North East Devolution and Levelling Up
Penshaw Monument

North East set to miss five out of six jobs targets

The North East Local Enterprise Partnership (NELEP) is set to miss five of its six economic targets by 2024.

Under NELEP’s 10-year strategic economic plan (SEP), the region should gain 100,000 new jobs between 2014, when the SEP was launched, and 2024, when it will have run its course. Of these, 70% are targeted to be in ‘better jobs’ category – managers, directors, senior officials and professionals.

The other four targets involving closing or eliminating the gap in performance between the North East and the rest of England excluding London: reducing the gap in private sector employment density; the gap in the working age economic activity rate; and the gap in gross value added (GVA) per hour worked (productivity), all by 50%; and closing the gap in the working age employment rate completely.

NELEP’s annual review, just published, reveals that by September 2021 the number of new jobs in the region – covering Northumberland, Tyne & Wear and County Durham – had increased from 811,500 in March 2014 to 854,200 in September 2021, an increase of 42,700.

Had the number of new jobs increased steadily at the rate required to meet the target over ten years – i.e. by 10,000 a year – it would have risen by 75,000 to 886,500 by September. So it was 32,300 behind schedule.

According to the annual review: ‘The upwards trend in North East employment growth between 2014 and early 2020 has reversed since the start of the pandemic. Total employment in September 2021 was 26,200 lower than in March 2020.’ At that time job creation was 8,900 ahead of schedule on 880,400.

It is only in the creation of new jobs in the better category that NELEP can still claim to be ahead of target. The region has seen the creation of 56,400 better jobs since 2014 but losses in other categories mean that by a statistical quirk instead of hitting its target of 70% better jobs, NELEP has actually achieved 132%.

Even if total new jobs had still been on schedule in September 2021, at 75,000, better new jobs would have been ahead of target on 75.2%.

The nearest NELEP has come to closing or reducing the gap with the rest of England excluding London is in the employment rate for working age people. The gap had decreased by September 2021, though only by 15% towards its 100% target.

The economic activity rate and productivity had both improved since 2014 but not as much as other parts of the country, so the gap had still widened by 2% and 1% respectively. The gap in private sector employment density compared with England excluding London, far from being reduced, had increased by 23%.

Helen Golightly, NELEP chief executive, said: “We remained delivery focused despite a national policy vacuum caused by delays to the Levelling Up White Paper and national LEP review.

‘Throughout the year we have continued to develop our understanding of the labour market so we understand if our activity is working, or if we need to pivot or accelerate activities to meet changing circumstances and influence partners and government.’

During the 2021/22 financial year, the NELEP published an interim evaluation of the SEP, which assessed its effectiveness and impact, and implementation on the region’s economy. According to NELEP, the evaluation shows the Plan is meeting its targets on job creation and better jobs and moving in the right direction to reduce both the employment gap and the economic activity gap.

In fact, as NELEP’s own report shows, job creation has gone into reverse since the start of the pandemic, while the economic activity gap has widened by 2% since 2014 and the employment gap, though narrowing, is almost certainly doing so too slowly to hit its 100% target by 2024.

Helen Golightly said: “The evaluation gave us lots of recommendations to take forward and highlighted two positive points. It showed the North East LEP has excelled in providing leadership, influence, synergy and engagement around the SEP. And our Local Growth Fund and Enterprise Zone programmes have, to date, indicated good to very good value for money.’