Mayors and OECD push for Inclusive Growth in Cities

Cities Today - Despite cities being centres of growth in most countries, they are also centres of inequality, says the OECD.

To combat this, a new action plan has been launched in Paris (21 November) by the OECD’s Inclusive Growth in Cities Initiative to help mayors tackle inequality, boost job creation and harness economic development.

“The Tale of Two Cities–to refer to the famous Charles Dickens book–continues to ring true in too many places,” warned Angel Gurría, Secretary-General, OECD.

He said that although cities are thriving and account for 60 percent of total employment creation since 2001 in the OECD, and household incomes are on average 18 percent higher in cities than elsewhere, there is a flipside.

“Copenhagen, Brussels, Paris and Santiago, for instance, all record the highest Gini coefficients in their respective countries,” he said, referring to the economic measurement of inequality.

In areas of health, education and labour markets Gurría added that cities lag behind with “staggering disparities” and where life expectancies vary “by an incredible 20 years across neighbourhoods in London and Baltimore”.

The 50 mayors participating in the initiative have committed to work together across four pillars identified in the action plan.

1. Certifying that education and training systems remediate–rather than reproduce–inequalities.
2. Creating inclusive local labour markets in which workers across the skills spectrum have access to quality jobs.
3. Ensuring investments in housing and urban development lead to more inclusive physical environments and connect people to economic opportunities.
4. And leveraging investments in transport and critical public services to generate returns for both inclusion and sustainability.

Accompanying the action plan, was a new OECD report that highlights how in a globalised labour market, the competition for highly skilled workers and for enterprises creating quality jobs has intensified, both within countries and on a global scale.

Job Creation and Local Economic Development 2016 says the gap between leading and trailing areas has widened, imposing a major constraint on achieving inclusive national growth.

The report provides local policy advice that looks at the design and implementation of skills, employment and entrepreneurship policies to ensure that local economies are not trapped in a vicious cycle of poor quality, low productivity jobs.

Gurría was joined at the meeting by Anne Hidalgo, Mayor of Paris; Darren Walker, President of the Ford Foundation; Khalifa Sall, Mayor of Dakar, and other mayors from around the world.

Source: Cities Today

Unemployment Rises by 14,000 in Scotland

BBC - Unemployment in Scotland rose by 14,000 between August and October to stand at 145,000, according to Office for National Statistics data.

The figures contrasted with the UK as a whole, which saw the jobless total fall by 16,000 to 1.62 million.

The unemployment rate is now 5.3%, compared with 4.8% for the UK as a whole.

Employment in Scotland fell by 40,000 over the quarter and by 24,000 over the year, to stand at 2,592,000.

In November, 54,100 people were out of work and claiming Jobseeker's Allowance.

The Scottish government said Scotland's unemployment rate had fallen by 0.4% over the year, and the nation had outperformed the UK on female and youth employment.

'Economic headwinds'

Scotland's Minister for Employability and Training Jamie Hepburn said: "These figures show that the Scottish labour market is resilient in the face of notable economic headwinds.

"While the unemployment rate fell over the year, it's concerning to see a rise over the last quarter.

"We have the second-highest employment rate out of the four UK nations, but it is clear that the result of the EU referendum has created uncertainty and weakened economic progress.

"In recent months we have announced steps to invest an additional £100m in capital projects in this financial year to help stimulate growth and support jobs, and we are establishing a new £500m Scottish Growth Scheme to support, in particular, small and medium enterprises."

'Supporting jobs'

The UK government's Scottish Secretary David Mundell said the statistics underlined the importance of Thursday's draft budget from the Scottish government.

He said: "The UK government is building an economy that works for everyone across the UK.

"We are supporting jobs and growth by keeping business taxes low and investing in infrastructure.

"As a direct result of the UK government's decisions last month, there will be a City Deal for every city in Scotland, more than £820m of extra funding for Scotland, and new support for digital infrastructure and research and development.

"But the Scottish government now hold the main levers to shape and strengthen the economy.

"They need to use them to boost the prosperity of people in Scotland."

Source: BBC News

Storify Report of the EDAS / SLAED Conference 2016 Published

The Storify event report of the EDAS / SLAED Conference 2016 is now available. This includes presentations for download, a flavour of the social media interaction on the day, and the provisional "asks" of Scottish Government and the economic development community which were generated by conference workshops and discussion. 

The report can be viewed here: https://storify.com/edas_scotland/edas-slaed-conference-2016 

Leading Economic Development Transformation - From National to Local 

On 1st December 2016, EDAS and the Scottish Local Authorities Economic Development Group (SLAED) hosted their first joint conference for those leading Scotland’s economic development. The conference was held in partnership with Aberdeen City Council. 

