Power Up infrastructure and collaboration to unlock region’s productivity

Harnessing productivity through skills holds the key for regional growth, according to Deloitte’s latest Power Up report – ‘Unlocking Productivity across UK Regions and Nations’.

Consulting more than 50 business leaders, educators, local government officials and influencers from across the UK, the report takes a unique look at over 20 years of ONS (Office of National Statistics) data along with insight from regional leaders to help better understand and assess how potential productivity and growth areas across the UK and the East Midlands could be unlocked.

Although there were clear themes emerging from each region, private and public figures consulted from across the East Midlands cited skills, infrastructure improvements and more cross-border collaboration between the region’s local enterprise partnerships, business and educators as key to improving the region’s productivity.

For five of 13 sectors analysed by Deloitte, the East Midlands has seen productivity growth outperform national averages since 1997 providing optimism, with three performing particularly well – public administration, construction and information and technology. Manufacturing still accounts for almost 17% of output compared to the UK’s 10%¹.

However, the East Midlands needs to make sure it keeps making its voice heard if it is to succeed in winning investment in rail, road and digital connectivity.

Alistair Pritchard, Nottingham’s office senior partner at Deloitte, says: “Analysing twenty years of data provides a unique insight as to how the East Midlands has fared over that period, but it’s clear there is still some work to be done.

“The region has an expansive geography which to some degree has impacted both productivity and growth. Despite being well positioned at the centre of the UK and close to a good road network, the East-West transport links need to be improved.

“Each area of the region has its strengths, however, the message from both private and public sector figures we interviewed was clear. We need to invest in skills and address labour shortages and this can only be done through greater collaboration between business, schools, colleges, universities and local government.

“Whilst data provides the information and need, data alone cannot solve how we improve productivity, but by analysing the past and speaking to key influencers in the present we can assess strengths and weaknesses, and pinpoint how we can potentially unlock the region’s potential,” says Pritchard.

The report suggests weak productivity is a particularly acute problem for the UK, when compared to other developed economies as Pauline Biddle, managing partner for UK regions at Deloitte, explains: “The slowdown in productivity growth has had a tangible effect. Analysing data by industry, we looked at the best regional performer for each sector. If this performance was replicated across the UK as a whole, this would be worth an additional £263bn to the economy, or nearly £10,000 for every UK household.”

“However, our UK regions have huge opportunity for growth and there is an overwhelming sense of regional pride and commitment that comes from the interviewees.

“Regional businesses need a devolution framework and for deals to work effectively. We need to plan and execute place-based strategies and work with recently appointed metro mayors in our city regions, but making sure that other areas do not lose out unfairly in spending and investment allocations,” says Biddle.

End

Note to editors

About the Power Up report
The report consulted and interviewed more than 50 business leaders, educators, local government officials and other influential figures in Scotland, Wales, Northern Ireland and the eight English regions outside London. The report describes each UK region and nation’s economic performance. It investigates strengths and weaknesses and outlines a series of proposed actions, deriving from discussions with senior business leaders that can help to raise the contribution of many regions to a new level.

The regions and nations are:

• East of England;
• East Midlands;
• North East;
• North West;
• Northern Ireland;
• Scotland;
• South East;
• South West;
• West Midlands;
• Yorkshire and Humber; and
• Wales.

About the Power Up data
The 15 sectors analysed:

• Agriculture, mining, and utilities;
• Manufacturing;
• Construction;
• Wholesale and retail trade;
• Transport and storage;
• Accommodation and food service;
• Information and communication;
• Financial and insurance activities;
• Professional, scientific and technical activities;
• Administrative and support services;
• Public administration;
• Education;
• Human health and social work; 
• Arts, entertainment and recreation; and 
• Other service activities.

All data is sourced from the Office for National Statistics (ONS), some publicly available, others under license agreement.

The employment numbers are from 1982 to 2017. The productivity (as measured by gross value added per hour worked) numbers are from 1997 to 2015 across 15 industries and all regions. The change in productivity is analysed across three different time frames – pre-crisis (1997-2007), post-crisis (2007-2015) and overall (1997-2015).

About the East Midlands region/nation:
Interviews were conducted with:

• Carolyn Fairbairn, CBI Director-General 
• David Noon, Global Brexit Lead, Deloitte
• Ian Stewart, Deloitte Chief UK Economist 
• Sir Howard Bernstein, Strategic Business Adviser to Deloitte
• Angus Knowles-Cutler, UK Vice Chairman Deloitte
• Pauline Biddle, Managing Partner for UK regions Deloitte
• Plus regional interviews with the regional CBI, Chamber of Commerce, Nottingham Trent University and a selection of regional businesses

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk.

Member of Deloitte Touche Tohmatsu Limited

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¹ ONS, Regional gross value added (balanced), UK: 1998-2016