
 Strabane would need to grow visitor nights by over 150% to reach mid-table (assuming
the rest of NI did stayed still) – equivalent of an additional 169,000 visitor nights
13
A third of school leavers without 5+ GCSE’s
% of school leavers with 5+ GCSEs A*-C, NI District councils, 2008-09
80
% of school leavers
75
70
65
60
55
Source: DE School Leaver survey
Note: data is based on pupils home postcode
 To match the NI average, the number of school leavers achieving 5+ GCSEs would
need to grow by 4.5% in Strabane
14
Relatively low stock of higher skills
% of population aged 16-64 achieving NVQ level 4 and above, 2009
Achieved NVQ level 4 and above (%)
40
35
30
25
20
15
10
5
De
ag rry
he
ra
fe
lt
M
oy
l
Li
m e
av
Du ad
ng y
an
no
n
Ar
St ds
ra
ba
n
Ar e
m
ag
h
M
No
rth
D
ow
n
Be
l
Co fa s
Ne oks t
wt tow
ow
n
na
bb
ey
Li
sb
ur
n
An
t
Co rim
le
Fe rain
rm e
an
ag
h
Ca Do w
st
n
le
re
ag
B
No anb h
rth r id
er ge
n
Ire
an
Cr
d
ai
Ca ga
rri von
ck
fe
rg
us
O
m
ag
h
Ne
wr La
y
& rne
M
o
Ba urn
e
lly
m
en
a
0
Source: DETI LFS
Note: excludes Ballymoney
 Strabane has amongst the lowest proportion of the population aged 16 to 64 with
higher skills
 Notably lagging its neighbours (Coleraine, Magherafelt, Omagh,Derry and Limavady)
15
High unemployment already a concern
Unemployment Rate, NI District Councils, May 2011
8
Unemployment Rate (%)
7
6
5
4
3
2
1
Ca
Ar
ds
rri
ck
fe
rg
M
us
ag
he
r
Ba afe
lt
lly
m
en
a
La
rn
e
An
t
Ba rim
nb
No r idg
e
rth
D
Ca
ow
st
n
le
re
ag
h
D
Du o w
ng n
an
no
n
O
m
ag
Fe
rm h
an
Co ag
ok h
st
ow
n
Li
Ne
sb
wt
ow urn
na
bb
ey
De
rry
Be
lfa
st
St
ra
ba
ne
Ne
Li
wr
m
a
y
a n vad
d
y
M
ou
rn
e
M
oy
le
Ar
m
ag
Cr
h
ai
ga
Ba
vo
lly
n
m
on
Co ey
le
ra
in
e
0
Source: Nomis, Claimant count
 Strabane has the joint second highest rate of unemployment behind Derry
 It is more than double that experienced in North Down and Castlereagh
16
17
Source: Nomis, Claimant count
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
Jul-04
Jan-04
Jul-03
Jan-03
Jul-02
Jan-02
Jul-01
Jan-01
Jul-00
Jan-00
Jul-99
Jan-99
Jul-98
Jan-98
Number of claimants
Back to 1998 levels…
Unemployment Claimants, Strabane, Jan-98 to May-11
2500
2000
1500
Last time
unemployment
was this high
was September
1998
1000
500
0
st
De
St rry
ra
ba
ne
Li
m
Ne
wr ava
y&
d
M y
ou
rn
e
M
oy
Cr
le
ai
ga
vo
O n
m
a
N. gh
Ire
Du lan
d
ng
an
no
Co
n
ok
st
o
Co wn
le
ra
in
Li e
s
Ba bu
rn
lly
m
on
ey
Do
Ca
wn
rri
ck
fe
rg
us
Ne
L
a
wt
ow rne
na
bb
ey
An
tri
Fe
rm m
an
M
ag
ag
h
he
No raf
rth elt
D
ow
Ar n
m
ag
h
Ca Ard
s
st
le
re
Ba a gh
lly
m
Ba en a
nb
r id
ge
Be
lfa
Income support claimants as % of population
Amongst the highest levels of income support
Income support, N.I & district councils, 2010
16
18
14
12
10
8
6
4
2
0
Source: DSNI
 No surprise Strabane is third - given low wage levels and weakness of labour market
High levels of inactivity
Economic inactivity, district councils, average of 2008-2009
Total 16+ (000's)
University a
big factor
Greater Belfast
commuter zone
19
Source: DETI LFS
Limavady
Coleraine
Derry
Omagh
Belfast
Cookstown
Fermanagh
Carrickfergus
Strabane
Newry & Mourne
Larne
NI
Moyle
Newtownabbey
Armagh
Ards
Castlereagh
Lisburn
Dungannon
North Down
Craigavon
Ballymena
Ballymoney
Magherafelt
Down
Banbridge
Antrim
25.5
45.5
84.0
38.5
213.0
27.5
46.0
30.5
29.5
72.0
27.0
1373.5
14.5
62.5
44.0
63.0
53.0
88.5
43.0
62.0
69.5
49.5
24.0
31.5
52.0
37.0
40.5
Economically
inactivity rate (%)
inactive (000's)
12.5
49.0
21.5
47.3
39.0
46.4
17.5
45.5
94.5
44.4
12.0
43.6
20.0
43.5
13.0
42.6
12.5
42.4
30.5
42.4
11.0
40.7
556.0
40.5
6.0
40.0
25.0
40.0
17.5
39.8
25.0
39.7
21.0
39.6
34.0
38.4
16.5
38.4
23.5
37.9
26.0
37.4
18.5
37.4
8.5
35.4
11.0
34.9
17.5
33.7
12.0
32.4
13.0
32.1
De
St rry
ra
ba
ne
Be
lfa
s
O t
m
ag
Li
m h
a
Co vad
ok y
st
ow
n
Ne Cr
a
wr ig
a
y
& von
No
M
rth ou
rn
er
e
n
Ire
la
nd
M
Ba oy
lly le
m
o
Du n e
ng y
an
Co non
le
ra
in
e
Do
wn
La
rn
Ar e
m
Ba agh
nb
r id
ge
A
M
ag rds
he
Fe rafe
lt
rm
an
ag
h
Li
sb
Ba ur
n
Ne llym
wt
e
ow n a
n
ab
Ca
b
rri
ck e y
fe
rg
us
An
Ca tr
st im
le
No rea
rth gh
D
ow
n
% population receiving incapacity benefits
.
