Sent to Coventry? The Re-employment of the Longbridge 5,000
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Government Aid Adequate; Longbridge 5,000 Let Down by Local Infrastructure
In an analysis of the Government's GBP150 million aid package for the stricken MG Rover car manufacturer and its 5,000 workers, Sent to Coventry? The Re-employment of the Longbridge 5,000, published today, 25 April 2005, The Work Foundation argues that the level of re-training required to get Longbridge workers back to work will require far greater resources than have currently been earmarked.
(Click on the photo to enlarge. High resolution versions are available)
The analysis affirms the Government's decision to offer additional funding to the region in order to re-train the workers of Longbridge and highlights the local failure to foresee the demise of Rover and develop an alternative economic future for the thousands of workers and families affected.
As Professor Marc Cowling, one of the authors of the report says, "An organisational failure of this scale coupled with the particularities of the local economy means high levels of investment in training to correct a local market failure is the right policy decision to have taken."
The analysis argues that with dealer and supply chain redundancies added in, and even with additional European funds being made available, the extra cash for training could amount to as little as GBP5,000 per redundant worker. In order to maintain parity of income and future labour market security training up to level 3 or beyond is almost certainly needed. The level of funding for training as opposed to other priorities needs to be urgently examined.
However, despite this investment, it is a moot point how quickly the active labour market architecture can deliver a quick return to the labour market for the Longbridge car workers given the state of the local economy.
The immediate Longbridge labour market contains a relatively high proportion of unemployed workers not actively seeking employment (discouraged workers), that self-employment rates at 4.8% are barely half the national average of 9% and declining, and that the actual local unemployment rate of 4.3% is higher than the national average by just under 2%. Moreover long-term unemployment at 24.4% in Birmingham and 16.8% in Longbridge is above the national average of 13.9%. While manufacturing jobs in the Birmingham area have declined over the last five years by over 28% and much of the manufacturing work in the region is not particularly high value added.
Furthermore, job growth for male full-time workers is negligible in the region. Thus absorption rates into new jobs will be relatively slow, and will be in other, relatively low skilled sectors where wages are comparatively low. Nor will self-employment soak up many of the unemployed. Levels of local entrepreneurship are currently very modest by national comparisons. The dynamic parts of the economy are elsewhere in the West Midlands region and job growth is in sectors such as construction, public services and other services.
As co-author Nick Isles says, "The Government's injection of money is likely to alleviate rather than resolve. The degree of re-training required for future job opportunities will need to be at NVQ level 3, which is an equivalent of A-level, rather than NVQ level 2 (GCSE equivalent). Local employers such as Network Rail are only offering jobs for the most highly skilled workers. The lessons from elsewhere tell us that re-training has to be of a specific type, both technical and vocational, as there are very few economic returns to other, less advanced forms of work-based training."
As Professor Cowling comments, "It is almost certain that most Longbridge car workers will only find employment opportunities outside their immediate area. If such job opportunities are low skilled and low paid the disincentive effects on such travelling could be considerable. Perhaps some of the money being offered to help with the transition arrangements should go to underwriting the car loans of the newly redundant workers as one way of helping ensure they can get to any new jobs they might find. If they're about to be sent to Coventry they need the means to get there."
Reference Material:
Vcheck” for buyers of used cars, vans and motorbikes.
“Vcheck”, matches registration number and VIN number of a vehicle by checking the DVLA information. It then checks that it’s not stolen or written off by accessing the data from Association of British Insurers (ABI) and official Police (PITO) vehicle data across the UK.
Last year 497,630 were written off (source Vcheck ABI Category 1-4 insurance write-offs) and over 350,000 were stolen (source Vcheck PITO). Figures show that every 20 minutes an unsuspecting car buyer drives off having bought a stolen vehicle.
Before you buy it, Vcheck it! Vcheck costs only £19.95!
In an analysis of the Government's GBP150 million aid package for the stricken MG Rover car manufacturer and its 5,000 workers, Sent to Coventry? The Re-employment of the Longbridge 5,000, published today, 25 April 2005, The Work Foundation argues that the level of re-training required to get Longbridge workers back to work will require far greater resources than have currently been earmarked.
(Click on the photo to enlarge. High resolution versions are available)
The analysis affirms the Government's decision to offer additional funding to the region in order to re-train the workers of Longbridge and highlights the local failure to foresee the demise of Rover and develop an alternative economic future for the thousands of workers and families affected.
As Professor Marc Cowling, one of the authors of the report says, "An organisational failure of this scale coupled with the particularities of the local economy means high levels of investment in training to correct a local market failure is the right policy decision to have taken."
The analysis argues that with dealer and supply chain redundancies added in, and even with additional European funds being made available, the extra cash for training could amount to as little as GBP5,000 per redundant worker. In order to maintain parity of income and future labour market security training up to level 3 or beyond is almost certainly needed. The level of funding for training as opposed to other priorities needs to be urgently examined.
However, despite this investment, it is a moot point how quickly the active labour market architecture can deliver a quick return to the labour market for the Longbridge car workers given the state of the local economy.
The immediate Longbridge labour market contains a relatively high proportion of unemployed workers not actively seeking employment (discouraged workers), that self-employment rates at 4.8% are barely half the national average of 9% and declining, and that the actual local unemployment rate of 4.3% is higher than the national average by just under 2%. Moreover long-term unemployment at 24.4% in Birmingham and 16.8% in Longbridge is above the national average of 13.9%. While manufacturing jobs in the Birmingham area have declined over the last five years by over 28% and much of the manufacturing work in the region is not particularly high value added.
Furthermore, job growth for male full-time workers is negligible in the region. Thus absorption rates into new jobs will be relatively slow, and will be in other, relatively low skilled sectors where wages are comparatively low. Nor will self-employment soak up many of the unemployed. Levels of local entrepreneurship are currently very modest by national comparisons. The dynamic parts of the economy are elsewhere in the West Midlands region and job growth is in sectors such as construction, public services and other services.
As co-author Nick Isles says, "The Government's injection of money is likely to alleviate rather than resolve. The degree of re-training required for future job opportunities will need to be at NVQ level 3, which is an equivalent of A-level, rather than NVQ level 2 (GCSE equivalent). Local employers such as Network Rail are only offering jobs for the most highly skilled workers. The lessons from elsewhere tell us that re-training has to be of a specific type, both technical and vocational, as there are very few economic returns to other, less advanced forms of work-based training."
As Professor Cowling comments, "It is almost certain that most Longbridge car workers will only find employment opportunities outside their immediate area. If such job opportunities are low skilled and low paid the disincentive effects on such travelling could be considerable. Perhaps some of the money being offered to help with the transition arrangements should go to underwriting the car loans of the newly redundant workers as one way of helping ensure they can get to any new jobs they might find. If they're about to be sent to Coventry they need the means to get there."
Reference Material:
Vcheck” for buyers of used cars, vans and motorbikes.
“Vcheck”, matches registration number and VIN number of a vehicle by checking the DVLA information. It then checks that it’s not stolen or written off by accessing the data from Association of British Insurers (ABI) and official Police (PITO) vehicle data across the UK.
Last year 497,630 were written off (source Vcheck ABI Category 1-4 insurance write-offs) and over 350,000 were stolen (source Vcheck PITO). Figures show that every 20 minutes an unsuspecting car buyer drives off having bought a stolen vehicle.
Before you buy it, Vcheck it! Vcheck costs only £19.95!
posted by Jon Fry at 1:16:00 AM
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