Rotherham in Focus 2009

Rotherham in Focus 2009

An Economic Assessment of the Borough

EETC Building and Wind Turbine, Advanced Manufacturing Park Technology Centre, Waverley

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ROTHERHAM IN FOCUS 2009

Compiled by RMBC Environment and Development Service Research Team

Neil Rainsforth Research & Spatial Analysis Officer

With

Claire Dearden

Tel 00 44 1709 823854 Fax 00 44 1709 823845

Email: [email protected] [email protected]

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CONTENTS

Executive Summary 4 Economy at a Glance 6 Economic Indicators 7 Population 10 Ethnicity 11 Commuting Patterns 12 Gross Value Added (GVA) 13 GVA by Sector 15 Industry 17 Sectoral Analysis 18 Survival Rates of New VAT Registered Businesses 22 Earnings 23 Housing 25 House Prices & Earnings 26 Employment 27 Employment Trends 27 Employment by Sector 28 Employment by Occupation 29 Employment & Size of Business 30 Job Density 31 Labour Market (The Labour Force Survey) 32 Employment Rates 32 Economic Activity 33 Economic Activity by Age 35 Employment & Economic Activity by Gender 36 Labour Market Estimates by Ethnic Groups 37 Worklessness across Rotherham 38 Self-Employment & Business Ownership 39 Employment Gains & Losses 41 Job Numbers 2007/08 41 Other announcements 44 Current Economic Downturn – Future Projections 45 Latest claimant count position 45 Employment projections 46 Investment in Rotherham 47 Education & Training 49 Compulsory Education Key Stage 2 results (11 year old) 49

GCSE results (16 year old) 49 No passes 50 Pupil Teacher Ratio 51

Post 16 Education

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Destinations 51 Working Age Qualifications 52 Work Related Training 53 Higher Education 54

Land & Premises 55 Economic Floorspace 55 Economic Land Uptake 58 Economic Land Availability 59 Performance Indicators 60 Appendices 61 Appendix I Cautionary Note on Statistical Indicators 61 Appendix II Gross Value Added 62 Appendix III Unemployment and the Claimant Count 63 An electronic version of this report is available at: http://www.rotherham.gov.uk/graphics/Business/Information+Sources/EDSRotherhaminFocus.htm

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EXECUTIVE SUMMARY

The purpose of this report is to provide an overall picture of the state of Rotherham’s economy, and to give an indication of where that economy is heading. Although intended as an annual review, data have also been provided historically over a number of years to provide a clearer indication of trends, as well as a ‘snapshot’ of changes over the last 12 months. When measuring economic performance it is important to be aware of economic boundaries such as travel to work areas (TTWAs). In economic terms Rotherham and Sheffield are tied in many respects and indeed a joint report produced by CURS of the University of Birmingham in 2007 concluded that Rotherham and Sheffield can be considered as a distinct economic entity. The most recent reliable commuting data available1 showed that 39% of Rotherham workers commute outside the Borough to work (22% commute into Sheffield) and a figure equivalent to 27% of resident workers commute into Rotherham. No other local authorities in the region have such a strong link in terms of workforce. From the middle of 2008 it became apparent that the UK economy (and other parts of the world) was entering a downward cycle with the impact of the ‘credit crunch’ starting to be felt beyond the financial sectors. The UK officially entered recession at the start of 2009 but at the time of compiling this report the depth and length of the economic downturn is unknown. Due to the delay in publication of official labour market / economic data, particularly at local authority level, the impact on Rotherham’s economy may not be reflected on a large proportion of the figures included in this report. Where possible the most up to-date information / local position is included and a brief section on labour market projections has been incorporated. Rotherham’s employment rate began to show a strong increase during 2001 and this improvement continued up to 2005 as the Borough’s economy grew, with Rotherham’s employment rate remaining close to the national average throughout that year. However during 2006 the rate fell back before stabilising at around 72.0% throughout 2007 and into 2008. The first signs of the economic downturn began to impact in the second half of 2008 with Rotherham’s employment rate at December 2008 having fallen to 70.4%, 3.8 percentage points behind the national average. The more recent increases seen in the numbers claiming Job Seekers Allowance suggests that the employment rate in Rotherham will continue to fall in coming quarter’s data releases throughout 2009 and into 2010. 2008 has seen a 2.2% fall in the level of economic inactivity within the borough with the gap to the national average now at 0.7% and well below the South Yorkshire average. Economic inactivity is most prevalent amongst females and the ‘50 to retirement’ age bracket in Rotherham. The economic downturn began to impact on levels of unemployment in the second half of 2008 with unemployment at December 2008 standing at 7.6% (9,300 people), above the regional (6.5%) and national (5.9%) rates but just below South Yorkshire (7.7%). In contrast to recent years there the number of announcements of job losses in Rotherham has far exceeded the number of job gains in 2008/09. The impact of the national economic downturn on Rotherham’s local job market started to be felt in the middle of 2008 and has carried on into early 2009. There were a total of 2801 job losses announced in the year to end of March 2009, some of the larger / more high profile being at Corus (740 at Aldwarke site), Toyoda Gosei (around 200 due to fall in orders from the car industry), Optare (around 200 on 1 Census 2001

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closure of bus plant at Hellaby), and at Burberry (174 job losses on closure of clothing factory). The manufacturing sector has suffered particularly badly but there have also been significant job losses announced in the business services sector (e.g. Apollo Travel, TSC, and Ventura call centres) and in the retail sector (e.g. Woolworths). There have been some job gains in the year but comparatively small numbers, totalling 981. The latest Regional Econometric Model projections for Rotherham suggest that in the region of 8,000 jobs may be lost to the local economy by 2010. The length of the recession is currently unknown but most analysts (and the econometric model figures) suggest that a slow recovery will begin towards the end of 2009, although actual improvements in employment are not expected to be seen until well into 2010. If these projections prove to be correct the number of jobs in Rotherham will reduce substantially but overall numbers are likely to remain above the levels seen in previous recessions. The model also suggests that the recovery in Rotherham (and indeed nationally) will be slow, with employment not reaching pre-recession levels for a significant number of years. 2007 saw a continuation of the trend of increasing number of VAT registered business in Rotherham with 210 extra businesses at the end of 2007, an increase of 4.1%, above both the regional and national rates of increase. In the sectoral breakdown the Business Services sector noted an excellent growth of 73% between 1997 and 2007 and, together with Retail / Wholesale, has close to half of all VAT registered businesses. There have been improved results in educational achievement in Rotherham at Key Stage 2 (11 years old) and at GCSE level, but levels remain below the national average for both measures. Key Stage 2 results in Rotherham have risen again in 2008; the average points score rising from 233 in 2007 to 236 in 2008, to stand at 95.2% of the national figure. For the sixth successive year Rotherham’s GCSE attainment has improved, for 2008 at a similar rate to the national average. In 2008 the percent of pupils in Rotherham achieving 5+ GCSEs at grades A*-C was 89.7% of the national figure, compared to 89.3% in 2007. However, the 58.1% of pupils achieving 5+ GCSE’s at grades A*-C is well below the 64.8% for England as a whole. There has again been an increase in the percentage of Rotherham school leavers entering education, training or employment as a first destination with the rate now at 92.5%; national rate not currently available for 2008 but this is above the previous national rate. The number of people in Rotherham with no qualifications is significantly higher than the national average (36.8% compared to 29.1% for England & Wales. Source: 2001 Census). Some progress has been made in the level of educational attainment of the working age population with the percentage with NVQ3 and NVQ4 increasing over the year, with the gap to regional and national rates narrowing. There remains a significant gap in the percentage in Rotherham with qualifications at the highest level (NVQ4+) at 8.2 percentage points.

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ECONOMY AT A GLANCE

Rotherham’s Gross Value Added (GVA)2 per capita grew by 2.8% (2001 constant prices) in 2007, compared to a 2.5% increase in Yorkshire and the Humber and 3.0% in the UK. Rotherham’s GVA per capita stood at 86.2% of the UK average. Despite a continuing fall in the percentage of GVA in Rotherham accounted for by Manufacturing it remains the most important sector – 20.0% of GVA, compared to 14.3% nationally.

The number of VAT registered businesses in Rotherham grew by 210 units between the

year end 2006 and year end 2007 and resulted with 5,285 units at the start of 2008. The number of VAT registered businesses in Rotherham has been growing since 1997, as have VAT figures regionally and nationally, though the figure for Yorkshire and the Humber has been increasing at a slower rate over the last few years.

The largest VAT stock increase in Rotherham between 1997 and 2007 was in the

Business Services sector which saw a 73% increase, whilst the Education and Health sector saw a 70% increase, followed by Construction with a 52% increase. The Mining / Utilities and Wholesale / Retail sectors saw the largest falls, while Manufacturing, in contrast with both Y&H and GB, has shown a small positive change.

Average hourly earnings (median for full time workers including overtime) in Rotherham in

2008 were £10.04, compared to £10.96 regionally, and £11.97 in the UK. This represents a fall of 1.2% from the 2007 figure in Rotherham, compared to a 4.6% rise seen regionally and a 4.4% rise in the UK.

The employment rate in Rotherham fell significantly during 2008 with 70.4% of those of

working age in employment at the end of the year – above the South Yorkshire rate, but 3.8 percentage points behind the national employment rate which stood at 74.2%.

After several years of strong growth the number of ‘private sector’ jobs in Rotherham

showed little change between 2006 and 2007 as the number of full time equivalents (FTEs) grew just 0.5% from approximately 70,200 to just over 70,500. Regionally there was a 0.9% increase while the UK saw a rise of 0.7%.

Claimant Count3 in Rotherham rose by 4,576 claimants between June 2008 and June

2009, the highest number for 10 years, mirroring large rises seen across the country. Claimant count rate stood at 5.5% in the Borough in June 2009, 0.8 percentage points above the regional rate and 1.4 percentage points above the national rate.

Continuing improvement in the percent of pupils in Rotherham achieving 5+ GCSEs at

grades A*-C. In 2008 58.1% of pupils achieved this standard, compared to 54.6% in 2007. However, in 2008 Rotherham’s performance was 6.7 percentage points lower than the score for England as a whole.

2008 saw 106,000 square metres of floorspace constructed for economic development

purposes, the second highest year since 2000 (but less than 2007). There was a reduction in the uptake of land for economic development, 14.9 hectares of land being just below the long-term average, with a further 12.2 hectares under development at the end of 2008.

2 Gross Value Added (GVA) - see the Appendix II 3 Difference in claimant count and unemployment rate – see the Appendix III

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ECONOMIC INDICATORS4 This section provides ‘at a glance’ benchmarking between local, regional and national economies. The ‘Relative Local Improvement Indicator’ gives a basic indication of local improvement against national indicators.

Positive economic trend Negative economic trend No change

Rotherham Yorkshire & Humber

UK Relative Local Improvement Indicator

2007 £15,937 £15,520 £18,481

GVA per head 2006 2001 constant prices

% Change 05-06 +2.8% +2.5% +3.08%

Source: Experian Business Strategies / RMBC


UK Relative Local Improvement Indicator

% 86.2% 84.0% 100

GVA per head as % of UK 2006 2001 constant prices

Change 05-06 +0.1% 0.0%

N/A

Source: Experian Business Strategies Ltd / RMBC


GB

Relative Local Improvement Indicator

Dec 2007 5,285 145,240 1,964,920

No of VAT Units at the end of 2007

% Change 06-07 +4.1% +2.7% +3.0%

Source: ONS NOMIS Crown Copyright


GB


% of total 11.3 10.0 10.2

VAT Registrations 2007

Change 06-07 1.1 1.0 0.9



GB


% of total 7.3 7.4 7.3

VAT De-Registrations 2007

Change 06-07 -0.4 0.0 -0.1


4 Change expressed as % change of actual figure, change in actual % of percentage figure, or changes in ratio of ratio figures

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Rotherham Yorkshire & the Humber

UK


2007 70,555 1,369,156 16,464,709

Full time Equivalents Jobs (excluding ‘public sector’)

% Change 06-07 +0.5% +0.9% +0.7%

Source: Business Strategies Ltd / RMBC


UK


2008 £10.04 £10.96 £11.97

Median Average Hourly Earnings

% Change 07-08 -1.2% +4.6% +4.4%

Source: ONS Crown Copyright


GB


Dec 2008 70.4% 73.0% 74.2%

Employment Rate

Change 07-08 -1.6% -0.2% -0.2%



GB


Dec 2008 78.1% 78.1% 78.8%

Economic Activity Rate

Change 07-08 +2.2% +0.5% +0.2%




GB


2008 20.8 25.0 29.0

% of Working Age with NVQ 4+

Change 07-08 +2.5 +1.2 +0.4



GB Relative Local Improvement Indicator

2008 39.7 44.2 47.0

% of Working Age with NVQ 3+

Change 07-08 +3.1 +1.9 +0.6

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Rotherham England


% 58.1% 64.8%

% pupils with 5+A*-C GCSE passes 2008

Change 07-08 +3.7 +3.9

Source: DfES

Rotherham England


% 2.0% 1.4%

% pupils with No GCSE passes 2008

Change 07-08 -1.0 +0.3

Source: DfES The following radar chart gives an overall overview of Rotherham’s main socio-economic indicators in comparison with GB (England in case of GCSE results and England & Wales in case of House Prices).

