THE IMPACTS OF DEMOGRAPHIC CHANGE IN THE FUNCTIONAL ECONOMIES OF THE NORTH OF ENGLAND

1. Follow us @#N8launch THE IMPACTS OF DEMOGRAPHIC CHANGE IN THE FUNCTIONAL ECONOMIES OF THE NORTH OF ENGLAND Thursday 15 September Sheffield Town Hall

2. Follow us @#N8launch Professor Keith Burnett Vice Chancellor, University of Sheffield Chair, N8 Research Partnership

3. Follow us @#N8launch David Willetts MP Minister of State for Universities and Science Department for Business Innovation and Skills

4. Objectives and format Objectives • Launch of 5 main outputs of the programme of research • Highlight key research findings for local and national level • Opportunity for discussion of the implications of the work • locally • at the level of the North of England • nationally • Understand next steps to maximise opportunities and mitigate challenges Format • Presentation and Q&A with Research Team • Response from public and private sector – practical and policy context • Group discussions on next steps and response Follow us @#N8launch

5. The N8 Research Team • Professor Ray Hudson, Durham University: Academic Lead • Professor Philip Rees, University of Leeds • Professor Alan Harding, University of Manchester • Professor Tom Cannon, University of Liverpool • Dr Lisa Buckner, University of Leeds

6. Follow us @#N8launch Professor Ray Hudson Durham University

7. About this Research….. Key aims • Profiling of demographic change in northern functional economies • Focus on the economic implications • Economic and labour market change • Entrepreneurship, innovation and enterprise • Services and costs: housing, health and social care N8 Research Partnership • Multi-disciplinary team of Northern Universities • Sponsored by Northern Way Policy & Research Programme • Response to Northern Way City Regions Forum External Advisory Group • Four Government departments • Northern City Regions • Regional observatories • Independent experts Follow us @#N8launch

8. Context to the research….. Economic conditions • Austerity • Employment, unemployment • Constrained growth Demographic transitions • Ageing • Migration Policy directions and institutional change • Rebalancing • Big Society • Localism and Local Enterprise Partnerships

9. Some issues to note….. Data issues • GVA: best fit at EU NUTS2 scale • Population data reported at local authority and regional level • Different assumptions deliver different projections - two models reported in study with different assumptions – TRENDEF (official), UPTAPER (Leeds) LEP territories • Disconnect between LEP territories and data scales • Overlapping LEP boundaries in a number of areas means aggregation challenging

10. Overall findings on Northern demography….. Distinctive compared with national context Common aggregate trends across North • Population growth • Ageing • Diversity Spatial diversity in terms of scale and rate • Urban-Rural • Core-periphery Differential spatial impact of economic and demographic interactions

11. Overall population growth everywhere….. Moderate aggregate population growth projected (8-12% between 2001 and 2036) Different rates of change in different places

12. Ageing….. Aggregate ageing • Increased longevity • Declining fertility • Growth and higher birth-rates amongst immigrant and minority communities • Health care needs • Labour market contraction Table 1 Selected population statistics for Northern England, 2011-2036

13. Diverse prospects: population growth….. Table: Population change for LEPs, 2011-2036. Note: Populations are in 1000s. The time series starts at 2011 = 100. TRENDEF = projection aligned with the 2008-based National Population Projection. UPTAPER = projection with alternative model for emigration, which increases in line with the population

14. Diverse prospects: interaction of trends ….. Distinctive sub-national pictures: • Natural increase • Net migration • Population change 1990-2007 Illustrations • North East • Merseyside • North Yorkshire

15. Example: South Yorkshire - Components of Change 1990-2007

16. Findings on economic impacts….. • Diverse labour markets • The entrepreneurship challenge • Opportunities for innovation • Rethinking our infrastructure • Underpinning the Big Society

17. Diverse prospects for diverse economies: declining labour force.... Table: Projected labour force, 2011 and 2036 (defined as 18-60/65 Note: Populations are in 1000s. The time series starts at 2011 = 100. Constant labour force participation rates by age and sex applied from 2001

18. Rethinking our infrastructure: household numbers increasing…… Projected households, 2011 and 2036 Note: Households are in 1000s. The time series starts at 2011 = 100.

