How to deliver great jobs - towards a regional industrial Strategy for Norfolk and Suffolk

Authors: Sara Mahmoud, Stefan Baskerville

Executive Strategy

Against the backdrop of industrial strategy’s newfound prominence, this study focuses on the areas of Norfolk and Suffolk. Its aim is to examine the possibilities for boosting ‘good jobs’ in these areas whilst supporting the UK’s transition to a low-carbon future. This report focuses on the key sectors of food and drink manufacturing and those associated with the coastal economy; including tourism, fishing and offshore oil and gas and renewable energy. The research is based on interviews with local stakeholders, analysis of quantitative data on the area’s economy and a roundtable discussion at Ipswich Town Hall.

We identified several factors in the Norfolk and Suffolk economies which impact upon prospects for good jobs. These include:

• Low unemployment, low wages, low productivity: the area has lower than average wages and high income inequality. Labour productivity is below the national average and this is likely due to the prevalence of jobs in services industries, such as tourism, retail and social care.
• Manufacturing in decline and pressure on food and drink production: there is a ready supply of cheap labour and little evidence of capital investment. Where productivity has increased, this has often been accompanied by redundancies, stagnant wages and pressure on workers to do more despite there being less staff.
• An important but struggling fishing sector: the prominence of fishing vessels in the counties’ major ports has declined because of shipping, energy and tourism using port infrastructure. The majority of fishing vessels and employment are in the inshore fleet (smaller boats), but their fishing capacity and limited access to quota mean that these fleets struggle.
• Lack of connectivity: the two counties face serious issues with transport infrastructure. Digital infrastructure falls short of national averages and government targets.
• Business and ownership structures pose a challenge to good jobs: management decisions at larger food and drink manufacturers are often responsive to movements in share prices and investor sentiment, exacerbating jobs’ precariousness. The ownership structures of assets and high productivity industries raise questions about how much wealth is retained in the local area.
• Brexit: although the parameters of this are currently unclear, it is difficult to overestimate the impact that changes to trade, immigration, the national regulatory framework and the ongoing devaluation of the pound could have.
• Front line of both climate change and green technology: the natural environment is integral to the area’s identity and economy. It is vulnerable to climate change but is well placed to become an exemplar of how to transition to a green economy.

In response to the challenges outlined above, we identified some key areas for change:

• Nature of work: There is evidence of an erosion of conditions at work and workers’ ability to bargain to improve them. This has implications for the training, cohesion and stability of the work force.
• Skills – where people are at now vs ‘growth industries’: the education sector is not equipping enough young people with the skills needed for jobs in growth sectors. The loss of jobs in oil and gas highlight the risk of losing expertise because of failure to actively manage industrial transitions. The financial and time barriers to re-training for adults are considerable, especially for those who have families.
• Coordination between sectors and organisations: Norfolk and Suffolk have many sectors which are interdependent – an important part of an effective industrial strategy for the area therefore will be identifying and building these links, particularly for local actors.
• Governance structures: Following the collapse of an East Anglian devolution deal, Norfolk and Suffolk lack a cross-county organising structure. The New Anglia LEP is well regarded but lacks funding and staff to fulfil the functions required.

The report brings together all of these findings in order to make some recommendations for a successful industrial strategy which would deliver good jobs in Norfolk and Suffolk.

Objective

• Ensuring that local people and institutions are at the decision-making table and have power to shape policy and practice
•  Delivering good jobs across the country in a way that is consistent with decarbonisation
• Ensuring that local people benefit from the value and wealth generated in their areas

Recommedations to acheive these

1. Real strategic power at a regional level: a new body to coordinate decision-making and get the right voices round the table.
Regional: a new regional body with leadership and participation from local government, employers, unions, universities and colleges, third sector using a social partnership approach to coordinate infrastructure investment, skills coordination, coastal management and industrial transition.
National: work with local institutions to create a network of regional bodies.
 

2. Better pay and productivity in the sectors that need it most such as retail, hospitality and food manufacturing.
Regional: New Anglia or new regional body should convene regional sector groups of employers and unions to address questions of pay and productivity. Local government at city, district and county level should adopt the TUC’s Great Jobs Agenda and take action to promote it, including adoption of the real Living Wage as a first step
National: create new sectoral institutions specifically focused on low-paid sectors and take action to reduce zero hour contracts and introduce a premium pay rate for non-guaranteed hours.

3. Skills strategy tailored to demands of local people and firms equipping young people so they can access future opportunities.
Regional: skills budgets should respond to specific challenges faced in different sectors by better connecting business and education institutions and ensuring better careers advice and guidance for young people about future opportunities.
National: devolve skills budgets so local priorities can be met. Reverse cuts to Further Education budgets. Increase re-training support and financial compensation for people affected by transition. Involve trade unions in the new National Institute of Apprenticeships and Institutes of Technology.

4. Investment for the long term: in transport infrastructure, broadband infrastructure, and science and innovation.
Regional: New Anglia or new regional body should conduct a holistic review of infrastructure needed given future developments including energy construction and decommissioning, and develop a coordinated plan.
National: National Infrastructure Commission to engage with and fund local plan. Replace EU funding for innovation post-Brexit, including Horizon 2020 funding for Low Carbon Technologies. Regional growth fund for fisheries to replace the EMFF, focused on ports.

5. People, employers and government shaping the new economy together through strategic planning and appropriate support for workers, with a focus on the development of low-carbon industry and local assets in the region.
Regional: introduce dialogue between workers and decision-makers and planning mechanisms to ensure future trends deliver for local people. Prioritise social impact and community economic development when appraising investment and funding decisions. Adopt a target for community or locally owned energy.
National: introduce greater support and compensation for adults affected by transition. Set an ambitious national target for energy generation from offshore and marine renewables of at least 50% of energy to come from renewables by 2030. Increase support for local energy supply markets.

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