Set against a backdrop of economic and political change, the event brought together senior professionals from across sectors to discuss how national strategic aims are delivered locally to maximum impact. 

With change across a range of scales, including Brexit, extra Holyrood powers, the agencies' review, budgetary challenges and City Region Deals, the conference represented a timely and important opportunity for leaders in Scotland's economic development community to come together to collectively consider this changing landscape and shape common action.

With insightful and engaging speakers from within and out with Scotland, attendees discussed, considered and contributed to policy and practice that supports effective local leadership for delivering economic development.

A first in Scotland, the conference drew together 100+ leaders from across public, private, voluntary, political and academic spheres relating to economic development decision making and implementation.

BCC Economic Forecast: 2016 Momentum Not Set to Continue

BCC - The British Chambers of Commerce (BCC) has today (Monday) upgraded its UK GDP growth forecast from 1.8% to 2.1% for 2016, and from 1.0% to 1.1% in 2017. However, it has also downgraded expectations for 2018 from 1.8% to 1.4%.

The leading business group upgraded its forecast for 2016 after the UK economy recorded stronger than expected growth in the third quarter. However, the current level of economic momentum is set to slow over the next two years, as continued uncertainty around the UK’s future relationship with the EU and higher inflation are expected to dampen growth in the medium term. 

Based on the data and our own Quarterly Economic Survey, the BCC does not expect the economy to enter into a recession.

The depreciation in the value of sterling since the EU referendum is expected to push up inflation, impacting both consumer spending and business investment. While average earnings are to hold steady, real wage growth is likely to be eroded by inflationary pressures.

The BCC expects UK public sector net borrowing to be £15.2 billion higher over the next three years than predicted by the Office for Budget Responsibility at the 2016 Autumn Statement, with slower expected growth likely to weigh on the UK’s ability to generate tax revenue.

Key points in the forecast:

•  UK GDP growth forecasts for 2016 is upgraded to 2.1%, but is expected to weaken to 1.1% in 2017 before picking up to 1.4% in 2018
•   The improved growth forecast for 2016 is driven by stronger than expected growth in Q3. Growth of 0.5% is expected in Q4 2016
•  GDP growth forecast for 2017 was upgraded slightly from 1.0% to 1.1%, but is still the weakest annual rate of growth since the financial crisis
•  GDP growth for 2018 has been downgraded from 1.8% to 1.4% with higher inflation curbing household consumption and more muted levels of investment, particularly business investment
•  Inflation is expected to breach the Bank of England’s 2% target next year, with a forecast of 2.1% in 2017 and reaching 2.4% in 2018. This is higher than our previous forecast of 1.6% and 1.8% respectively
• Weaker economic activity and erosion of real wage growth by inflationary pressures are expected to causehousehold consumption to slow down from 2.7% in 2016 to 0.6% in 2017 and in 2018
• Business investment is expected to fall by -0.8% in 2016, -2.1% in 2017 and -0.3% in 2018 – better than the previous forecast of -2.2% in 2016 and -3.4% in 2017, but significantly worse than the +1.9% growth previously predicted for 2018
• Export growth is set to slow from 4.5% in 2015 to 2.6% in 2016 and 2.3% in 2017, before increasing to 2.9% in 2018. This is partly in response to the effect of the falling value of the pound on exports being previously overstated
•  Looking at sectors, we predict growth in services at 1.7% in 2017 and 2018, while construction activity is forecast to fall by -2% in 2017. Manufacturing growth is expected to remain steady but muted at 0.8% over 2017 and 2018
•   Public sector net borrowing in the full financial year 2016/17 is predicted to be £3.8bn higher than the OBR predicted in the 2016 Autumn Statement

Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

“In the absence of a clear road ahead, many companies have been adopting a ‘business as usual’ approach in the months since the referendum, which has kept conditions buoyant this year and prevented a sharp slowdown in growth.

“While some firms see significant opportunities over the coming months, many others now see increasing uncertainty, which is weighing on their investment expectations and forward confidence. Lower sterling and rising inflation are now starting to affect business communities and consumers across the UK. While a lower pound is a boon for some exporting businesses, many others see the latest devaluation of sterling less positively, as they are unable to benefit from it. 

“Given our findings, deeper incentives for both investment and exporting will be needed in the months and years ahead. As the Brexit negotiations commence, steps will need to be taken to help ambitious firms overcome the risks, real and perceived, borne out of political uncertainty. 

"It is imperative that government do all it can to help UK businesses overcome risk and take advantage of opportunities. Ministers should start by clarifying the future status of existing EU workers as soon as possible, to end the insecurity now facing employees and businesses alike."