Rotherham's headline socio-economic indicators compared to GB average

0%

20%

40%

60%

80%

100%

120%Employment rate

Economic Inactivity rate

VAT stock per 10,000 head ofpopulation

GVA per capitaGCSE results (5+ A*-C)

Average Hourly Earnings

House Prices

RotherhamGB

House prices and stocks of VAT registered businesses per head of population stand out in the chart as the worst performing indicators relative to England & Wales. It is, however, important to note that in relation to house prices this reflects not only the situation on the Rotherham housing market, but also the fact that house prices in the North are generally lower than prices in the South. Should we consider percentage relative to the Yorkshire & Humber average, Rotherham would be at 91.8%.

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POPULATION An analysis of Rotherham’s economy requires an analysis of the population of the Borough, as this will have an effect on the performance of the economy. There is a distinct difference in population changes when comparing Rotherham to the region or the country as a whole. Between 1981 and 2007 the population of Great Britain grew by 8.0%, while the regional population grew by 5.3%. Rotherham’s population remained fairly static during the 1980’s and early 1990’s, then began to decline, by 2000 Rotherham’s population had fallen to 97.6% of the 1981 figure, though the population has shown significant increases over the last few years and for 2007 is back to just over the 1981 figure at 253,400.

Population Trends 1981 - 2007

979899

100101102103104105106107108

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

1981

= 1

00

Rotherham Y&H GB

Source ONS NOMIS Crown Copyright

A similar pattern can be seen for working age populations5. Between 1981 and 2007 the working age population of Great Britain increased by 11.2%, while the regional working age population increased by 9.3%. In Rotherham the working age population grew between 1981 and 1984 followed by a continuous decline between 1985 and 2000, this has recovered over the last seven years and is now back above the 1981 level (101%).

Working age population change 1981 - 2007

9698

100

102104106108

110112

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

1981

= 1

00

Rotherham Y&H GB


5 Taken as population aged 15 – 65 from ONS mid year population estimates

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The latest ONS 2006 based sub-national population projections predict that Rotherham’s population will continue to rise at a steady rate over the next 25 years (a 14.6% increase compared to 19.0% nationally and 22.9% regionally). However in common with the whole of the country this increase is concentrated in the older (mainly retired) age groups.

ONS 2006-based sub-national population projections for Rotherham (by 2031)

All Ages, +36,900

Age 0 - 19, +3,100

Age 20 - 39, +3,200

Age 60 - 74, +15,000

Age 75 +, +15,900

Age 40 - 59, -200

-5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

Thousands

Source ONS Crown Copyright

This forecast of stagnation / limited growth in the working age population will have an obvious effect on future economic variables such as number of jobs, GDP, and number of businesses in Rotherham.

ETHNICITY The most recent data is from the 2007 mid-year population estimates by ethnic groups. This indicates that 94.8% of Rotherham’s population were ‘white’ (white British or other white background) compared to 88.2% in England as a whole. 3.1% of Rotherham’s population were of Asian origin, 0.9% of mixed origin, 0.7% of black origin and 0.6% were of Chinese or other ethnic origin.

Ethnic Breakdown (mid-2007 estimates)

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%5.5%6.0%

Mixed Asian Black Chinese / other

% o

f pop

ulat

ion

EnglandRotherham

Source: ONS 2007 mid-year population estimates by ethnic group

For more details about labour market estimates for ethnic groups see Labour Market section on pages 32 - 38.

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Sheffield is a major source for employment opportunities for Rotherham’s workforce, with the 2001 Census origin/destination statistics showed that only 60% of Rotherham’s workers actually worked within the Borough, with 22% of workers commuting into Sheffield. There are several likely explanations for this. Geography Many of Rotherham’s workforce, particularly in the South of the Borough, would

find it easier to get to work within Sheffield’s boundary than Rotherham’s. Employers Many local jobs are located in the lower Don Valley, equidistant between

Rotherham and Sheffield, yet within Sheffield’s borders. Economic Sheffield, as a city economy, will always draw its workforce from the

surrounding hinterland. As the number of jobs has increased significantly in Sheffield in recent years, Rotherham’s workforce would have been a natural source of workers for these jobs

Workplace of Rotherham's Resident Working Population

Rotherham60%

Sheffield22%

Elsewhere10%

Barnsley3% Doncaster

5%

Source: 2001 Census. Crown Copyright

As a result, Rotherham is a net exporter of workers, with 40% of resident workers out commuting, and a figure equivalent to 27% of resident workers in-commuting. Over 30% of Rotherham's workplace population commute into the borough, with Sheffield accounting for 11%, Doncaster 7%, Barnsley 5% and 8% from elsewhere.

COMMUTING PATTERNS

Working population commuting into / out of Rotherham

-41,225

28,596

-12,629

-50,000

-40,000

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

40,000

Com

mut

ing

outs

ide

area

for

wor

k

Com

mut

ing

into

are

afo

r wor

k

Net

out

flow

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GROSS VALUE ADDED Gross Value Added6 (GVA) is an important measure in the estimation of Gross Domestic Product (GDP). GDP is a key indicator of the state of the whole economy. In the UK, three theoretical approaches are used to estimate GDP: 'production', 'income' and 'expenditure'. When using the production or income approaches, the contribution to the economy of each industry or sector is measured using GVA. The link between GVA and GDP can be defined as GVA + taxes on products - subsidies on products = GDP. Official GVA estimates are only produced down to NUTS3 7 level which in the case of South Yorkshire breaks down to Sheffield and an area comprising Barnsley, Doncaster and Rotherham. The following table shows how the GVA compares for each area and the region compares against the UK figure.

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006UK 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Yorkshire & Humber 87.1% 87.2% 86.9% 85.9% 85.0% 85.2% 85.1% 85.0% 84.6% 83.6% 82.9%South Yorkshire 73.2% 73.7% 74.1% 73.3% 72.9% 73.4% 74.0% 74.6% 75.1% 75.1% 74.8%Sheffield 85.1% 85.4% 85.6% 84.4% 83.6% 84.3% 85.0% 85.7% 85.8% 85.7% 85.3%Barnsley, Doncaster & Rotherham 65.1% 65.7% 66.3% 65.7% 65.5% 65.9% 66.5% 67.1% 67.8% 67.9% 67.6%

GVA per head as a percentage of UK (1996 - 2006)


It is important to note that these estimates are on a workplace basis and areas such as Sheffield and Barnsley, Doncaster and Rotherham are not directly comparable as GVA is generally higher for cities than towns. The Regional Econometric Model (provided by Experian Business Strategies) provides estimates of GVA at a local level. Rotherham in 2007 was £15,937, compared to £15,520 in Yorkshire & the Humber, and £18,481 in the UK as a whole. Rotherham’s economy grew by 2.8% in 2007, compared to 2.5% in Yorkshire & the Humber and 3.0% in the UK as a whole.

Comparison of Rotherham and UK per capita GVA 1987 - 2007 (at 2001 constant prices)

£8,000

£10,000

£12,000

£14,000

£16,000

£18,000

£20,000

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Rotherham Yorks & Humber UK

Source: YF / Experian Business Strategies (Mar09 Model)

6 ONS figures at current basic prices, Experian (REM) figures are at 2001 constant prices. Also see Appendix II 7 NUTS = Nomenclature of Units for Territorial Statistics for production of regional statistics in the EU, NUTS3 being the lowest level comprising 133 areas.

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Whilst in the 1980s all three geographies showed a similar rate growth, Rotherham’s economy grew at a significantly slower rate since the recession during the early 1990s, mainly

Rotherham's GVA per capita as a percentage of the UK

66.00%68.00%70.00%72.00%74.00%76.00%78.00%80.00%82.00%84.00%86.00%88.00%90.00%

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Source: YF / Experian Business Strategies

due to declines in output from mining and the financial sectors. Over the 10 year period of 1997 – 2007 Rotherham’s economy grew at an average of 4.3% per annum compared to 2.4% regionally and 2.9% nationally. The growth has been concentrated in the period from 2002 to 2005 (largely due to employment growth) when compared to both regional and national growth. This has resulted in Rotherham’s GVA per capita, as a percentage of UK GVA per capita increasing from 70% in 1994 to 86% in 2007. The last 2 years has seen Rotherham’s rate fall back to be more closely aligned with regional and national rates.

Comparison of GVA growth in UK and Rotherham, 1988 - 2007

-4%

-2%

0%

2%

4%

6%

8%

10%

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Rotherham

Yorks &Humber

UK


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The following table shows the GVA per hour in the locality. Rotherham’s hourly labour productivity in 2007 was £24.27, which compares to £22.81 in Yorkshire and the Humber and £26.775 in the UK8. The large growth seen since 2000 has seen Rotherham overtake the regional average and close the gap to the national average.

2000 2001 2002 2003 2004 2005 2006 2007Rotherham 19.35 20.98 22.22 22.44 23.91 23.18 23.48 24.27Growth (%) 8.4 5.9 1.0 6.6 -3.1 1.3 3.4Yorkshire & Humber 20.03 20.46 20.67 21.46 22.73 21.48 22.82 22.81Growth (%) 2.2 1.0 3.8 5.9 -5.5 6.2 -0.0 UK 24.12 24.51 24.97 25.48 26.37 25.54 26.14 26.77Growth (%) 1.6 1.9 2.1 3.5 -3.2 2.3 2.4

GVA per hour (£)

Source: Experian Business Strategies / ONS Crown Copyright

GROSS VALUE ADDED BY SECTOR Analysis of GVA by industrial sector reveals the importance of manufacturing (heavily dependent on the steel industry) to Rotherham, with this sector accounting for 20.0% despite it declining / becoming less important since the mid 1990s. This compares to just 14.3% for manufacturing in the UK as a whole. The other industry where the difference between the two geographies is significant is the Financial / Business sector – Rotherham standing at 23.0% (despite recent increases) compared to the UK F/B sector accounting for 28.4%.

Rotherham v UK GVA breakdown by sector 2007

0%

5%

10%

15%

20%

25%

30%

Ag/Mining/U

tilitie

s

Manufac

turing

Constru

ction

W'sale/

Retail

Hotels & C

aterin

g

Transp

ort/Comms

Financial

/Busin

ess

PublicOther

% o

f tot

a

UKRotherham


Analysis of real GVA change over time in Rotherham shows that strong annual growth in several sectors has been masked by the decline in GVA from the mining industry. Between 1987 and 2007 Manufacturing (with over 31% in the metal industries), Transport and Communications, the Wholesale / Retail sectors, the Public sector and the Construction sector all showed an average annual growth of between £10 and £16 million. The Financial /

8 Using figure for ‘total weekly hours worked’ from Annual Survey of Hours & Earnings.

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Business sector recorded the highest average annual growth of over £28 million but the Mining industry showed an average annual decrease of over £3.1 million.

Annual real changes in GVA in Rotherham 1987 - 2007

-4

0

4

8

12

16

20

24

28

32

Agricu

lture

Mining

Utilitie

s

Manufa

cturin

g

Constr

uctio

n

W'sale/

Retail

Hotels

& Cate

ring

Tran

spor

t/Com

ms

Finan

cial/B

usines

s

Public

Other

£ m


Analysis of GVA percentage changes shows Transport & Communications as the fastest growth sector with an average annual increase of 7.6% (Utilities show an increase of over 9.2% but this is a relatively small sector). The Construction sector (4.8%) and the Finance/Business sector (6.0%) also saw strong growth, while Mining showed a significant annual reduction of 1.7% per year.

% Annual Change in GVA in Rotherham 1987 - 2007

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Agricu

lture

Mining

Utilitie

s

Manufa

cturin

g

Constr

uctio

n

W'sale/

Retail

Hotels

& Cate

ring

Tran

spor

t/Com

ms

Finan

cial/B

usines

s

Public

Other


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INDUSTRY9

The number of VAT registered businesses in Rotherham rose during 2007, with 210 more businesses registered at the end of 2007 compared to the previous year (5,075 at the end of 2006, 5,285 at year end 2007). This is an increase of 4.1% which compares to smaller increases both regionally (2.7%) and nationally (3.0%). The mid 1990’s in Rotherham saw stagnation in the number of VAT registered units, however since 1999 there has been a steady increase with larger increases in the last few years. At the end of 2007 Rotherham had 24.9% more VAT registered businesses when compared to 1997. Yorkshire & the Humber saw a smaller increase of 18.0% while national stocks rose by 21.3% compared to 1997.