19. Opportunities Mobilising people • Maximising skills to retain labour market capacity • Growing entrepreneurship among the over 50s • Using social capital in ‘Big Society’ roles: mentoring, volunteering, intergenerational opportunities • Building social enterprises Investing in innovation • Northern innovation assets in response to demographic change • lifestyle, quality of life, assisted living   New market opportunities • Mobilising the wealth of over 50’s as consumers and investors • Improving homes for older and diverse populations: new and retrofitting • Range of emerging markets • personal services, care, tourism, support technologies, remote health monitoring systems, healthcare at home

20. Challenges Understanding the position in different areas • For LEP’s and stakeholders: understanding of a cross-cutting issue • For central government: distinctiveness of and within the North • Differing patterns: past and future patterns of economic and demographic change • Maintaining long term perspective on fiscal, social and economic consequences Immigration and labour supply • Growth in employment opportunities, but key capacity gaps – eg caring • Importance of immigration to compensate natural change Risks of increasing inequality • Ageing communities with sustained unemployment • Poorer health, low levels of pension related income and resources. Focusing on innovation in highly political context • Need for enhanced supply of health and social care services • Improving health to maximise economic participation

21. Resources from the N8: Five Reports…. • The Impacts of Demographic Change in the Functional Economies of the North of England: Summary Report R.Hudson (Durham) et al • Modelling Demographic Change in the Functional Economies of the North of England P.Rees (Leeds) et al • Understanding the Demand for Skills and Labour in the North of England A.Harding (Manchester) et al • Entrepreneurship and Enterprise implications of the North’s dynamic population T.Cannon (Liverpool), K.Kurowska (Newcastle) et al • The Impact of Demographic Change on the Infrastructure for Housing, Health and Social Care in the Functional Economies of the North of England L.Buckner (Leeds) et al http://www.n8research.org.uk/research-themes/demographic-change/

22. Follow us @#N8launch Professor Alan Harding University of Manchester

23. Findings Economic differentiation at different scales including: • North-South – growth of London super-region • Within the North - ‘new agglomeration’ favouring big metro areas • In functional economic areas driven by sectoral change, housing markets and skills • Differentiation is long-standing and comparatively extreme Demographic and economic trends interact – responding and re-inforcing • Roles of places in wider economic geographies • Shaping decisions – about business locations, enterprise zones, housing markets Policy context going with the grain of economic trends • Explicit spatial policies and programmes in decline – modestly favourable to North • Directions of implicit spatial programmes • redistributive favour North but less prominent given spending squeeze • place blind’ having imbalancing effects • Decentralisation/localism/incentivising development • favouring areas of market potential • tensions in areas affected by market, population and development trends • Co-ordination important

24. Examples – concentrating economic activity in NE and GM

25. Findings

26. Challenges Policy - clarity needed on: • How differentiation processes matter, for example the interaction between economic and demographic trends • How places within wider geographies can be shaped to address re-balancing aspirations at different scales • The role of explicit and implicit policy choices in shaping development Analytical • The ‘new agglomeration’ and the interactions between trends • How can policy influence the and the value of different policy choices • Economic forecasting: linear ‘return-to-trend’ analysis vs scenario planning • Demographic forecasting: revisiting migration assumptions? • Ageing: understanding how recent and future labour market trends will affect asset-richness and poorness of older age groups and their residential choices

27. Follow us @#N8launch Professor Tom Cannon University of Liverpool

28. The entrepreneurship challenge…. More entrepreneurship in older age across the UK North-South divergence in older age groups Some sectoral differences….