Suren Thiru, Head of Economics at the BCC, said:

“We have upgraded our growth forecasts for 2016 and 2017, but the near-term outlook for the UK economy remains challenging, with the recent resilience in growth expected to weaken. That said, we do not expect the economy to enter into a recession over the next few years.

“Higher inflation and continued uncertainty over Brexit will weigh on the UK’s growth prospects, with consumer spending and business investment likely to be hardest hit. Average earnings should hold steady but inflationary pressures are expected to erode real wages, which will hit the spending power of households.

“Exports will continue to grow but at a slower pace, and the UK’s net trading position is expected to improve as import levels weaken. The decline in the value of the pound is likely to help some exporters, although the lack of responsiveness of UK exports to other sterling devaluations in recent years suggest that its impact on overall export growth has been overstated.

“Uncertainty remains over the longer-term outlook, but the UK’s structural imbalances, including the over reliance on services and household spending as drivers of growth, continues to leave the UK vulnerable to rapid changes in economic conditions.”

Source: BCC Press Office

Regeneration Winners of the 2016 SURF Awards Announced

The outcomes of the 2016 SURF Awards for Best Practice in Community Regeneration were announced on Tuesday night at a celebratory presentation event in Glasgow’s Grand Central Hotel.

Representatives of the four category winning initiatives for 2016 were personally congratulated on their inspiring work by the Scottish Government’s Housing and Local Government Minister Kevin Stewart MSP.

The SURF Awards are delivered each year by SURF, a regeneration forum with 250 cross-sector member organisations across Scotland, in partnership with the Scottish Government. The purpose is to highlight, celebrate and share the achievements of initiatives that address physical, social and economic challenges in communities across Scotland.

SURF’s panel of 18 independent judges are drawn from national regeneration bodies and community groups. They carefully assessed all of the varied SURF Awards nominations in four thematic categories, visiting 13 different shortlisted initiatives from Dumfries to the north of Shetland, before selecting the following category winners:

Creative Regeneration: The Stove Network (Dumfries). A collective of artists that manage a wide range of regeneration activities in Dumfries, raising more than £0.5m in funding to deliver many impressive projects, including a new three-storey town centre arts facility.

Youth Employability: Street League (nationwide). A combined sport and employability programme that uses football and dance fitness sessions as ‘hooks’ to engage out-of-work young people and help them progress into employment, education and training.  

Community Led Regeneration: Tomintoul & Glenlivet Regeneration Project (Moray). An umbrella of projects established by local community groups that have contributed to the Cairngorms area’s remarkable economic recovery, with increased tourism and employment.

Scotland’s Most Improved Town: Lochgelly (Fife). Named ‘Britain’s worst place to live’ in 2004, the former mining town has been transformed by a series of ambitious and collaborative initiatives in recent years, enhancing its physical appearance, pride of place, and reputation.

The four winning projects all demonstrate the value of a long-term approach to regeneration, with dedicated partners working strategically and inclusively to develop comprehensive plans and deliver real and sustainable benefits for all.

Scotland’s Towns Partnership, the nation’s go-to body for towns, supports the competition’s ‘Most Improved Town’ category. Phil Prentice, SURF Awards judge and Chief Officer of Scotland’s Town Partnership, said: “We believe in making the most of positive action in our towns and communities. The SURF Awards highlights those who have excelled.”

Kevin Stewart MSP, Scottish Government Minister for Housing and Local Government, meanwhile stated: “The SURF Awards demonstrate how effective communities are when empowered to deliver the priorities that matter to them most. I am impressed with the diversity of this year’s projects and the impact on people’s lives.”

In congratulating the winners, SURF Chair Pippa Coutts said the real value of the SURF Awards is in highlighting the hard work and dedication invested by people and organisations every day across Scotland to address deep-rooted challenges such as high youth unemployment, poor health and deteriorating buildings in many of our towns and neighbourhoods.

The SURF Awards Presentation Dinner was attended by 250 guests from a wide range of public, private, and third sector organisations. Since 2003, the SURF Awards have been delivered by SURF in partnership with the Scottish Government. In a press release, SURF also gave its thanks for additional support provided by Architecture + Design Scotland, Creative Scotland, Highlands & Islands Enterprise, Scotland’s Towns Partnership and Skills Development Scotland towards the delivery of thematic categories.

Standard of Living More Costly in Rural Scotland: Study

The level of income required to afford a socially acceptable standard of living and to participate in society is ten to thirty per cent more expensive in remote rural Scotland than elsewhere in the UK.

The report on Minimum Income Standard for Remote Rural Scotland 2016, published today, was commissioned by Highlands and Islands Enterprise (HIE), Scottish Enterprise (SE), the Rural and Islands Housing Association Forum (RIHAF) and the Scottish Federation of Housing Associations (SFHA).