Change in VAT business stock at year end 1997 - 2007

98

102

106

110

114

118

122

126

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

1996

= 1

00

GBY & HRotherham


During 2007, there were 595 new VAT companies registered in Rotherham, which equated to a registration rate of 11.3%, slightly higher than the previous year. There were 385 de-registrations in 2007, which equated to a de-registration rate of 7.3%, slightly lower than the previous year. In relation to the Rotherham population there were 259 VAT registered businesses per 10,000 of adult population at the end of 2007, and 29 newly VAT registered businesses per 10,000 of adult population in 2007. This compares to 409 / 41 businesses nationally. Despite the large increase in business numbers seen in Rotherham in recent years overall stocks remain the lowest in South Yorkshire.

VAT businesses per 10,000 adult population

Great Britain 409Yorkshire & Humber 345South Yorkshire 272Barnsley 271Doncaster 264Rotherham 259Sheffield 283

9 Stock at the beginning of the current year = stock at the beginning of the previous year + registrations in the previous year - de-registrations in the previous year

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20

It is important to note that whilst these figures are the best official guide to the pattern of business start-ups and closures they do not, however, give the complete picture of start-up and closure activity in the economy. Some VAT exempt sectors and businesses operating below the threshold for VAT registration are not covered. At the start of 2008, the VAT threshold was an annual turnover of £67,000, and 2.0 million enterprises in the UK were VAT registered.

SECTORAL ANALYSIS Changes in Rotherham’s stock of VAT Registered businesses have not been uniform across the sectors. 2007 saw the largest increases in the number of firms in the Real Estate / Other business and Construction sectors (a net increase of 75 and 60 respectively). The finance and agriculture sectors both recorded a small (-5) net drop in the number of VAT registered businesses. The strongest percentage growth in VAT registered businesses in recent years in Rotherham has been in the ‘Real Estate / Other Business Activities’, ‘Education / Health’, ‘Construction’ and ‘Finance’ sectors. Between 1997 and 2007 in Rotherham all these sectors have seen increases of over 50%.

VAT changes in Rotherham by Sector

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

Agricu

lture

Mining

/Utili

ties

Manufa

cturin

g

Constr

uctio

n

Wholes

ale/R

etail

Hotel/re

staura

nts

Trans

port/C

ommun

icatio

ns

Finan

ce

Real e

state/

other

busin

ess

Public

admin/

Other s

ervice

s

Educa

tion/h

ealth

% Change yearend 06 - end 07

% Change yearend 97 - end 07


In comparison with the region and the nation as a whole Rotherham’s Manufacturing sector shows a modest positive change as opposed to both other geographies where Manufacturing declined between 1997 and 2007. Other substantial difference is shown in Education and Health where the growth over last decade by far overcomes the growth of Y&H and GB. There was also a large decline in the number of Mining / Utility units in Rotherham, and a slight decline in the Wholesale & Retail sector.

Rotherham in Focus

21

VAT changes by sector in GB, Y&H, and Rotherham (Year end 1997 to year end 2007)

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

Agricu

lture

Mining

/Utili

ties

Manufa

cturin

g

Constr

uctio

n

Wholes

ale/R

etail

Hotel/re

staura

nts

Trans

port/C

ommun

icatio

ns

Finan

ce

Real e

state/

other

busin

ess

Public

admin/

Other s

ervice

s

Educa

tion/h

ealth

GB Y&H Rotherham

Source: ONS NOMIS Crown Copyright The high turnover rates (registrations and de-registrations) in the wholesale / retail sector, and other business activities, may well reflect the fact that these sectors contain many small businesses and cover areas where there are many business start ups and businesses changing hands (hairdressers etc). 2007 (as in the previous two years) is showing a slight reversal in the decline of the wholesale / retail sector, this has seen a decline over the last 10 years possibly caused by the dominance of large retailers such as supermarkets, at the expense of smaller outlets. Note should also be taken of the fact that registrations and de-registrations do not only show the newly born and failing businesses, but also mergers and de-mergers of existing companies (which influences the number of VAT registrations, but not necessarily the number of jobs in existence).

Rotherham VAT registrations & deregistrations by sector in 2007

020406080

100120140160180

Agricu

lture

Mining

/Utili

ties

Manufa

cturin

g

Constr

uctio

n

Wholes

ale/R

etail

Hotel/re

staura

nts

Trans

port/C

ommun

icatio

ns

Finan

ce

Real e

state/

other

busin

ess

Public

admin/

Other s

ervice

s

Educa

tion/h

ealth

Num

ber

RegistrationsDe-registrations


The following pie chart gives an overall picture of the sectoral breakdown of VAT registered businesses in Rotherham in 2007. The Retail / Wholesale sector is the largest with 24.2%, and due to recent very high growth rates the second place belongs to Real Estate / Other

Rotherham in Focus

22

Business Activities. Mining / Utilities, Finance, Education / Health and Agriculture sectors are at the bottom of the list with less than three per cent.

Rotherham stock of VAT registered businesses by sector, at year end 2007

Agriculture3.0% Mining/Utilities

0.1%

Education/health1.6%

Public admin/Other

services5.3%

Real estate/other business

21.9%

Finance0.6%

Transport/Communications

7.9%Hotel/restaurants

7.9%

Manufacturing11.6%

Construction15.9%

Wholesale/Retail24.2%


CHANGES IN FUTURE YEARS: 2008 will be the final update to the BERR ‘Business start-ups and closures: VAT registrations and de-registrations’. From next year users will be directed to the new, more comprehensive, ONS ‘Business Demography: Enterprise Births and Deaths’ statistics which will be produced using common definitions and methodology to ensure greater comparability across the EU. In summary, the key difference between the old BERR statistics and the new ONS Business Demography publication is the inclusion of PAYE registered units. Therefore the new statistics will additionally include the births and deaths of employing businesses, which are not VAT-registered, providing a more comprehensive view of business start-up activity. Figures (provisional) for 2007 from the new dataset for Rotherham shows: Count of new enterprise births = 920 Birth Rate = 14.1% Count of enterprise deaths = 710 Death Rate = 10.8% Total count of active enterprises = 6,545 321 per 10,000 adult population The new dataset increases the number of enterprise ‘births’ and ‘deaths’ and also the total stock, but Rotherham’s position relative to other areas remains relatively unchanged – i.e. business numbers remain below average under the new measure (as below).

VAT businesses per 10,000 adult population

Active Enterprises per 10,000 adult population

Great Britain 409 454Yorkshire & Humber 345 396South Yorkshire 272 339Barnsley 271 325Doncaster 264 327Rotherham 259 321Sheffield 283 359

Rotherham in Focus

23

The inter-departmental business register can be used to look at the turnover of VAT based businesses in the area - the following chart shows how Rotherham compares with the percentage of business, split by turnover band, against national and regional averages.

VAT / PAYE Based Enterprises by Turnover

17.5%

25.2%

27.8%

12.4%

7.8%

7.2%

2.2%

16.6%

24.2%

28.1%

13.1%

8.1%

7.6%

2.3%

15.2%

24.2%

27.6%

13.5%

8.6%

8.1%

2.8%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

0 - 49

50 - 99

100 - 249

250 - 499

500 - 999

1,000 - 4,999

5,000 +

Turn

over

Siz

e (£

thou

sand

s

UK Y & H Rotherham

Source: ONS IDBR 2008 Crown Copyright

It is clear that Rotherham has a relatively higher number of businesses with a high turnover – i.e. businesses in all bands with a turnover in excess of £250,000 per annum. Conversely Rotherham has relatively fewer businesses in the lower turnover bands, a reflection of the overall shortage in business numbers and of the borough’s heavier reliance on large firms for employment. (See section on employment & size of business).

Rotherham in Focus

24

SURVIVAL RATES OF NEW VAT REGISTERED BUSINESSES

The Department for Business Enterprise & Regulatory Reform (BERR) released data in February 2007 showing the survival rates (percentage still in existence, 1 / 3 years from reg.) for VAT registered businesses in Rotherham – similar to both national and regional rates.

1 Y e a r 3 Y e a rsU K 9 2 .1 % 7 1 .3 %Y o rk s h ire & H u m b e r 9 2 .0 % 7 1 .8 %S o u th Y o rk s h ire 9 2 .0 % 7 1 .0 %R o th e rh a m 9 3 .0 % 7 1 .0 %

V A T B u s in e s s S u rv iv a l R a te s

Source: BERR (2007 release)

Full datasets are available at: http://stats.berr.gov.uk/ed/survival/index.asp However, this information will no longer be updated and will be replaced by ONS ‘Business Demography’ statistics: http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15186 The first release of this data in 2009 gives the following survival rates (1 year relates to business births in 2006 and 3 year for business births in 2004), with Rotherham slightly above national and regional rates on the one year measure but below on the 3 year measure.

1 Year 3 YearUK 96.5% 65.3%Yorkshire & Humber 96.4% 64.9%South Yorkshire 96.5% 64.6%Rotherham 96.9% 64.0%

Survival of newly born enterprises

Source: ONS Business Demography 2007

Another source of data on business survival rates is provided by the BETA Model (which also includes non-vat registered companies, using various sources such as Experian, telephone accounts data). This suggests a business survival rate in Rotherham close to the regional and national averages at most years.

Survival Rate Comparison (all enterprises) 1 Year 2 Years 3 Years 4 Years 5 Years 6 Years 7 Years

Rotherham 90.0% 73.2% 66.9% 59.7% 59.0% 47.8% 44.6%South Yorkshire 88.2% 74.4% 67.4% 58.8% 58.0% 47.1% 43.3%Yorkshire & Humber 89.1% 74.1% 67.3% 59.5% 58.1% 54.4% 44.8%UK 89.5% 74.0% 65.9% 57.6% 57.1% 49.0% 44.6%

Source: BETA Model 2008 Local Survival Rates: Local surveys in Rotherham’s managed workspaces Century and Moorgate Crofts show the following survival rates at the end of March 2009 which are significantly better than the overall borough rate:

1 Year 2 Years 3 YearsCentury Business Centre 99.20% 94.58% 88.28%Moorgate Crofts 97.10% 91.30% 81.16%

BUSINESS SURVIVAL RATES:

Source: RMBC

Rotherham in Focus

25

EARNINGS Median average hourly earnings (for full time workers including overtime) in Rotherham in 2008 were £10.04, compared to £10.96 regionally, and £11.97 in the UK. This represents a fall of 1.2% from the 2007 figure in Rotherham, compared to a 4.6% rise seen regionally and 4.4% in the UK.

Average (median) Hourly Earnings 2008(Full-time workers, including overtime)

£11.97

£10.96£10.04

9.00

9.50

10.00

10.50

11.00

11.50

12.00

12.50

UK Y & H Rotherham

£

Source: ONS ASHE Crown Copyright

The gap between local and national wage levels has fluctuated in recent years (possibly due in part to variances caused by the relatively low sample sizes in the survey when applied at a local authority level) but has remained consistently below the national level – between 86% and 92% of the UK median average, although the trend is showing a slight decline. When comparing the earnings levels it is important though to consider the lower cost10 of living for many items in Rotherham.

Rotherham average (median) weekly earnings as percentage of UK (workplace based full-time employees)

90.7%

92.5%

90.6%

88.2%89.0%

92.2%

85.8%

89.1%

92.7%

87.8%

85.0%

86.0%

87.0%

88.0%

89.0%

90.0%

91.0%

92.0%

93.0%

94.0%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Rotherham v UK Trend


10 See house price / earnings ratio page 24.

Rotherham in Focus

26

The graph below shows how the average (median) weekly wage in Rotherham (and that of South Yorkshire) has remained below both the regional and in particular the national levels.

Average (median) Weekly Wage Comparison (full-time employees, workplace based, gross salary)

300.0

350.0

400.0

450.0

500.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

£

UK Y & H South Yorkshire Rotherham


All the above data is workplace based, taken from the Annual Survey of Hours and Earnings (ASHE), which has been developed to replace the New Earnings Survey (NES). Any time series data is only back dated to 1999 and will therefore have been changed slightly to bring into line with the new methodology. A comparison of Rotherham’s residence based11 average weekly earnings and Rotherham’s workplace based12 earnings is shown in the table below. (residence based earnings data are only available from 2002).

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Workplace based earnings £313.3 £332.0 £340.4 £344.8 £359.5 £386.6 £370.0 £395.1 £424.4 £420.0Residence based earnings £364.3 £375.6 £385.9 £385.4 £398.2 £422.0 £427.3

Source: ONS Crown Copyright Historically the earnings of Rotherham’s employed population have been above the level of the earnings of employees working within Rotherham (as people from Rotherham take advantage of higher earnings in workplaces outside the borough, particularly Sheffield). This gap has shrunk over the last few years and workplace / residence based earnings are now broadly at similar levels - an indication that higher paid jobs have been created in Rotherham. Average in all the above relates to the median13, which is considered a more accurate measure for comparison – in areas such as Rotherham with relatively few very high earners using the mean average can skew the data. Mean workplace annual earnings for Rotherham are £26,906, 85.9% of the UK mean of £31,323.

