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North East missing out on UK jobs boom, report suggests

The North East has lost out in the UK’s jobs miracle, getting just 1% of new posts created, a report suggests.

The study by the IPPR North think tank has called on the Government to do more to match its rhetoric on ‘levelling up’ areas of the country outside London.

The report found that almost half (47%) of the increase in jobs in the last decade was in London and the South East, despite being home to just a third of people in England.

By contrast, only 1% of new jobs were in the North East, which has 5% of England’s population.

The study has come just a few days after figures from the Office for National Statistics showed that unemployment in the region for the three months to December stood at 6.1%, a slight fall from the previous month, but well above the national average of 3.8%.

At the time, North East business leaders called for action to tackle the region’s unemployment gap with the rest of the country, and now IPPR North has said that the Government must open the door to more devolution across England to level up the country.

Greater powers should be given to mayors and local leaders, the research suggests, and areas that already have devolution – such as the North of Tyne and the Tees Valley – should be permitted to take on more. The Local Government Association also urged the Government to publish its promised devolution white paper “as soon as possible”.

England has the worst regional inequalities in the developed world and the think tank’s proposals to bridge the gaps include giving additional power to mayors and local leaders over issues such as schools commissioning, job centres and some taxes. It also wants to set up a “new geography of regional collaboration” with four regions, the North, Midlands, South East and South West, led by council leaders and mayors.

The report suggests that Germany, which spends twice as much on supporting local economies as a percentage of GDP, is “better placed to support economic prosperity”.

Senior research fellow at IPPR North Luke Raikes said: “For too long, Westminster has hoarded power and held back prosperity in all of England’s regions, including London.

“Levelling up should mean opening the door for all of England to benefit from devolution, and letting areas that have devolution take on more.

“This parliament must be the devolution parliament. It is time to overturn the centralisation that’s let towns, cities and regions fall into decline.

“The Government must give places the power and resources they need to adapt to the decades of change that lie ahead.”

Sir Richard Leese, chair of the Local Government Association’s City Regions Board, said: “There is clear and significant evidence that the UK gets better value for money when decisions over investment and how to run local services are taken closer to communities and businesses.

“As this report shows, with the right powers and funding, devolution can lay the foundations for a more inclusive and prosperous economy across the whole of England.

“Democratically elected councils are best-placed to support the Government in seizing the opportunities for growth in the years ahead.”

A Government spokesman said: “The Government has been absolutely clear that it will unleash the potential of the whole country and deliver opportunity across the UK.

“The number of people in work across the North has increased by over 600,000 since 2010, with employment levels growing and unemployment falling in every region. Proposals for a new era of devolution will be at the heart of our commitment to level up all regions across England.”

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