Incapacity benefit recipients amongst the highest in NI
Incapacity benefit recipients, N.I & district councils, August 2010
14
20
12
10
8
6
4
2
0
Source: DSNI
All 16 wards in NI’s worst 200, 9 in worst 100
Ward level deprivation in Strabane, 2010
East
Ballycolman
Castlederg
Newtownstewart
Glenderg
Sion Mills
Finn
Dunnamanagh
North
West
Clare
Victoria Bridge
South
Plumbridge
Slievekirk
Artigarvan
Rank of deprivation
(1=most deprived)
5
27
40
69
73
76
93
95
98
113
130
148
171
173
182
190
Source: NINIS
Note: total of 593 wards in N.Ireland
21
 Strabane already suffers from high
levels of deprivation
 Rising and sustained unemployment
will make it difficult to improve
Strabane DC ranking ( 1 = most deprived, out of 26)
Rank of Extent
Rank of Income Scale
Rank of Employment Scale
Source: NISRA
2005
1
7
9
2010
2
8
9
A need for change
Labour market forecast to continue to ‘flat line’
Total employment, Ireland, Strabane, Northern Ireland, 1993-2020
190
Forecast
180
Ireland
N.Ireland
Total employment (1993=100)
170
Strabane
160
Peak
employment
levels are
not forecast
to return by
2020
150
140
130
120
110
100
Source: Oxford Economics
23
20
19
20
17
20
15
20
13
20
11
20
09
20
07
20
05
20
03
20
01
19
99
19
97
19
95
19
93
90
… and unemployment will remain high (and what of welfare reform?)
Unemployment rates, Strabane, NI, ROI, 1990-2020
18
forecast
Strabane
16
Northern Ireland
Ireland
unemployment rate (%)
14
12
10
8
6
4
2
Source: Oxford Economics
24
20
20
20
18
20
16
20
14
20
12
20
10
20
08
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
0
Population tells interesting story
Above NI growth as strabane benefits and
cross border trade and a housing boom
Population, Strabane & NI, 1990-2020
1950
43
Forecast
1900
1850
41
1750
39
1700
37
1650
Strabane
Northern Ireland
1600
35
1550
33
1500
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: Oxford Economics
25
population (000s)
population (000s)
1800
But forecast
more subdued
Lack of job creation will likely result in out migration
Net migration in Strabane, 1992-2020
200
150
100
forecast
50
20
20
20
18
20
16
20
14
20
12
20
10
20
08
20
06
20
04
20
02
20
00
19
98
19
96
-50
19
94
19
92
Net migration
0
-100
-150
-200
-250
-300
-350
Source: Oxford Economics
 Net out migration will have implications for the housing market, retail demand, stock
of skills, etc
26
Housing market recovery will be protracted…
House prices, Strabane & N.Ireland, 1995-2020
Error in data?
250
forecast
House price (£000s)
200
150
100
N.Ireland
Strabane
50
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
0
Source: Oxford Economics
27
The policy challenge
What is the challenge?
 Strabane needs an additional 800 jobs to match the NI average employment rate
(66.6% in 2010)
 This rises to 1,900 jobs to match the UK average employment rate (71.1% in 2010)
 In addition, Strabane would need the following improvements to match the NI average:
■ 4.5% more school leavers achieving 5+ GCSEs
■ 1,900 more graduates in the population aged 16 to 64 (growth of 39%)
■ 37% increase in average wages (an additional £119 per week)
■ 14.8% increase in average house prices (equivalent of just over £20,400)
■ 1,200 less people on income support (a fall of 61%)
 Remember Strabane has a population of 40,000 and a working age population of
24,400
29
Links between Quality of Life and economic growth
Infrastructure
Labour
Governance &
infrastructure
Crime,
safety &
security
Enterprise
Skills
Quality
of Life
Economy
Health
R&D
Affordability
Environment
Education &
skills
Equality
Culture &
entertainment
 What is the connection - economy drives quality of life or the other way around?