11 Earnings of all employed population living in the borough 12 Earnings of all employees working within the borough 13 The median is the value below which 50 per cent of employees fall.

Rotherham in Focus

27

HOUSING

HOUSE PRICES

The most accurate source of house price data is considered to be the Land Registry House Price Index (HPI) which captures changes in the value of residential properties. The HPI is published by Land Registry using sales data collected on all residential housing transactions, whether for cash or with a mortgage, in England and Wales since January 1995. The standard average house price presented by Land Registry is calculated by taking the average (geometric mean) price in January 1995 (the first starting date of the index) and then recalculating it in accordance with the index change.

The average price of a house in Rotherham at April 2009 was £112,323, compared to £122,339 for the region and £152,898 for the whole of England and Wales. Following falls at the end of the 1990’s house prices in Rotherham have increased substantially since 2001 with annual rates of increase above 20% from 2003 to mid-2005. In the last year Rotherham has seen a fall in house prices of 11.3%, but less than the national fall of 16.2%.

Average Average AveragePrice (£) Price (£) Price (£)

Jan-95 100 62,545 100 58,780 100 56,586Apr-01 142.9 89,350 103.5 60,843 90.1 50,979Apr-03 200.7 125,516 149.3 87,759 126.5 71,599Apr-04 231.2 144,586 186.1 109,395 158.1 89,469Apr-05 252 157,604 212.1 124,647 189.1 107,005Apr-06 261.9 163,792 226 132,858 205.3 116,156Apr-07 285 178,273 242.3 142,413 215.4 121,895Apr-08 291.9 182,557 246.7 144,991 223.9 126,679Apr-09 244.5 152,898 208.1 122,339 198.5 112,323

Rotherham Metropolitan Index

House Price Index 1995 - 2009 (Source: Land Registry)

Month

All England & Wales Yorkshire & HumberIndex Index

Rotherham in Focus

28

As a result the price of a house in Rotherham has increased from 57.1% of the national average in April 2001 to 73.5% in April 2009. (91.8% of the Yorkshire & Humber average)

HOUSE PRICES & EARNINGS Average earnings14 increases in England and Wales have been far below the rate for house price increases, which has resulted in a large rise in the ratio of house prices to earnings. In Rotherham, earnings rose at a similar rate to house prices between 1999 and 2000, with house price inflation only beginning to outstrip wage inflation from 2001. Between 2000 and 2008 the ratio rose from 4.3 to 7.2 in England and Wales, while in Rotherham the ratio rose from 2.8 to 5.7 over the same period with the biggest increases seen since 2003. As a result, housing remains far more affordable for 1st time buyers in Rotherham than nationally, or those looking to move up the property ladder in Rotherham. The ratio has actually fallen slightly in 2007/2008 due to smaller increases in property prices within Rotherham. From early in 2008 house prices began to fall in many parts of the country and this has continued into 2009. Currently at the time of writing the fall in prices appears to be easing with some signs of stabilisation / recovery in the housing market. However many analysts are predicting that house prices may continue to fall further over the coming year - however, there will be regional differences and much will depend on the length of the current recession and the levels of unemployment..

House Price / Average Earnings Ratio 2000-2008

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

2000 2001 2002 2003 2004 2005 2006 2007 2008

Rat

io England & WalesRotherham

Source: Land Registry / ONS Nomis Crown Copyright

* Earnings are workplace based and taken from the ASHE survey

14 All earnings incl. overtime, excl. part time

Rotherham in Focus

29

EMPLOYMENT15

EMPLOYMENT TRENDS

The following chart shows the private sector employment between 1987 and 2007. It tracks the economic boom in the late 80s followed by the recession in the early 90s. Comparing the three geographies, the recession had the worst impact on Rotherham where the employment in 1994 fell down to 88% of the 1986 level. In Rotherham it was however the closure of the Borough’s coal mines and contraction of the steel industry that had the main influence on the decline. Since then employment has increased only slowly but has shown significant gains over the last six years to reach over 70,000 FTE jobs (full time equivalents16) by 2007 – although the last two years has seen little change. The Yorkshire & Humber region and the UK as a whole saw a smaller fall during the recession followed by a more gradual increase.

Private Sector Employment, 1987 - 2007

80

90

100

110

120

130

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

1986

= 1

00

Rotherham Y & H UK

Source: Yorkshire Forward / Experian Business Strategies (Mar09 model) In 2007 the UK had 8.6% more private sector FTE jobs than in 1987 with Yorkshire & Humber showing a similar rate of increase with 9.0% more FTE jobs. Due to the exceptional performance in Rotherham, particularly over the four years between 2001 and 2005, there are now almost 22% more FTE jobs than in 1987. It is important to note that this data demonstrates that though there has been employment growth nationally, this tends to be located in certain places, rather than being uniformly spread. Growth in Yorkshire & Humber has over recent years been concentrated in places such as Leeds and Sheffield, with workers commuting to such areas for employment – the latest figures show that more employment is now being created within Rotherham itself.

15 See cautionary note Appendix I 16 FTE calculated as full time jobs with a value of 1, and part time jobs with a value of 0.4

Rotherham in Focus

30

EMPLOYMENT BY SECTOR

Data for 2007 showed the public sector, financial/business services, manufacturing, and wholesale & retail, as the four most important employment sectors in Rotherham.

Breakdown of employment in Rotherham 2007

Agriculture0.7%

Financial/Business20.4% Hotels & Catering

3.7%Transport/Comms

5.5%

W'sale/Retail14.4%

Construction10.7%

Manufacturing16.1%

Mining0.7%

Other Services5.0%

Utilities0.6%Public Admin,

Education & Health22.2%


In comparison with the UK, the biggest differences in employment were in financial / business sector and in manufacturing. Despite a decline in recent years 16.1% of Rotherham’s working population work in manufacturing compared to only 11.7% in the UK as a whole. The financial / business sector, on the other hand, only employs 20.4% of Rotherham’s population (despite recent strong increases) compared to 22.3% in the UK as a whole.

FTEs comparison by sector 2007

0%

5%

10%

15%

20%

25%

Agr/M

ining/U

tilitie

s

Manufa

cturin

g

Constr

uctio

n

W'sale/

Retail

Hotels

& Cate

ring

Tran

spor

t/Com

ms

Finan

cial/B

usines

s

Public

Other

Rotherham

UK

Source: Yorkshire Forward / Experian Business Strategies (Mar09 model)

Rotherham in Focus

31

Over the longer term, agriculture, mining, manufacturing, utilities, and hotels / catering sectors have all declined in terms of employment in Rotherham, while construction, wholesale / retail, transport / communications, financial / business and public services saw employment growth. In the shorter term there was some strong service sector jobs growth in Rotherham between 2000 and 2007, particularly in transport and communications and the financial & business services sector. The number of manufacturing jobs over the same period has fallen by over 17% although this is less than 21.4% fall experienced regionally and 24.0% fall nationally.

% Annual change in employment in Rotherham 1987 - 2007

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

Agric

ultu

re

Min

ing

Utili

ties

Man

ufac

turin

gCo

nstru

ctio

nW

'sal

e/Re

tail

Hote

ls &

Cat

erin

gTr

ansp

ort/C

omm

sFi

nanc

ial/B

usin

ess

Publ

ic

Othe

r


EMPLOYMENT BY OCCUPATION

There are some clear differences in terms of the occupations of those in employment when comparing Rotherham with regional and national occupations (SOC2000 from the Annual Population Survey October 2007 – September 2008) Rotherham had a lower percent of employees in managerial and professional roles, with 4.4% fewer employees in managerial / professional roles in Rotherham compared to Great Britain. Rotherham had a relatively higher percentage of employees in sales & customer services, perhaps reflecting call centre operations. There was also a relatively higher percentage employed in process / plant / machine operatives, reflecting Rotherham’s relatively high percentage of workers in manufacturing.

GB Y&H South Yorks RotherhamManagers and senior officials 15.5 14.4 13.2 12.2Professional 13.0 11.4 11.4 11.9Associate professional & technical 14.6 12.6 13.1 11.4Administrative and secretarial 11.4 11.5 11.4 10.2Skilled trades 10.9 11.7 10.7 12.2Personal service 8.1 8.0 7.3 8.1Sales and customer services 7.5 8.4 10.1 9.9Process plant & machine operatives 7.1 8.9 10.1 11.1Elementary 11.5 12.7 12.3 12.7

Employment by Standard Occupational Code


Rotherham in Focus

32

EMPLOYMENT & SIZE OF BUSINESS

In Rotherham, as in Great Britain, the vast majority of businesses are small. In 2007, almost 80% of businesses in Rotherham employed under 11 people, 14.5% of businesses employed between 11 and 49 people, 4.8% employed between 50 and 199 people and only 1% employed 200 or more staff.

Breakdown of Rotherham Businesses by size (number of employees), 2007

1-10 employees79.7%

11-49 employees14.5%

50-199 employees

4.8%

200 or more employees

1%

Source: Annual Business Inquiry, NOMIS Crown Copyright

These large firms (200 or more staff) did however account for almost 33% of employment in Rotherham compared to less than 16% employed in small businesses (fewer than 11 employees).

Share of Employment in Rotherham by size of business, 2007

50-199 employees

29.1%11-49 employees

22.4%

1-10 employees15.8%

200 or more employees

32.7%

Source: Annual Business Inquiry, NOMIS Crown Copyright

This highlights Rotherham’s heavier reliance on large companies for employment compared to the national average – in Great Britain large companies (employing 200 or more) accounted for just 31.4% of employment (32.7% in Rotherham) with small companies (those employing less than 11) accounting for 20.8% of employment (15.8% in Rotherham).

Rotherham in Focus

33

JOB DENSITY Job Density is the number of jobs in an area divided by the resident working-age population of that area. For example, a job density of 1.0 would mean that there is one job for every resident of working age. The graph below highlights how the strong jobs growth in Rotherham up to 2006 has impacted on closing the gap to the region and national job density rates.

JOBS DENSITY 2000 - 2006

0.82 0.83 0.83 0.83 0.83 0.84

0.88

0.78 0.79 0.80 0.81 0.82 0.81

0.86

0.64 0.64

0.67 0.68

0.75 0.75

0.81

0.60

0.65

0.70

0.75

0.80

0.85

0.90

2000 2001 2002 2003 2004 2005 2006

Great Britain Yorkshire and The Humber Rotherham

Source: NOMIS / Annual Business Inquiry The map below indicates the employment ‘hotspots’ in the borough – concentrated close to Rotherham town centre and the Templeborough area, but also in the Dearne Valley, Hellaby and Dinnington.

Rotherham in Focus

34

LABOUR MARKET (THE LABOUR FORCE SURVEY / ANNUAL POPULATION SURVEY)

Background information The Government’s Labour Force Survey (LFS) and from 2005 the replacement Annual Population Survey (APS) produce data on the percentage of working age people who are: • Economically active – rate calculated as % of working age population; and • Economically inactive - classified as not working and not having looked for work in last 4 weeks

(includes students, long-term sick, discouraged workers etc); rate calculated as % of working age population

Economically active people can be:

• employed - employment includes those on Government supported training; employment; or • unemployed - classified as not working but having looked for work in the previous 4 weeks

Employment rate is calculated as % of working age population. Unemployment rate is calculated as % of economically active population. Although the LFS (and to a lesser extent the APS) is prone to accuracy problems at small area level, it can still demonstrate general trends particularly over longer periods of time.

EMPLOYMENT RATE Rotherham’s estimated employment rate in the last quarter of 2008 has fallen by 0.8% to 70.4%. The year on year change is a 1.6% fall (72.0% in December 2007) following a fairly stable rate throughout 2007; there was a general downward trend experienced regionally and nationally in the latter half of 2008 as the economic downturn took effect but the fall in Rotherham (and the rest of South Yorkshire) has been more marked and the continuing rises in claimant count in the first months of 2009 suggest employment rates will continue to fall. Unemployment has started to rise significantly, both nationally and regionally, and by the end of 2008 Rotherham’s rate of 7.6% was 1.1% above the region and 1.7% above the national rate but just below the South Yorkshire rate.