29. New demands in an ageing population

30. Access Opportunities for new/small businesses and existing/large businesses Opportunities for existing/larger firms predominate Opportunities for new/small businesses predominate

31. Follow us @#N8launch Dr Lisa Buckner University of Leeds

32. The impact of demographic change on the infrastructure for housing, health and social care in the functional economies of the North of England Results 2011-2036: Population grows, ages & becomes more diverse: acute change in rural areas Changing demands on housing stock across population groups Increase in people living alone Increases in the number of people living with long standing health conditions More people in care or needing support to undertake at least one self-care activity or domestic task Number of voluntary carers predicted to increase by just 2%

33. The impact of demographic change on the infrastructure for housing, health and social care in the functional economies of the North of England Implications: • Demand for care predicted to outstrip supply • Recognise the importance of carers as the main providers of social care. • Incentivise and enable caring to avoid ‘care gap’ by supporting carers • Develop alternative care arrangements and encourage flexible working arrangements to enable increasing people to combine paid work and care. • Opportunities for new solutions • Housing and accommodation for rapid growth of older people • Develop housing that can be adapted to enable older people to stay in their own homes and specialist housing for older people to live independently • Recognise demand for increasing numbers of residential/nursing care places. • Local areas affected to differing degrees and in different ways • Different solutions needed in different local conditions

34. Professor Phil Rees University of Leeds

35. Projection scenarios used TREND: the assumptions of the 2008-based National Population Projections are used and then factored to local areas using the most recent information (2006-2008), except that we use our own estimates of local immigration rather than those of ONS and assume that internal migration rates out of and into local authorities remain constant at 2006-08 levels. UPTAP-ER: the same assumptions as in the TREND projections but with a different model for emigration. Emigration is assumed to be a product of constant emigration rates (worked out from 2008 based NPP) multiplied by rising populations, so that emigration increases over time. As immigration is held constant, this means net immigration shrinks over time and the rate of increase of the population is lower than in the TREND projection. Which is right? Neither but they do indicate the range of possible outcomes. This range really needs to be converted into statements about the probability of future population outcomes. This has been done for some national populations but not successfully for local populations.

36. Relaxing the assumption of constant prevalence rates We assumed that prevalence rates by age, sex and ethnicity of Limiting long-term illness/no limiting long-term illness Good health/not good health Labour force participation Household representative and memberships would remain constant over time. Sanderson and Scherbov (2010, Science) have shown how much the picture for health status can change if you adopt a model of changing rates linked to mortality improvements. This assumption can be relaxed through use of time series of national surveys (Health Survey of England, Labour Force Survey/Annual Population Survey/Integrated Household Survey, ESRC’s Understanding Society Panel) and through use of relational methods linking localities to the national trend as developed by Alan Marshall, PDRF, Leeds. The outcomes would probably be more favourable than we currently project.

37. Resources from the N8: Our data source…. Spatially disaggregated demographic and socio-economic data collected and prepared for this research programme. To access these data and all the research reports http://www.n8research.org.uk/research-themes/demographic-change/

38. Follow us @#N8launch Question and Answer SessionChair: Keith Burnett

39. Follow us @#N8launch Professor Trevor McMillan Pro Vice Chancellor Research Chair, N8 PVC Group

40. Follow us @#N8launch Stephen Pegge Lloyds Banking Group

41. Paul Mooney Department for Work and Pensions

42. Workshop discussions • What are the key impacts and opportunities of demographic change in the Northern functional economies that LEPs, Local Government and business should focus on? • What can be done at a local level to respond to these impacts and opportunities, and how can central Government support these actions? • What issues do we need to understand better? Identify three key points or next steps to feed back to the Conference

43. Follow us @#N8launch Feedback sessionSimon Pringle Director, SQW

44. Follow us @#N8launch Policy Reflections Richard BakerResearch Questions Ray Hudson

45. Follow us @#N8launch Professor Trevor McMillan Pro Vice Chancellor Research Chair, N8 PVC Group