Introduction – St Helens Borough Economic Recovery Plan
The coronavirus pandemic has had an impact on every aspect of society, with the response to this bringing a significant challenge to the council, as well as residents and businesses across the borough. As the crisis begins to abate, the economic impact is becoming clearer as well as identifying key activity that will be required to support its recovery over the short-to medium term.
St Helens was once highly industrialised area and has a proud heritage of coal mining, railways and world-famous glass and chemical industries. The decline of these industries led to significant economic restructuring and a resultant reduction in jobs and business opportunity, the legacy of which is still seen today.
Despite considerable positive change in more recent years in terms of the local infrastructure, housing and the environment, St Helens’ comparative economic performance pre-COVID-19 sat within the bottom half of all local authorities. The productivity, or GVA (Gross Value Added, the measure of the value of goods and services produced in an area) of the borough was 25% less than the national average while prosperity (GVA per head) was even greater, at 46% less.
These gaps reflect both lower economic activity and employment rates. Business numbers and growth has both been nearly a third less than the UK average growth rate, and since 2015 a reduction in the business birth rate has impacted adversely on business density. As a result employment growth has also been limited with the ratio of jobs to the working age population being nearly a quarter less than that within the UK.
The age profile of St Helens is comparatively old, with proportionally less people aged 16 and under than and more people over 65, than nationally. The proportion of the working age population is below national and North West levels and has fallen since 1992 and trends suggest this will continue. In addition, the borough has relatively high levels of deprivation and inequality, with nearly a quarter of all neighbourhoods within the borough falling within the most 10% deprived nationally.
Prior to the pandemic, St Helens had made significant progress against its labour market and skills profile. Since 2010, there was a considerable reduction in the number of economically inactive residents, and a significant improvement in residents’ skill levels. However, despite this, economic inactivity remained higher than the UK average, fuelled by high levels of long-term sickness, which reflects the poor health of much of the population.
The Impact of the Coronavirus Pandemic
The impact of the pandemic has been unprecedented. Nationally, around 70% of businesses have seen a reduction in income, 80% of businesses have taken advantage of government assistance scheme where possible, and around 24% having closed down. Of those continuing to trade, over 60% businesses furloughed staff and more than 50% are looking to defer VAT payments.
Encouragement has come from a national increase in online sales, as well as an increase in the number of new businesses, albeit the latter is below the historic average. However, this encouragement must be tempered by the UK falling into recession.
Due to the historic local challenges, the impact of the economic downturn in 2008 was felt disproportionately in St Helens and by 2018 the borough had not recovered to its pre-recession peak. As a result, it is anticipated that the impact of coronavirus will also be disproportionately felt in the borough, particularly amongst young people.
From an economic standpoint St Helens does not face this challenge from a position of strength. In fact, St Helens is projected to have the second largest economic slowdown out of all local authorities within the Liverpool City Region, with an anticipated 39% decline in output. This is due to the high concentration of sectors including; education, retail, construction, and manufacturing that are projected to decline sharply in the short term. Additionally, St Helens has a higher proportion of businesses in accommodation and food services compared to nationally, a sector disproportionately affected by the pandemic with high closure rates.
Despite the initial and on-going efforts of the council to provide support to businesses, it is expected that there will be; a rise in business failure rates, lower business birth rates, a reduction in the number of jobs and reduced capital investment for growth, all of which will impact the economy.
The pandemic also has the potential to quickly exacerbate existing labour market and skills gaps and undo much of the progress made. It also exposes other areas of concern and brings new challenges. It is expected that unemployment will rise rapidly, with an estimated 16,000 jobs at risk, leading more to turn to benefits and initial evidence already showing a significant rise in applications. In addition, the number of new job vacancies has fallen dramatically, pushing those now unemployed further from the prospect of employment.
Supporting the Economic Recovery of the Borough
In response to the pandemic, the council has already done all it could to support our residents and businesses in the short-term, including;
- Ensuring our Ways to Work and Households into Work teams continued to operate during lockdown to continue supporting people back into employment,
- Working closely with partners to ensure the availability of advice and guidance on employment and training opportunities,
- Providing recruitment support and advice to businesses looking to retain and expand their staff, and,
- Successfully reopening our Town Centres,
- Providing additional grant support to Retail, Hospitality and Leisure businesses.
Now, as part of the Council’s plans to recover and reset, we will undertake medium-term activity to enable recovery, as well as long-term plans to reset our economy. Our priority is to support a strong, diverse and well-connected local economy with an aim to; improve economic growth, business density and the numbers of jobs.
The approach will be adaptable in order to respond to the rapidly changing and more challenging environment, as well as incorporating learning from our ongoing engagement with residents, business and partners.
Delivering Economic Recovery in Partnership
St Helens Borough forms part of Merseyside and is one of the six local authority areas, along with Halton, Knowsley, Liverpool, Sefton, and Wirral, that make up the Liverpool City Region.
For many years, the City Region authorities have collaborated closely on key strategic planning issues such as; the economy, infrastructure, housing and environmental assets and these working relationships were formalised by the creation of the City Region Combined Authority in 2014.
In response to the impact of COVID-19 on the regional economy, the Combined Authority developed its Economic Recovery Plan, named Building Back Better, a design for a new, progressive and resilient economy and used as a framework for our own approach, that will cover;
- The business ecosystem,
- People focused recovery, and,
- Place and a green recovery.
This relationship will be essential in order to access devolved recovery funding and regional initiatives that will supplement our own activity. While the Combined Authority will play a major role in delivering economic recovery across the region, we will also look to work closely with stakeholders across our borough, including; business leaders, education providers, young people, public sector partners, and the community and voluntary sector.
St Helens Borough Economic Recovery Plan and associated Action Plan will set out how we will support the economic recovery of the Borough against the Building Back Better framework of business ecosystem, people and place. Our Economic Recovery Plan is in development and will be published on info4StHelens in due course.
Further data and resources