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North of Tyne tackles economic inactivity

A study of economic inactivity, one of the main barriers to levelling up and causes of labour shortages, has been launched by the North of Tyne Combined Authority (NTCA).

It is it using part of its £51.2m allocation from the UK Shared Prosperity Fund (UKSPF – replacement for European Union funding) and co-operating with the Learning and Work Institute (L&W) to conduct a call for qualitative evidence from stakeholders with experience of working with economically inactive residents in any capacity to help inform future provision.

Although the North East’s problem of having a relatively low employment level is usually thought of in terms of unemployment, economic activity – people of working age who are neither in a job nor seeking one – is actually a much bigger issue nationally, regionally and in the NTCA area, covering Newcastle, North Tyneside and Northumberland.

The most recent annual figures from Nomis, the official Labour Market Statistics, show that in the year to June 2022 the NTCA unemployment rate was 5.4%, or 21,300 people, but the economically inactive rate was almost five times higher at 25% or 127,000 people.

The North East regional picture, including Tees Valley, is very similar with 5.3% unemployed and 25.4% economically inactive. For Great Britain the figures are 3.8% unemployed and 24.1% economically inactive.

North East unemployment is at a historically relatively low level, having fallen to 5.3% only once before since records started in 2004, and that was in 2018. But the regional economic inactivity rate has continued to hover between 23.6% and 27.6% throughout that period.

In North of Tyne, the biggest groups among economically inactive 16-64-year-olds are the long-term sick (28.1% or 35,700 people), those staying at home to look after home and/or family (23% or 29,200 people), students (19.9% or 25,200 people) and retirees (17.4% or 25,200 people).

Of the total economically inactive in the NTCA area, 25.4% or 32,200 people say they want a job and 74.6% or 94,000 do not.

According to NTCA, economic inactivity in its area is particularly high among 20 to 24-year-olds (33%) and amongst those aged 50 to 64 (31%). It is also high among residents with disabilities; in the 12 months to December 2021 only half of working age residents with disabilities in the area were in employment, compared to 77% of working age residents with no disabilities. Employment opportunities for residents with disabilities are often low paid and insecure, said NTCA.

NTCA said that using its UKSPF allocation it will design and launch a new grant programme to enable voluntary and community sector organisations to deliver employment and skills activity to support economically inactive residents.

It said: ‘NTCA’s vision is of a dynamic and more inclusive economy, one that brings together people and opportunities to create vibrant communities and a high quality of life, narrowing inequalities and ensuring that all residents have a stake in our region’s future. Reducing inequalities and improving access to opportunities is also an inherent part of the government’s levelling up strategy and subsequent UKSPF programme.

‘NTCA will invest their allocation of UKSPF resources in activities to achieve this vision. This includes supporting unemployed people and others not active in the labour market to secure jobs. We want to build on the existing investment that NTCA and its partners are already delivering to boost employability among those out of work.’