Employment rate in Rotherham, Y&H and GB, 2004-2008

70

71

72

73

74

75

76

Dec-04

Mar-05

Jun-0

5

Sep-05

Dec-05

Mar-06

Jun-0

6

Sep-06

Dec-06

Mar-07

Jun-0

7

Sep-07

Dec-07

Mar-08

Jun-0

8

Sep-08

Dec-08

% o

f wor

king

age

pop

ulat

io

Great Britain Yorkshire & Humber Rotherham


Rotherham in Focus

35

Rotherham’s estimated employment rate of 70.4% compares to 74.2% for Great Britain as a whole. After several years of declining employment rates relative to GB figures, Rotherham’s position had been improving up to the end of 2005 but falls during 2006 and in the latter part of 2008 have seen this drop back to 94.9% of the GB average.

Rotherham's employment rate as a % of GB, 2004-2008

94

95

96

97

98

99

100

101

102

Dec-04

Mar-05

Jun-0

5

Sep-05

Dec-05

Mar-06

Jun-0

6

Sep-06

Dec-06

Mar-07

Jun-0

7

Sep-07

Dec-07

Mar-08

Jun-0

8

Sep-08

Dec-08


Trends in estimated economic inactivity in Rotherham during 2008 have fallen from 24.1% at the end of 2007 to 21.9% at the end of 2008 (by comparison in 2002 the economic inactivity rate was at 25.9%, or 4.0% higher than the current rate). The gap to the national average narrowed significantly up to the end of 2005 widened again during 2007 but is now back down to around the regional average; whilst remaining below the South Yorkshire average the gap to the national average is now at 0.7% (GB = 21.2%).

Economic Inactivity rate in Rotherham, Y&H and GB, 2004-2008

20.0

21.0

22.0

23.0

24.0

25.0

26.0

Dec-04

Mar-05

Jun-0

5

Sep-05

Dec-05

Mar-06

Jun-0

6

Sep-06

Dec-06

Mar-07

Jun-0

7

Sep-07

Dec-07

Mar-08

Jun-0

8

Sep-08

Dec-08

% o

f wor

king

age

pop

ulat

io

Great Britain Yorkshire & Humber Rotherham


ECONOMIC ACTIVITY / INACTIVITY

Rotherham in Focus

36

Using data from the APS we can analyse the economically inactive population in Rotherham and compare to South Yorkshire, the Yorkshire & Humber region and Great Britain as a whole as in the table below (period to Sep 2008):

GB Y & H SY Barnsley Doncaster Rotherham Sheffield Inactive - category26.4 24.0 25.9 24.0 31.3 30.8 22.2 Want a job73.6 76.0 74.1 76.0 68.7 69.2 77.8 Does not want a job27.9 25.4 26.7 26.0 37.7 25.2 22.6 Males wanting a job72.1 74.6 73.3 74.0 62.3 74.8 77.4 Males not wanting a job25.4 23.1 25.3 22.3 26.8 35.0 21.8 Females wanting a job74.6 76.9 74.7 77.7 73.2 65.0 78.2 Females not wanting a job

0.3 0.3 0.4 1.2 ! ! ! Not looking - Discouraged8.0 7.0 7.8 9.2 10.7 8.8 5.4 Not looking - Long-term sick6.5 5.4 6.5 5.9 4.6 8.1 6.9 Not looking - Carer3.9 3.2 2.4 2.2 2.8 2.8 2.1 Not looking - Student4.4 4.7 4.8 1.5 8.4 5.4 4.2 Not looking - Other

Reason for not wanting a job:

2007/08 (%)

Source: ONS Crown Copyright; ! – Estimate not available (sample size is zero or disclosive)

There is a great disparity in the proportion of the economically inactive population who want / do not want a job. In Rotherham of the 35,100 working age population who are classed as economically inactive just 10,800 (30.8%) stated that they actually want a job – above the South Yorkshire average. There is a significant difference in the percentage of economically inactive males who would like a job (25.2%) and the percentage of economically inactive females who would like a job (35.0%).

1.3

34.6

28.1

16.9

19.0

1.5

34.0

26.2

15.5

22.8

1.8

35.6

29.7

11.0

21.9

0.0

35.1

32.3

11.2

21.5

0%

20%

40%

60%

80%

100%

GB Y&H SY Rotherham

Economically inactive who want a job - reason for not looking 2007 / 08

OtherStudentCarerLong-term sickDiscouraged


Those who are economically inactive and would want a job have various reasons for not looking. The most common in Rotherham are long-term sickness and carers which account for around two-thirds of the total, similar to the South Yorkshire rate.

Rotherham in Focus

37

Despite the recent rises in the numbers of unemployed in the longer term future employment creation would not be possible in Rotherham without the return of a significant proportion of economically inactive people into the workforce, as either employed or unemployed.

ECONOMIC ACTIVITY BY AGE The difference in economic activity between Rotherham and Great Britain is not uniform when analysed by age (APS data for period ending September 2008). Economic activity in Rotherham is significantly higher in the age groups below the age of 24, which may reflect the lower percentage of young people in Rotherham entering further education. Above the age of 25 the economic activity rate is lower in Rotherham, particularly in the 25-34 and the over 50 age groups.

Economic Activity by Age

54.5

75.9

84.3 85.4

74.3

56.8

79.077.3

85.4

71.4

40.0

45.0

50.0

55.0

60.0

65.0

70.0

75.0

80.0

85.0

90.0

16-19 20-24 25-34 35-49 50-ret

% o

f age

gro

up

GBRotherham


Rotherham in Focus

38

EMPLOYMENT & ECONOMIC ACTIVITY BY GENDER17

Between 1997 and 2001 there was a steady increase in both male and female employment rates in Great Britain which has levelled over the last four years. In Rotherham the male employment rate had risen significantly to reach the national average by 2005 although this has dropped back in the last three years. Similarly Rotherham female employment rates have increased over recent years and it is now close to the GB average.

Employment rates by gender, 1998 - 2008

55.0

60.0

65.0

70.0

75.0

80.0

85.0

May

-98

May

-99

May

-00

May

-01

May

-02

May

-03

May

-04

Sep-

05

Sep-

06

Sep-

07

Sep-

08

%

GB maleRoth maleGB femaleRoth female


In terms of economic activity male economic activity fell by 1.5% in Great Britain between 1998 and 2008, while female economic activity rose by 2.0% over the same period. Rotherham’s male economic activity had showed decline between 1998 and 2001 but was followed by a steep rise up to 2005, with a slight fall back over the last three years. Female activity rates in Rotherham have seen a steady rise over the period, with some fluctuations, but are now much closer to the GB average.

Economic Activity rates by gender, 1998 - 2008

65.0

70.0

75.0

80.0

85.0

90.0

May

-98

May

-99

May

-00

May

-01

May

-02

May

-03

May

-04

Sep-

05

Sep-

06

Sep-

07

Sep-

08

%

GB maleRoth maleGB femaleRoth female


17 Taken as average of last 8 quarters data from LFS up to May 2004 – APS data from September 2005.

Rotherham in Focus

39

LABOUR MARKET ESTIMATES BY ETHNIC

GROUPS18 The following three tables compare the employment rate, economic inactivity rate and unemployment rate for the ‘white’ and ‘ethnic minority’ working age populations taken from the APS (September 2008):

White Ethnic White Ethnic White EthnicUK 76.1% 60.8% 79.5% 70.1% 72.4% 51.4%Yorkshire & Humber 75.5% 54.4% 78.3% 66.5% 72.4% 42.0%South Yorkshire 72.0% 54.3% 75.1% 67.0% 68.5% 40.5%Rotherham 72.2% 53.9% 74.2% 66.6% 69.9% 41.7%

Male FemaleWorking age employment rate: All

White Ethnic White Ethnic White EthnicUK 20.0% 32.0% 16.2% 21.8% 24.2% 42.2%Yorkshire & Humber 20.0% 38.1% 16.3% 24.8% 24.2% 51.6%South Yorkshire 22.9% 37.0% 18.6% 24.3% 27.7% 50.9%Rotherham 21.8% 37.2% 18.0% 22.9% 26.0% 51.0%

% Working age economically inactive: All Male Female

White Ethnic White Ethnic White EthnicUK 4.8% 10.5% 5.1% 10.3% 4.4% 10.9%Yorkshire & Humber 5.5% 12.1% 6.4% 11.5% 4.3% 13.0%South Yorkshire 6.4% 13.7% 7.7% 11.5% 4.9% 17.4%Rotherham 7.5% 13.7% 9.3% ! 5.3% !

Male Female16+ unemployment rate: All

Source: ONS Crown Copyright; ! – Estimate not available (sample size is zero or disclosive)

Whilst the percentages for the ethnic minority group are subject to a relatively large degree of variance, particularly at a district level, it is clear that they have a much lower employment rate and a correspondingly higher rate of economic inactivity (this is particularly true of ethnic minority females) than the ‘white’ population. A more detailed breakdown by ethnic group is impossible for Rotherham from the APS due to very small sample sizes but - Some data comparisons from the 2001 Census (which is based on the 16 to 74 age group) show: • 64% are economically active for the 'white' population, 52% for the 'non-white' population; • economic activity is particularly low in the Asian community at just over 48%,

predominantly due to low female economic activity of 31%; • 35% of Asian females who are economically inactive are classified as "looking after

home/family" compared to just 12.6% of 'white' females economically inactive for this reason;

• the unemployment rate as at Census day for the 'white' population was 4% compared to 7.5% for the 'non-white' population

18 Due to the small sample size of the APS at a local authority level the percentages for ethnic groups are subject to a large degree of variance and should be used as a guide only.

Rotherham in Focus

40

WORKLESSNESS ACROSS ROTHERHAM

Whilst Rotherham has made good progress in recent years in job creation, increasing the employment rate and reducing economic inactivity, there remain large gaps between the least and most deprived parts of the borough in terms of employment. Actual rates of employment and unemployment are not measured / available at geographies below local authority but the numbers claiming worklessness benefits (chiefly Job Seekers Allowance, Incapacity Benefit, and Lone Parents & Others on Income Support) is a good indication. The map below shows levels of workless benefit claimants as a percentage of all people of working age (based on 2007 mid-year estimates) – with particularly high level of claimants close to Rotherham town centre but also smaller pockets, including parts of the Dearne Valley, East Maltby and Dinnington. The percentage of claimants varies from as low as 3.8%, to as much as 35.1% of the working age population in the Super Output Area19 with the highest rate.

Source: NOMIS / DWP Benefit Claimants August 2008

19 Lower layer Super Output Area – 166 areas within Rotherham, each containing approx.1,500 people.

Rotherham in Focus

41

SELF-EMPLOYMENT & BUSINESS OWNERSHIP

The numbers in employment in Rotherham who are self-employed is available from the annual local labour force survey and from 2005 from the APS. As a percentage of all in employment of working age it had been showing a decline since 2000 but then increased again, stabilizing in the last three years at between 9% and 10%. Part of the fall at the beginning of the decade can be explained by Rotherham having a larger percentage increase in the total numbers in employment during this period when compared to national and regional increases – actual numbers self-employed in 2007 are now similar to those in 2000.

Percentage of people in employment who are self-employed (working-age)

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

2000 2001 2002 2003 2004 2005 2006 2007 2008

%

GB

Yorks &HumberSouthYorkshireRotherham

Source: ONS NOMIS Crown Copyright (LaLFS to 2004, APS from 2005)

The comparative low level in the rate of self-employment can be confirmed by looking at the results of Lifestyle survey data, as supplied by Acxiom UK Ltd20, which also gives details on numbers of people thinking of starting a business.

Area

2005 Potential Business Owners




2005 Total Self

Employed

2006 Total Self

Employed

2007 Total Self

Employed

2008 Total Self

EmployedRotherham 4.0% 4.0% 4.2% 2.9% 6.9% 7.1% 7.6% 7.2%South Yorkshire 5.2% 4.0% 4.3% 3.0% 7.1% 8.2% 7.9% 7.4%Yorkshire & Humber 5.8% 4.2% 4.7% 3.4% 8.6% 9.4% 9.0% 9.1%Great Britain 7.0% 4.8% 5.1% 3.7% 10.0% 10.7% 10.3% 10.5%

Self Employed and Potential Business Owners as a % of all Households

Source: © Acxiom UK Ltd.

This is showing Rotherham over three percentage points behind the national rate in the number of households with at least one member being self-employed. The number of potential business owners (those people who were thinking of starting a business) also remains behind the regional and national rates.

20 All rights in this data belong to Acxiom UK Ltd and may not be used or reproduced without the express permission of Acxiom UK Ltd.

Rotherham in Focus

42

It is also interesting using this data to compare the make-up of businesses in Rotherham – the results show the percentage of one person businesses is slightly higher than the national average but the percentage of businesses employing 2-5 is correspondingly lower. Larger employers represent a higher percentage of businesses in Rotherham.

Proportion of businesses by numbers employed

49.2

34.3

16.5

51.2

31. 3

17.5

0

10

20

30

40

50

60

One 2 to 5 6 +

Number employed

Perc

enta

ge

GB Rotherham


Previous years data has indicated that on average businesses in Rotherham have tended to be longer established compared to the region and nationally – this may be evidence of a good survival rate amongst local companies. Data for 2008 (and for 2007) shows a greater number of recently formed businesses– this may be due to natural variances in the data due to survey sampling sizes but may also be an indication of an increase in new local business formations.

