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Local economies ‘broken’ as economic prosperity races ahead of wages

Experts have warned that economies in local areas are currently “broken” due to a disconnect between prosperity and wage increases.

The findings unearthed by Localis found that this relationship between productivity and wages varied considerably across the country, with some of the worst disparity found in the south.

The biggest gap between productivity and wage rises was in Hounslow in London, while Camden, Rushmoor in Hampshire and Mendip in Somerset also featured high on the list.

In contrast, areas in the south west such as north Dorset, Weymouth and Portland, east Dorset and east Devon all enjoyed the greatest increase in wage growth compared to gains in local productivity.

Localis also argued for the government choosing to focus more on developing an industrial strategy on three of the most-advanced areas of England – Greater Manchester, the West Midlands and the Oxford-Cambridge corridor.

Jack Airey, head of research at Localis, said: “These figures show too often the relationship between the individual and the economy is broken, or seen to be broken, and too often works disproportionately better for some than others.

“Across the world, recent votes against the status-quo suggests this to be politically unsustainable for mainstream politics. Tackling many peoples’ estrangement with the economy should be a primary aim of current and future governments.”

Cllr Paul Carter, leader of Kent County Council also described the Local Industrial Strategy as “an opportunity to re-connect employers and employees to local growth and for government and counties to work together in new and creative ways."

Cllr Philip Atkins, vice-chairman of the County Councils Network and leader of Staffordshire County Council, explained that LEPs needed to take more of a lead on local industrial strategies.

“The report suggests that a lack of clarity, powers, and democratic accountability could hinder localised industrial strategies, to be led by LEPs, in the two-thirds of England that are not under mayoral combined authorities. This, Localis argues, could exacerbate economic and social mobility divides across the country,” he stated.

“County leaders acknowledge LEPs are here to stay, and enjoy positive relationships with them locally.

“Counties, as strategic authorities, should play a more important role in localised industrial strategies. They should be at the forefront of economic growth alongside local businesses on LEPs as they know their economics intimately and are responsible for the key growth-related functions of highways, infrastructure, skills and transport that will shape a place’s future prosperity.

“If localised strategies are to deliver positive results for local areas, counties must be firmly be part of the process.”

The findings follow up on Localis’ report from last year ‘The Making of an Industrial Strategy.’

Top image: kbwills


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