Britain’s towns and cities have experienced widely divergent effects from the recession, with Hull leading the list of those hit hardest and Cambridge among those most cushioned from the economic chill, a new study shows.
The unemployment rate rose more than four times as quickly in the East Coast port city as it did in the East Anglian university town during the 21 months of the downturn to last November, according to the Centre for Cities, a think-tank.
In absolute numbers, claimant count unemployment rose by only 705 from February 2008 to November 2009 in Cambridge, a 0.8 percentage point rise. Those seeking work in Hull rose by 6,164, a 3.7 percentage point increase.
In a report published today, the think-tank says that among those in most danger of lagging behind in a recovery are Barnsley and Rochdale, where already high youth unemployment is set to worsen, and Newcastle and Ipswich, which have a high level of public sector employment and will suffer when the Goverment begins to tackle the fiscal deficit. The authors warn of a “jobless recovery” as employers who have hoarded labour during the recession can increase capacity without extra hiring, adding that it would take five years for employment to return to pre-recession levels.
Claimant count unemployment in the towns and cities analysed was 5 per cent in November 2009, up nearly two percentage points from the employment peak in February 2008.
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Apart from Hull, the biggest rises in unemployment in Britain were in Grimsby, Swindon, Birmingham and Doncaster. London, in spite of its dependence on the badly hit financial services industry, experienced a below-average rise in unemployment.
Aberdeen, Blackpool, Oxford and Preston also fared comparatively well. The places most vulnerable when the Government takes a scythe to public sector budgets will be Swansea, Hastings, Ipswich, Newcastle and Barnsley, according to the report.
By sector, the bulk of job losses, as in past recessions, have been in manufacturing, followed by construction and transport, storage and communications. Job losses have been relatively low in the public sector, hotels and catering, business services and finance.
The think-tank said: “Many of the cities that have been hit hardest are places still suffering from the legacy of industrial restructuring and previous recessions. This is widening the gap between cities. The difference between the highest and lowest ten cities in terms of their claimant count has widened by 70 per cent since the start of the recession.”
Theresa May, the Shadow Work and Pensions Secretary, said: “It looks like the recovery will be long and hard. Young people are bearing the brunt of the crisis and we need to do much more to help them into work.”
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Many of the job losses came from high-profile business closures. The administration of LDV, the vanmaker, led to 800 job losses in Birmingham in May. Swindon was hit by the temporary closure of the Honda plant and also by the demise of Woolworths.
The Centre for Cities report said that although the Government’s £1 billion Future Jobs Fund had helped to create 98,000 short-term jobs, it had taken time to get people into jobs and many remain unfilled.
The centre reiterated its call for the Government to target jobs spending on those towns and cities where it is most needed, such as Swindon. It also recommends giving more power to local authorities to make their own spending decisions and widening local authority areas to reduce the challenge of policy co-ordination between councils in big conurbations.
The report concludes, however, that “cities have always grown at different rates, and they always will”.