37.0 40

.1 41.6

63.0

59.9

58.4

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

% o

f bus

ines

ses

Less than 3 years 3+ Years

Age of business

Age of Businesses

GBY&HRotherham


Rotherham in Focus

43

EMPLOYMENT GAINS & LOSSES

The monitoring of employment gains and losses is carried out for the financial year (April-March) rather than the calendar year (January – December). This is so that it corresponds with other monitoring work which is carried out – not all business openings and closures can be captured but it does give an indication of the net job gains / losses in the year. Around 981 new jobs were announced in Rotherham in 2008/09, the main employer being DC Leisure, who have opened a number of new leisure centres in Rotherham. There were 120 small businesses which opened, creating 1 job each. Several companies created new jobs but no employee numbers were specified. There have been a number of job losses announced during this period, around 2,801 in total. The largest being at Corus, with 740 jobs lost. A number of companies closed including, Wincanton Logistics (distribution centre), private Haulage firm Pawsons, bus makers Optare and clothing factory Burberry.

Job Announcements April 2008 to March 2009 Job Gains 2008/09 Job Losses 2008/09 DC Leisure - Rotherham 75 Corus 740 JD Weatherspoon 40 Wincanton Logistics 230 Yorkshire Facilities Management Ltd 34 E Pawson & Son Ltd 200 Delta Echo Marketing 30 Optare 200 T Winnard 25 Toyoda 200approxRenoirs 25 Burberry 170 Greggs The Bakers 25 Ventura 150 Business Employment Service Training 25 Woolworths (Catcliffe) 102 Fusion@Magna Business Centre 23 Royal bank Of Scotland 96 Find Local Trades 20 Norton Finance 91 J Sainsbury’s Plc 18 Apollo Direct 85 Phones 4U 15 Rosebys 80 Network Space 13 Greencore 70approxBujam Lounge 12 United Biscuits (KP Nuts) 56 Academy Cleaning Services UK 12 Chantry Builders 45 Rope & Sling Specialists 10 Woolworths 40

CRL Properties Ltd 10 London and Scandinavian Metallurgical

40

Hopscotch UK Ltd 8 Premiere Foods 38 Giddy Kippers Yorkshire 8 Fabric Warehouse 22 C2GB International Ltd 8 Alba 20 The Archway Foundation 7 Plaxton Ltd 19 Prestige Damproofing Ltd 7 LUK 19 The White Rooms 6 Staff Recruitment Agency 18 Rotherham Self Storage Ltd 6 Pyronix 13 New County 6 Jump 12 Moore Security 6 Trelleborg Orkot 10 Kashmir Delights 6 Rosebys 9 Harleys Hair & Beauty 6 Land of Leather 9 ZAF Auto Repairs 5 King UK 9 The Clarks Shop 5 Eldon Electrics 6

Rotherham in Focus

44

Reality Office Interiors 5 Oasis Flooring Solutions 5 Nationwide Building Society 5 Mortgare Advice Bureau 5 Fusion Office Interiors 5 Exodus Salvage Ltd 5 Eaga Insulation 5 Coversure Insurance Services 5 Batley Castings Ltd 5 Apna Restaurants 5 A & A Stainless Fabrications 5 Zaf Autos 4 Transworld Furniture Ltd 4 The Mortgage Department 4 Rotherham Fireplace Centre 4 RG Install 4 Red Dragon 4 Pure Party 4 Prime Dental Care 4 Papa Pizza 4 Local Property Adviser 4 Lime Tree Interiors 4 Knife Tech 4 Jacko’s 4 Flat Packs R Us 4 DW Plumbing Services 4 Credit Review Services 4 Burgess Commercial 4 Big Bites Grill 4 Beswicks the Cleaners 4 A Squared Dental Studio 4 A & R Builders Rotherham Ltd 4 Wentworth Farm Shop 3 Warterstars Swim Schools (Todwick) 3 Waterstars Swim Schools (Wales) 3 The Carphone Warehouse 3 Soak 3 Snare Rock Band 3 Sandwich Shop 3 RHS Plumbing & Heating Merchants Ltd 3 Rentokil Pest Control (North Anston) 3 Rentokil Pest Control (Todwick) 3 Redheadz 3 Penco - Maltby 3 Moulders Rest Hotel & Freehouse 3 Moorgate Hair & Beauty 3 MG & Rover Security Specialist 3 Lihoma Chinese Restaurant 3 Knife Tech Ltd 3 K2Recruit 3 Just Fay’s 3

Rotherham in Focus

45

Jazz Interiors 3 Headkandi 3 Golden Keep 3 Fitzwilliam Finance 3 Eye Candy 3 CIP Recruitment Ltd 3 CFC Couriers 3 Bravo Drinks 3 B3 Wealth Management Ltd 3 Aqua Bathrooms & Ceramics 3 Airtech UK 3 Affronte 3 Acorn Commercial Cleaning Services 3 Yorkshire Designer Websites 2 www.sycruiseonline.co.uk 2 Wrong Way Down 2 Wrights Window Cleaning 2 Worktime 2 Waterlily 2 Valentinos Pizzaria 2 Treats4Seats 2 The Pink Group 2 The Highchair & Bed Centre 2 Sunny Travel 2 Style Home Conservatories Ltd 2 Sky High Bounces 2 Shopfront Security 2 Sherwood Fencing 2 Sew Gorgeous 2 S Ryan Services 2 S & M Fireplaces 2 Rockingham Rolls 2 RLC Contractors 2 Pure Technical Services 2 Pronto Balti 2 Patman 2 Paintless Dent Removal Tool Manufacturer 2

PR Auto Tec 2 Ozenbrook Motors 2 Opening All Hours 2 Nige Morton Photography Ltd 2 Muck Busters 2 Mint New Homes Ltd 2 Midas Copy Ltd 2 Mad Academy 2 LCA 2 Kiveton Park & Wales Village Hall 2 King Khana 2 Kabuilders 2 K & K Catering 2

Rotherham in Focus

46

K & B Decorating 2 JPH Recovery Services 2 Joker Publications Ltd 2 Johnnie Johnson Housing 2 JP Neal Independent Funeral Service 2 Identity Design & Print 2 Horsehelpers 2 Happypress Design & Print 2 Handys Butchers 2 Halfords 2 Guidetosavings 2 Gems Cafe 2 Flowed Media 2 Dental Implant Partnership 2 D & B Home Improvements 2 Complete Stairlift Solutions 2 Car Transport Association Broker Service 2

CJ Accessories 2 Butterflies 2 Browns Quality Butchers 2 Aspect Home & Gardens 2 APS Legal & Associates 2 Anacon 2 All Gassed UP Plumbing & Heating Ltd 2 A Star Bathrooms 2 AK Pointing Services 2 Small Companies Creating 1 job each 124 Source: Local Press, RiDO & Internet

LATEST ANNOUNCEMENTS The national economic downturn is impacting on Rotherham’s job market. Job losses are still continuing in 2009/10 • 377 job losses at Corus • 100 lost at TSC due to T-Mobile deciding to switch to a company based in the Philippines • 50 lost with the closure of Apollo Travel call centre • More jobs to be lost at Ventura, with work being outsourced to India However, there have been some modest job gains with announcements of: • 50 jobs with the completion of Tesco at Maltby • 26 new jobs as B&M Discount store have moved into the former Woolworths store • 20 jobs with the expansion of homeflair, creating a gardencentre & café and

bathroom/kitchen showroom.

Rotherham in Focus

47

The national economic downturn which began in the latter part of 2008 and the impact of the current recession across the UK has been well documented. Rotherham, in common with most parts of the country, has felt the impact with several high profile company closures / job losses announced such as the Burberry clothing factory and part of the Corus steel works plant in the borough. These closures and many other job losses announced across other sectors (including business services) are now being reflected in a rising unemployment rate. Official unemployment / employment data at a local authority level is released some 7/8 months in arrears so at the time of writing the impact is yet to be fully reflected in these figures. However, the latest unemployment figures, as measured by the numbers claiming Job Seekers Allowance benefit, show that claimants in Rotherham have more than doubled over the last year to reach the highest level since April 1998.

Claimant Count - Rotherham

3,96

2

4,19

6

4,59

2

4,71

1

5,01

0

5,59

2

6,17

2

6,98

9 7,98

4

8,31

7

8,52

6

8,61

8

8,53

82.6% 2.7%3.0% 3.0%

3.2%3.6%

4.0%

4.5%

5.2% 5.4% 5.5% 5.6% 5.5%

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

June

2008

July

2008

Augus

t 200

8

Septem

ber 2

008

Octobe

r 200

8

Novem

ber 2

008

Decem

ber 2

008

Janu

ary 2

009

Febr

uary

2009

March 2

009

April 2

009

May 20

09

June

2009

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Number Rate

Source: NOMIS – ONS Claimant Count Rotherham, along with the rest of South Yorkshire, has seen a comparatively bigger percentage rise compared to the regional or national rates of increase – possibly a sign of the relatively higher importance of manufacturing (which has been one of the hardest hit sectors) in the local economy.

Claimants Rate Claimants Rate Claimants RateRotherham 3,962 2.6% 8,538 5.5% +4,576 +2.9%South Yorkshire 21,403 2.6% 41,679 5.1% +20,276 +2.5%Yorkshire & Humber 80,827 2.5% 152,746 4.7% +71,919 +2.2%Great Britain 809,957 2.2% 1,504,117 4.1% +694,160 +1.9%

June 2008 June 2009 Change:

Source: NOMIS – ONS Claimant Count

CURRENT ECONOMIC DOWNTURN – ROTHERHAM’S FUTURE PROSPECTS

Rotherham in Focus

48

However, despite the rapid rise in claimants over the last year, the current impact is less severe than Rotherham experienced in the previous two recessions. Due to Rotherham’s former heavy reliance on coal mining and traditional manufacturing (in particular the steel industry) for much of its employment the claimant count exceeded 20,000 in the mid-1980’s and again topped 14,000 during the recession of the early 1990’s. Most analysts expect the UK unemployment numbers to continue rising through 2009 and into 2010 and this will likely be the case within Rotherham – hopefully the high point will remain some way below the peaks seen in the 80’s / 90’s recessions. The expected impact on workplace employment in Rotherham going forward is illustrated below – this is workplace based data (i.e. the jobs are based within the borough) taken from the Regional Econometric Model as supplied by Yorkshire Forward / Experian. Figures are full-time equivalent jobs, where a part-time job is counted as 0.4 of a full-time.

YF / Experian Regional Econometric Model - Rotherham workplace predicted employment (Full Time Equivalent's)

108,003

104,468

105,835

103,690

102,604102,549

105,017 105,268

106,938

100,000

101,000

102,000

103,000

104,000

105,000

106,000

107,000

108,000

109,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

FTE'

s

March 09 Model (using updated projections)

Source: Yorkshire Forward / Experian Regional Econometric Model All figures are estimates and the employment fall to 2010 is based on the latest econometric model projections (March 2009 version). A projected drop of around 6,500 FTE’s equates to approximately 8,000 jobs lost to the local economy by 2010. These are obviously only projections using the best currently available data – they may prove to be overly optimistic / pessimistic. The length of the recession is also currently unknown but most analysts (and the econometric model figures) suggest that a slow recovery will begin towards the end of 2009, although actual improvements in employment are not expected to be seen until well into 2010 (employment upturn ‘time-lag’ as experienced in previous recessions). If these projections prove to be correct the number of jobs in Rotherham will reduce substantially but overall numbers are likely to remain well above the level seen in previous recessions. This suggests that the recovery in Rotherham (and indeed nationally) will be slow, with employment not reaching pre-recession levels for a significant number of years. Projecting this further forward is a far from accurate science and is purely based on expected national (and world) economic trends and a reflection of Rotherham’s sectoral make-up.

Rotherham in Focus

49

The actual position will depend upon the long-term strength of the local economy / businesses and the extent to which local regeneration and investment initiatives such as the YES! Project, Waverley / Advanced Manufacturing Park, etc succeed in creating employment. Conclusions:

• Rotherham’s unemployment is likely to continue to rise throughout the remainder of 2009 and into 2010 but the rate of increase is likely to moderate.

• Rising unemployment is not exclusively confined to low skilled / manual sectors and within ‘traditional’ deprived areas of the borough – job losses are also occurring within the newer service sectors and higher skilled occupations.

• Unemployment in Rotherham is unlikely to reach the levels seen in the previous recessions of the 1980’s and 1990’s.

• The diversification of the local economy over recent years and less reliance on the traditional manufacturing sectors should help to lessen the severity of the current recession in Rotherham.