 Answer: both - but what role of policy, getting out of way? Laying foundations?
30
Where might growth come?
•Agri prospects have improved
Employment growth, Strabane, 2010-2020
•Near shoring of production?
•Elderly care
•Tourism
•City of culture / Derry links
•Financial and professional
services still keep growing (despite
the press!)
Agriculture
Extraction
Manufacturing
Utilities
Construction
Distribution & retail
Hotels & restaurants
Transport & communications
Financial services
Business services
Public admin.
Education
Health
Other personal services
Total
Source: Oxford Economics
31
Not likely to be enough
Strabane
number
%
-9
-0.5
-21
-31.5
-108
-11.2
-2
-12.9
21
1.1
152
6.1
51
10.4
32
9.1
-8
-5.2
96
14.7
-59
-12.3
-95
-6.9
62
4.8
48
11.2
167
1.3
Challenges facing NI and Strabane…
 Public sector spending cuts will have an impact over the short term due to over reliance for direct
employment and wages.
 The private sector is underdeveloped relative to the rest of the UK and has a high dependence on small
businesses that are proportionately more affected by the recession and are held back by reluctance to
invest.
 Consumers face debt as a legacy of the over indulgence of the last 10 years and many find themselves
in negative equity, consumer spending will be constrained by future expectations.
 The banking sector is more cautious in lending money and requires sound business cases to do so.
 Export markets are still in recovery, NI currently has the lowest percentage of ‘exporting jobs’ as a
percentage of total jobs (17.4% vs. 35.7% in the UK).
 Republic of Ireland continues to contract and is not likely to experience growth until 2012. Consumer
spending, public sector spending and business investment are estimated to contract in 2011.
 Eurozone growth continues to be held back by economic woes in Greece, Ireland, Spain and Portugal.
Forecasts suggest little improvement in lacklustre growth and labour market conditions throughout 2011.
 Economic balances shifting towards BRIC economies (i.e. Brazil, Russia, India and China), growing from
7% of world GDP in 1990 to 21.6% in 2010
32
From strategy documents to policy practice
 What has changed since the programme for government?
 Can we take brave decisions (water charges, rates, red diesel, council tax)
 Are we honest with the electorate? – we can not afford the economy we have
 What of localism and new powers?
 Why has RPA, workplace 2020 been shelved?
 Recruitment freezes and cutting consultancy spend – hardly good for the need to
rebalance to the private sector and for youth unemployment?
 A new economic strategy is coming (exports and jobs will feature)
 Corporation Tax might come, SFA (investNI capital grants) will come to an end in 2013
 Is Strabane ready – what do we spend., why and what are the results (because we
always did is not a fair answer!)
33
The language of investment
 How can the Strabane outlook be couched in a language of investment?
 Where will investment come from and how can Strabane share the risk?
 A wish list will not work – articulate a vision, a route to get there and a potential
mechanism to fund using a wide range of donors (a Strabane investment bond
perhaps!)
 Is Strabane a functioning geography? What of the North West picture, are we too
parochial?
 Are we realistic – things are not free (social housing, retraining, infrastructure spend)?
 From a place to fund to a place to invest in
 What makes us unique allied to what works for all
Strategies – where and how
34
Sectoral working groups
Regeneration and infrastructure
Creative spirit
Education and skills
Strategy
– where
and how
Environment
Social inclusion
Health
35
A ‘new normal’ economy…
 Economic environment has changed for good – 2007 is not returning
 Economic growth will no longer be debt led (either by consumers or Government)
 Future growth will be driven by the private sector, and in particular by export orientated
activity
 Although the ‘worst’ of the job losses have passed, there is little prospect of significant
job creation over the short term
 Given the profile of likely future growth (for the UK, and NI), the economy will be
increasingly skill hungry
 However the significant pool of unemployed may not be able to supply the skills
demanded by business
 National, regional and local government will be tested like never before
36
Contact Details:
Oxford Economics
Lagan House
Sackville Street
Lisburn
County Antrim
BT27 4AB
UK
Tel: 028 92660 669
Fax: 028 92670 895
[email protected]
A younger population…
Population by age, Strabane, 2009 & 2023
3500
2009
3000
2023
population
2500
2000
1500
1000
500
Source: NISRA mid-year population estimates
38
85
+
10
-1
4
15
-1
9
20
-2
4
25
-2
9
30
-3
4
35
-3
9
40
-4
4
45
-4
9
50
-5
4
55
-5
9
60
-6
4
65
-6
9
70
-7
4
75
-7
9
80
-8
4
59
04
0