It shows the gap between rural and urban areas has reduced slightly, from between ten and forty per cent, since the previous report in 2013.

Falling energy costs have to some extent eased the burden recently. In the longer term, developments such as the extension of broadband access and new delivery networks have the potential to change the way people live and the costs they incur.

The new study highlights the importance of collaboration between public sector organisations and lists a number of important issues, such as heating and transport costs, at which public sector intervention could be targeted to useful effect.

Capitalising on broadband roll-out to create more high-paying jobs can potentially help make rural communities more attractive places to live and work, and boost their long-term resilience.

Ensuring the workforce has adequate access to training and development opportunities and wider support services such as childcare can also help.

Fergus Ewing, Cabinet Secretary for the Rural Economy and Connectivity said: “I welcome this latest Minimum Income Standard Report and note the positive impact that lower diesel and petrol prices has had on those who have to travel long distances. The Scottish Government is already doing much to support rural communities through transport  initiatives  and Rural Fuel Poverty measures, and we will continue to work with rural communities to identify the best solutions to rural challenges.”

Alastair Nicolson, head of planning and partnerships at HIE, said: “That the cost of living is higher in remote rural Scotland will be no surprise to the people who live in these communities. A great deal of public policy is already targeted at reducing that disparity to ensure equality of opportunities in all parts of the country. The roll out of fibre broadband well beyond where the market would reach is one recent example of action in this area.

“This report does however show that a number of factors still conspire to make the cost of living at a socially acceptable standard more expensive in more remote areas, particularly small islands.  While a number of interventions being progressed currently will make an impact, further work is required from the public sector to mitigate the excessive costs associated with living in these parts of the country. We will be working with the Scottish Government and other public sector partners to ensure the full implications from this research are understood and used to help inform planning and priorities across a range of policy areas.”

The full report is available at  www.hie.co.uk/minimum-income-2016 

Source: Scottish Enterprise

Fraser of Allander Institute Publishes December 2016 Economic “Nowcast”

Grant Allan & Stuart McIntyre, Fraser of Allander Institute, Department of Economics, University of Strathclyde

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As usual at the start of the month we update our latest nowcasts of the economic growth performance of the Scottish economy.

These nowcasts aim to give a more timely indicator of current economic performance than official statistics which are produced with a considerable lag.

In estimating our nowcasts we make use of a wide variety of different data sources, including the latest business surveys and information on Scotland’s labour market.

Our model produces the following estimates for the third (Jul-Sept) and fourth (Oct-Dec) quarters of 2016:

• Our latest nowcast for GVA growth in 2016 Q3 is 0.32% which, at an annual rate, is 1.28%.
• Our first nowcast for GVA growth in 2016 Q4 is 0.37% which, at an annual rate, is 1.50%.

Our results continue to be consistent between Q3 and Q4, but our Q3 estimate has been revised down (again) very slightly from last month. This month’s estimates are the 5th nowcast estimates for Q3.

For the 4^th quarter of 2016, this month’s nowcasts, given delays in the release of data, are the first to include data related to Q4 itself. These data were released during November and relate to activity in October. We can see that this has had little effect on our Q4 nowcasts from last month (the very small differences, when rounded to two decimal places, increase the annualised estimate very slightly).

There have been some encouraging signs about the performance of the UK economy in 2016, most obviously the surprisingly strong growth of 0.5% in Q3. The OBR have forecast growth of 2.1% in 2016 (up by 0.1% from their March forecast) while lowering their forecasts for 2017 and 2018.

In Scotland, there remain some mixed signs about the performance of the Scottish economy – although it is certainly the case that the outlook, whilst remaining challenging and uncertain, is slightly more positive than during the summer.

Our latest Fraser of Allander Institute Economic Commentary will be published next Tuesday and will discuss these trends and more.

For now, a few summary points are worth making.

1. The new FAI/SCER Scottish Labour Market Trends report provides some reason to be cautious about improvements in headline unemployment numbers as indicating an improvement in the health of the Scottish economy.

2. The FAI Autumn Statement briefing showed that the Scottish Government budget is increasing very marginally in real terms next year, although it is worth reiterating that this real terms increase in the budget is only for next year. However, it does mean that at least there is not a further hit to Scottish Government demand.

3. The 25^th Oil and Gas survey, produced this week by the FAI in partnership with Aberdeen and Grampian Chamber of Commerce, showed that more contractors have reduced both their permanent and contract staff than at any other point in the history of the survey, many firms felt that the rate of job cuts is likely to slow in the coming year.

4. Our nowcasts suggests that in the third quarter of 2016 the Scottish economy grew more slowly than the UK as a whole, continuing the recent pattern.

The FAI Commentary released later this month will consider all of these issues in more detail.

Source: Fraser of Allander Institute