• There will be a likely loss of over 8,000 jobs in Rotherham’s workplace employment – but a significant proportion of the large increase seen in workplace jobs in the last 10 years is expected to remain.

• Any significant recovery in the labour market is unlikely to be seen until the end of 2010 / beginning of 2011, with only a moderate / sluggish increase in employment numbers going forward.

• Employment could take over 10 years to recover to pre-recession levels. How quickly Rotherham can recover the jobs lost during this period will depend not only on the performance of the national economy but also on the success of local regeneration / investment initiatives and the strength of local businesses.

Rotherham in Focus

50

INVESTMENT IN ROTHERHAM

During April 2008 to March 2009, the Rotherham Investment & Development Office (RiDO) recorded investment in the borough and job-creation by 500 companies. • The majority of these companies were new companies with 3 being from overseas,

consisting of Indian, Polish & Irish. • A total of 305 companies were new start-up operations. • 40 of the companies were national expansions/relocations - new to Rotherham but already

set up elsewhere in the UK. • Rotherham companies accounted for 114 expansions and relocations within the borough. Some companies may not have given their investment and job details for April 2008 to March 2009, however, those that did, show that a total of 1,831 new jobs have been created during this period, with 3,557 jobs being safeguarded within the borough.

Origin of Companies

Start-UpsOverseasRotherham CompaniesUK Companies

Source: RiDO 2008/09

More details on inward investment in Rotherham can be obtained from RiDO (Rotherham Investment & Development Office) http://www.rido.org.uk

For more detailed information on job announcements please see the previous section, Job Losses & Gains, on pages 41-44.

Rotherham in Focus

51

EDUCATION & TRAINING

COMPULSORY EDUCATION

KEY STAGE 2 RESULTS (11 YEAR OLD)

Key Stage 2 results in Rotherham have risen in 2008 but with little change relative to the national figure. In 2009 Rotherham’s average points score was 95.2% of the national figure, compared to 95.1% in 2007 and 93.4% in 2006. However the gap between local and national attainment is significantly less than at the end of the 1990’s, and less than in educational attainment for other age groups.

Key Stage 2 Performance 1999 - 2008

180

190

200

210

220

230

240

250

260

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Avg

poi

nts

scor

e

RotherhamEngland

Source: DFES

GCSE RESULTS (16 YEARS OLD) For the sixth successive year Rotherham’s GCSE attainment has improved - for 2008 at a slightly higher rate compared to the national average. In 2008 the percent of pupils in Rotherham achieving 5 or more GCSEs at grades A*-C was 89.7% of the national figure, compared to 89.3% in 2007. However, there remains a significant gap between Rotherham’s GCSE performance of 58.1% of 15 year old pupils achieving this standard compared to the average of 64.8% in England. Educational attainment at the age of 16 is far more affected by external influences, and Rotherham traditionally had a culture where education attainment was relatively less important, as it was not an essential for gaining employment in mining or low technology manufacturing. Changes in the make up of the local job market since the 1990s and the importance now placed upon educational achievement may now be overcoming this culture and showing in the improved results.

Rotherham in Focus

52

GCSE Attainment 1999 - 2008 (based on 15 year olds)

35%

40%

45%

50%

55%

60%

65%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

% 5

+ A

*-C

RotherhamEngland

Source: DFES

It can also be argued that some pupils who are not expected to perform as well at traditional GCSEs now undertake other equivalent qualifications / vocational qualifications which had not been reflected in the GCSE attainment scores. However, since 2004 GNVQ’s and other approved qualifications have been included in the scores.

NO PASSES The percentage of pupils in Rotherham achieving no GCSE passes has fallen significantly in recent years but still lags a little behind the national figure. In 2008 2.0% of pupils in the co-hort failed to get a single pass at GCSE (or other entry level qualification since 2004), compared to 1.4% nationally.

Percentage of Pupils with no GCSE Passes (includes other entry level qualifications since 2004)

1%

2%

3%

4%

5%

6%

7%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

RotherhamEngland

Source: DFES

Rotherham in Focus

53

PUPIL TEACHER RATIOS

Pupil teacher ratios in Rotherham have improved in recent years with the ratio for secondary schools now below the average for England. The number of pupils per primary school teacher in Rotherham has also fallen but less quickly, from 23.8 in 1999 to 22.6 in 2008, this compared to 21.6 in England as a whole. The number of pupils per secondary school teacher in Rotherham fell from 17.2 in 1999 to 14.9 in 2008 (against 16.1 for England).

Pupil - Teacher Ratios 1999 - 2008

14

16

18

20

22

24

26

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Rat

io

England PrimaryRotherham PrimaryEngland SecondaryRotherham Secondary

Source: DFES

POST 16 EDUCATION

DESTINATIONS Recent years have seen an increase in the percent of Rotherham school leavers entering education, training or employment as a first destination, with just a small decline in both Rotherham and England between 2001 and 2002 going against the general upward trend. In Rotherham in 1997 84.7% of leavers entered one of these paths; by 2008 this figure has increased to 92.5%. Rotherham has also closed the gap in terms of destinations over recent years, in 1999 there was a 3.8 percentage point difference in terms of leavers choosing one of the above options but by 2003 and in 2004 this gap had been closed. After a dip in 2005 the figures for the last three years have again shown improvements with the gap to the all England average of 91.5% (in 2007, 2008 data not currently available) now just 1.1 percentage points.

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Percentage of School Leavers (Year 11) into Education, Employment or Training

82

84

86

88

90

92

94

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

%

England Rotherham

Source: Nald-NE The increase in those entering education, employment or training, both locally and nationally, was largely due to an increased uptake of full time education resulting from wider availability of further education as a destination for school leavers. However Rotherham also has a higher percentage entering employment or work-based training than experienced nationally.

WORKING AGE QUALIFICATIONS There are significant differences in working age qualification levels in Rotherham compared to Great Britain as a whole with the local working age population tending to have lower levels of qualification compared to the national picture. In 2008 the proportion of working age people with NVQ level 1 or above in Rotherham was just 0.7 percentage points lower than the national figure. However, at NVQ level 2+ the difference increased to 5.9, with differences of 7.3 and 8.2 at NVQ3 and NVQ4 respectively.

Working Age NVQ Qualifications

0102030405060708090

NVQ4 andabove

NVQ3 andabove

NVQ2 andabove

NVQ1 andabove

% w

orki

ng a

ge p

opul

atio

n

Rotherham (%)GB (%)

Source: NOMIS / ONS Copyright Annual Population Survey (Jan-Dec 2008)

Qualification levels at the lower levels have improved over the last few years in Rotherham compared to Great Britain - between 2001/02 and 2008 the proportion with NVQ1+ and

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55

NVQ2+ improved at a slightly higher rate to that nationally to stand at 99.1% and 91.0% of the national figure respectively. Numbers with no qualifications have fallen from 18.8% to 16.6% although remaining 4.2 percentage points above the national average. Over the same period the proportion with NVQ 3 has remained fairly stable at close to 80% of the national figure but improving in the last year to 84.5%. The proportion with NVQ 4 or above (the highest level of qualification) has increased from 59.7% to 71.7% of the GB average. The strong increase in NVQ 4 attainment during this period, is reflected in the higher education data (although the higher education data is measured as a proportion of total population as opposed to working age), which showed a strong increase in numbers of Rotherham residents graduating from higher education (page 55). However, the gap remains substantial and will need to be reduced further as companies are increasingly looking for a more highly skilled workforce when locating / investing - graduate retention in the local labour market is a key factor, with Rotherham currently having less employment prospects in the higher paid management and professional occupations. Improvements in lower level NVQs are the result of various factors including improved GCSE attainment, increased access to further education amongst the adult population, and increased numbers in employment enabling more people to benefit from job related training.

Relative NVQ Qualifications

50%55%60%65%70%75%80%85%90%95%

100%

2001-02

2002-03

2003-04

Dec-05 Dec-06 Dec-07 Dec-08

GB

= 1

00 NVQ4+NVQ3+NVQ2+NVQ1+

Source: NOMIS / ONS Copyright LaLFS / APS from 2005

WORK RELATED TRAINING Over recent years a larger proportion of employees and self employed people undertake recent job related training compared to the national average – although in the last two years the rate has fallen back to 22.9% of those employed in Rotherham, compared to 27.2% in Great Britain.

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56

Percentage of Employees & Self-employed Receiving Work Related Training in last 13 weeks

22

24

26

28

30

32

34

36

38

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

% GBRotherham

Source: NOMIS / ONS Copyright Local Labour Force Survey / APS

Although the proportion of working age people in Rotherham receiving job related training has increased in recent years (although having fallen back again) this may in part be the effect of increased numbers in employment as opposed to an increase in the availability of job related training. Fluctuations are to be expected due to the relatively small sample size of the survey at the local level, although the recent increases in service sector jobs will have been a likely influence (traditionally higher levels of training).

HIGHER EDUCATION 21 Recent years have seen a large increase in numbers entering higher education (HE) in Rotherham and the UK in general, the rate of increase however has been greater in Rotherham compared to the UK. In 1994/5, there were 4.3 entrants into HE per 1,000 population in Rotherham, compared to 7.5 regionally and 10.3 nationally. In 2007/8 there were 9.5 entrants into HE per 1,000 population in Rotherham, compared to 12.1 regionally and 14.5 nationally. However the number of entrants in Rotherham had remained more or less the same over period 2002/3 to 2004/5 but the last three years have seen the numbers rise again to around 2,400 per year. There has been a corresponding increase in the number of graduates from Rotherham and the UK in general. In 1994/5, there were 2.3 graduates from HE per 1,000 population in Rotherham, compared to 4.2 regionally and 6.0 nationally. In 2007/8 there were 6.1 graduates from HE per 1,000 population in Rotherham, compared to 7.4 regionally and 8.9 nationally. The numbers in Rotherham have remained fairly stable for the last 5 years compared to small rises in numbers regionally and nationally but 2007/08 has seen a significant rise.

21 Graduation figures refer to year of start of graduation year – starting a course leading to a qualification above level 3, i.e. GCE ‘A’ level or equivalent and above.

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Graduations from HE per 1,000 population 1995-2008

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1994

/95

1995

/96

1996

/97

1997

/98

1998

/99

1999

/2000

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

Rotherham

Yorks &HumberUK

Source: HESA

For both HE entrants and graduates, the rate of increase in numbers has been greater in Rotherham compared to regional and national figures though the difference is still significant and the gap has remained fairly stable over more recent years. Entrant figures in Rotherham rose from 42% of the UK level in 1994/5 to 66% in 2007/8, while graduate figures rose from 39% of the UK level in 1994 to almost 69% in 2007/8. It is important to note also that these data refer to the origin of the students, and it is likely that many of Rotherham’s graduates will not live in the Borough once graduating. The increase in both student and graduation numbers both national and locally is the result of changes to higher education policy, increasing the availability of higher education resulting in a much larger uptake. The greater increase in uptake in Rotherham compared to the national improvement is most likely the result of the increased availability of higher education as an option in an area of traditionally low uptake so increased availability would have a far greater effect. However in recent years the number of entrants to HE in Rotherham and in the number of graduates has remained very similar and there remains a significant challenge in reducing the gap to both the regional and national averages.

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LAND & PREMISES

The net total floor-space on Rotherham’s employment sites rose to over 2.82 million square metres22 in 2008. Between 2007 and 2008 it increased by 75,500 sq m. This accounts for almost 106,000 sq. m of newly constructed and 31,500 sq. m of demolitions (plus some minor floorspace revisions). This made 2008 the second highest year for floorspace construction since 2000, but less than in 2007 which was inflated due to the very large Next development (103,000 sq m). Between 1998 and 2008 there has been an increase of 696,000 sq. m. – i.e. 24.7% of the total floorspace has been constructed within the last 10 years. In contrast to recent years the new floorspace construction of 106,000 sq m was mainly due to activity in the Central area of the borough which had 55.6% of the total new floorspace - this was primarily due to building at Magna 34 Business Park and the Fusion@Magna / Ignite@Magna developments. The Southern area accounted for 35.9% of the total increase with significant development at Waverley and Waleswood. The Northern area accounted for 8.5% of the increase with development at Manvers Century and Farfield Business Parks.

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Sq m

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Floorspace constructed for Economic Development in Rotherham, 1993 - 2008

SouthernCentralNorthern

Source: RMBC

There were eight demolitions in 2008 totalling over 31,500 sq m. of floorspace – the three largest being the demolition of the former Laycast works at Swallownest (12,760 sq m), the former Archers Furnishings buildings at Brinsworth for housing (9,105 sq m) and the old Block B units at Aven Industrial Park (4,530 sq m). Following is the list of major floorspace developments in the borough in 2008 (sized over 1,000 sq m):

22 Net floorspace accounts for floorspace constructed and floorspace demolished.

ECONOMIC FLOORSPACE

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Industrial Area Name Address Details of Development Sq.m.Manvers - Century Business Pk Dearne Lane Phase 2 workshop units for Langtree 2,891Manvers - Farfield Park Farfield Park Extension / new units for Nat Floor Coverings (Paragon) 4,447Swinton Meadows Ind Estate Meadow Way Extension for Maple Leaf Bakery 1,039Former Enterprise Zone Area Greasbrough Rd Erection of 3 storey building - primary care centre & offices 5,346Eastwood Trading Estate Fitzwilliam Rd Erection of workshop for Hammerson UK Properties Ltd 1,381Eastwood Trading Estate Chesterton Court 3 units for B2/B8 classes for EV Waddington Ltd 2,100Templeborough Regen Area Sheffield Road Magna 34 - erection of 8 office blocks / 7 industrial units 22,113Templeborough Regen Area Magna Way Fusion@ Magna, RiDO business centre - offices/workshops 2,390Templeborough Regen Area Bessemer Way Ignite@Magna - 16 industrial units for Strategic Sites 8,849Templeborough Regen Area Bessemer Way Factory extension for Newburgh Engineering Ltd 3,312Templeborough Regen Area Steel Street Industrial buildings & offices for Technical Cranes Ltd 1,253Moorgate Crofts Alma Road Erection of 4 storey office building for Horbury Building Syst. 3,054Eastwood Trading Estate Fitzwilliam Rd Erection of workshop / cleaning area for Hammerson UK 1,381Zone 2 Sheffield Business Park Britannia Way Erection of 4 storey hotel for Aston Hotels 3,778Aven Industrial Park Tickhill Road Construction of new workshops (demolition of Block B) 3,433Swallownest Industrial Area Chesterfield Road3 buildings / 6 units for mixed use for JF Finnegan Ltd 5,116Waleswood Industrial Area Waleswood Way Erection of 6 industrial units for Langtree Group 8,888Waverley Regeneration Area Wallis Way Advanced manufacturing research building + 2 turbines 4,492Waverley Regeneration Area Brunel Way Erection of castings research & development workshop (CTI 3,680Waverley Regeneration Area High Field Spring Erection of 6 Buildings to form 14 units for Strategic Sites 9,682

Source: RMBC

The majority of new floorspace constructed in 2008 was for B2 general industrial uses (38%) with roughly equal amounts for B1 business uses (26%) and B8 storage & distribution uses (25%). The remainder was chiefly accounted for by the new Aston Hotel and the new PCT health centre / offices. In addition over 43,000 square metres of floorspace was under construction at the end of 2008 – this floorspace currently being constructed is mainly due to developments at Northfield (including new B&Q store), Templeborough (including Aesseal expansion), Manvers (including the erection of a four-storey new hotel), and continuing developments at Dinnington and Waverley. The floorspace vacancy rate has increased from last year but total occupied floorspace in Rotherham has also continued to rise. Most development in 2008 will have commenced well before the start of the recent economic downturn but this will no doubt begin to impact in 2009, on both vacancy rates and the future levels of construction.

Year

Total Floorspace (Sq m)

Floorspace Vacant (Sq m)

Floorspace Occupied (Sq m)

Vacancy Rate (%)

1998 2,126,526 166,967 1,959,559 7.91999 2,196,321 185,438 2,010,883 8.42000 2,320,851 300,897 2,019,954 13.02001 2,359,256 267,519 2,091,737 11.32002 2,399,785 235,121 2,163,707 9.82003 2,449,774 254,017 2,195,757 10.42004 2,483,462 247,307 2,236,155 10.02005 2,563,176 307,075 2,256,101 12.02006 2,598,762 348,452 2,250,310 13.42007 2,747,407 283,960 2,463,447 10.32008 2,822,897 313,340 2,509,577 11.1Change 98-08 696,371 146,373 550,018 3.3

Source: RMBC

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Despite the continuing large amounts of floorspace being constructed it appears that some areas / properties are less attractive to the market – possibly due to older premises and/or less desirable location. At the end of 2008 50% of vacant floorspace had been vacant for more than 2 years and a fifth had been vacant for more than 4 years (although this represents just 2.2% of the total floorspace).

Floorspace (sq.m.) by time vacant

Floorspace vacant 3 - 4 years, 32,489, 10%



Floorspace vacant less than 1 year,

147,646, 48%

Floorspace vacant more than 4 years,

62,530, 20%

Source: RMBC

In 2008 there was 14.94 hectares of land taken up for economic development (66% in the Southern area), less than the exceptionally high rates seen in 2005-07 but only slightly below the long-term average. The average annual rate of land developed for economic purposes over the past five years is 19.6 hectares. A further 12.25 hectares was under development at the end of 2008.

Uptake of Land for Economic Development, 1998-2008

0

5

10

15

20

25

30

35

40

45

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Hec

tare

s

SouthernCentralNorthern

Source: RMBC

ECONOMIC LAND UPTAKE

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ECONOMIC LAND AVAILABILITY

In 2008 there were 239.9 hectares of available undeveloped land in Rotherham identified for industrial or mixed use. Of this total, only 114.1 hectares (47%) could be promoted in the short term: - 22.7 hectares (9%) of this economic land bank was immediately available for economic

purposes - 91.3 hectares (38%) required infrastructure development, 72.5 hectares (30%) required reclamation and infrastructure development before it could be utilised for economic purposes – most of this being in private ownership. 53.3 hectares (22%) were committed to or retained by industry for future development.

Rotherham's Economic Land Bank 2008 (Total 239.9 ha)I. = 22%

II. = 9%

III. = 38%

IV. = 30%

I. Retained for Development 53.3 ha (22%)

II. Land on the Market/Suitable for Promotion 22.7 ha (9%)

III. Land Requiring Infrastructure Provision 91.3 ha (38%)

IV. Land Requiring Reclamation/Infrastructure - 72.5 ha (30%)

Source: RMBC The progress made in 2008 compared to 2007 is shown in the following table. The amount of land requiring reclamation fell by 7.9ha, the majority of which was due to the Henry Boot development on Rotherham Road, Parkgate – an increase in reclamation compared to the previous year.

ha % ha %Category I (Retained for Development) 55.8 22 53.3 22Category II (Land on the Market/Suitable for Promotion) 23.4 9 22.7 9Category III (Land Requiring Infrastructure Provision) 91.3 36 91.3 38Category IV (Land Requiring Reclamation/Infrastructure) 80.4 32 72.5 30Total (ha / %) 250.9 100 239.9 100

20082007Category

Source: RMBC

As a comparison, in 2003 there were 176.5 hectares of land that required reclamation in the borough.

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PERFORMANCE INDICATORS

Several service plans and strategies include the following Performance Indicators measuring the progress in terms of land improvements and floorspace construction. In 2008:

• 8.79 ha of land were ‘improved’ (move from Categories IV or III upwards) Eastwood – 0.70 ha Northfield – 6.57 ha Templeborough – 0.57 ha Waverley – 0.95 ha

• 7.84 ha of land were ‘reclaimed’ (move from Category IV upward) Eastwood – 0.70 ha was reclaimed, straight to ‘developed’ Northfield – 6.57 ha Templeborough – 0.57 ha

• 14.94 ha of land were ‘developed’ (move from any of the four categories of undeveloped land to Land Developed)

Century Business Park – 1.31 ha Eastwood – 0.70 ha Kilnhurst – 1.64 ha Moorgate Crofts – 0.76 ha (windfall site not previously measured) Sheffield Bus Park Zone 2 – 0.70 ha (windfall site not previously measured) Swallownest – 2.10 ha Waleswood – 2.88 ha Waverley – 4.85 ha

• 105,900 sq m of new floorspace was constructed (details in the floorspace section)

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APPENDICES

APPENDIX I INTERPRETING ECONOMIC DATA IN THIS REPORT - A WORD OF CAUTION There is no strict economic rule that dictates a ‘geography’s’23 score on one economic indicator, when compared to another indicator, particularly when smaller ‘geographies’ such as Local Authority Boroughs are used. A low unemployment rate often, though not always, correlates with high VAT unit concentration and high GDP per head. Reasons for non correlation are varied, though it is worth noting that GDP and VAT units are measured at the workspace, while unemployment is measured at the home. Geography such as Rotherham, located in close proximity to a major conurbation, Sheffield, will have its unemployment level affected by the economic climate in Sheffield. So falling unemployment in Rotherham may occur at the same time as GDP increase in Sheffield rather than Rotherham, as workers commute. London, with the highest GDP of all the UK Regions, has the highest unemployment rate of the government regions, with many of the GDP generating workforce commuting from outside the Capital. Care should be taken in using VAT stock increases and decreases as measures of economic prosperity. It is important to understand that many businesses, both manufacturing and service, will be VAT registered at a head office, often in another area, so these companies will only show on the VAT figures in the geography where the company is registered, not where the firm operates. Also, there is no way of differentiating between large and small companies, so an increase or decrease of 1 company employing 1 person has as much affect on figures as a factory employing 500 people opening or closing. The changes in VAT stocks are not simply due to the net change in total stock, but due to a complex pattern of registrations and de-registrations in different sectors. Each registration is not necessarily a new company formation, and each de-registration is not necessarily a company liquidation. New registrations can result from new company formation or from non-registered companies increasing turnover, which brings them above the VAT threshold. Similarly, de-registrations can be the result of company closure (or re-location) or the result of a fall in turnover pushing the company below the VAT threshold. Employment figures from the ONS Annual Business Enquiry (ABI) are only broad estimates of employment. The survey has replaced the Annual Employment Survey (AES), which had been producing increasingly anomalous results since 1995. The ABI has not been backdated to before 1995, though Experian Business Strategies supply data analysis on ONS data from 1986 to 2007, accounting for seasonality and methodology changes over time.

23 ‘Geography’ is a term used to describe an area defined by a given boundary, e.g. County, Region.

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APPENDIX II

Gross Value Added (GVA) Gross Value Added (GVA) measures the contribution to the economy of each individual producer, industry or sector in the United Kingdom. It is used in the estimation of Gross Domestic Product (GDP). GDP is a key indicator of the state of the whole economy. In the UK, three theoretical approaches are used to estimate GDP: 'production', 'income' and 'expenditure'. When using the production or income approaches, the contribution to the economy of each industry or sector is measured using GVA. - The production approach to estimating GDP looks at the contribution of each economic unit by estimating the value of an output (goods or services), less the value of inputs used in that output's production process. - The income approach to estimating GDP measures the incomes earned by individuals (e.g. wages) and corporations (e.g. profits) in the production of outputs (goods or services). - The expenditure approach to estimating GDP measures total expenditure on finished or final goods and services produced in the domestic economy. The link between GVA and GDP can be defined as GVA (at current basic prices; available by industry only) plus taxes on products (available at whole economy level only) less subsidies on products (available at whole economy level only) equals GDP (at current market prices; available at whole economy level only). Or, in summary: GVA + taxes on products - subsidies on products = GDP Differences between Eurostat GVA figures (NUTS3 areas) and Rotherham GVA figures obtained from Regional Econometric Model (REM - supplied by Experian): It is important to note that GVA estimates obtained from the REM will not agree with ONS/Eurostat data - the two main differences are that Experian use their Regional Planning Service data for counties within the UK rather than the exact Eurostat data itself, furthermore they adjust employment for the census in the REM and using this in conjunction with constant per worker productivity also contributes to alternative estimates of GVA.

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APPENDIX III Difference between Unemployment and Claimant Count Official estimates of unemployment are produced by ONS based upon the ILO (International Labour Organisation) definition. A separate series - the claimant count - measures how many unemployed people are claiming unemployment-related benefits. There is a large difference between the two series, and although they move broadly in line often one measure increases while the other falls. The reason for this is simply that they measure different things. Unemployment is a count of jobless people who want to work, are available to work, and are actively seeking employment. The ILO definition is used internationally, so comparisons between countries can be made, and it also allows for consistent comparisons over time. Unemployment is calculated using data from the Annual Population Survey (APS – formerly the Labour Force Survey), so it is subject to sampling differences. The claimant count measures only those people who are claiming unemployment-related benefits (Jobseeker's Allowance). It is always the lower measure because some unemployed people are not entitled to claim benefits, or choose not to do so. Benefits rules vary over time and between different countries, so it is more difficult to make comparisons. The claimant count comes from the administrative records of Jobcentre Plus and is available earlier than the APS-based unemployment data. When employment is high the gap between unemployment and the claimant count tends to widen, as some jobless people who were not previously looking for work start to do so. By actively looking for work they may become classified as unemployed under the ILO definition. However they do not feature in the claimant count unless they also begin to claim benefits. The difference between the two measures is wider for women than for men. Currently only around half of unemployed women claim unemployment-related benefits compared with around two thirds of men.

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Rotherham in Focus 2009