How Lancashire's health is affecting its wealth - and what the future could hold for the county's economy

Poor health and a productivity gap are two of the biggest threats to Lancashire’s prospects after the pandemic, according to a new report assessing the condition of the county’s economy.

Tuesday, 30th March 2021, 11:44 pm
Updated Wednesday, 31st March 2021, 12:17 pm

An audit of Lancashire’s financial fortunes has found that the health of the population is “weighing on” its economic potential and putting pressure on public services - challenges that could grow in the wake of Covid.

While the local economy was performing strongly in the six years before the virus struck, it had suffered four “lost years” of growth during a sluggish recovery from the 2008 economic crash.

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Rowena Burns chairs the panel leading Lancashire's Independent Economic Review

Lancashire also still lags behind the England average in the economic output per head of its population - and if that gap could be bridged, it would generate an extra £10bn for the county's current £34bn economy.

In spite of that shortfall, the report identified manufacturing as a key strength for the region - a sector that bounced back quickly from the financial crisis over a decade ago and has grown consistently since 2009.

In contrast to the usual narratives about the need to revitalise the manufacturing industry, it remains the biggest contributor to Lancashire’s economy - making up around a fifth of its output.

For Rowena Burns, chair of the panel leading the economic review, the county’s manufacturing prowess is not only a positive in itself, but can provide a platform to tackle the twin challenges posed by health inequality and below-par productivity in the wider economy.

Gross Value Added per hour across different parts of Lancashire (image: Productivity Institute/Lancashire Independent Economic Review)

“[As] a unique selling point, [manufacturing] allows us to maintain our heritage and build upon it to tackle today's problems and realise today’s opportunities.

“We have got to drive innovation into health and support people living in better housing, with the facilities they need as they grow older.

“The answers have got to be about maintaining health in old age and linking up that imperative with the manufacturing strength this county has, which is fundamental to Lancashire’s history.

“We need to rethink how care services are provided and start to make a virtue out of necessity.

“Poor health is also a risk to economic productivity and economic vitality per se and I think Covid will have exacerbated that,” says Ms. Burns.

Also the current chair of Health Innovation Manchester, she recognises that it is sometimes difficult to prioritise long-term investment in tackling the root causes of poor health because of the need to fight the “burning fires” of the present.

However, the statistics set out in the economic audit demonstrate the scale of the challenge Lancashire faces if it is to improve the physical health of its people - and so, too, the health of its economy.

The document stresses the importance of investing in "social infrastructure", as well physical - and it reveals that, taken as a whole, Lancashire is not ranked in either of the top two categories on a set of “life cycle” measures such as childhood obesity, levels of deprivation, healthy life expectancy and other areas such as income and skills.

It is also in the bottom half of the health index produced by the Office for National Statistics, with Blackpool at the very bottom. The document singles out the town, stating that its health indicators "reinforce the reality of very poor health outcomes" in the resort.

More than a quarter of Lancashire's neighbourhoods fall into the 10 percent most deprived nationally.

Rowena Burns says that the approach to health needs to change before the poor outcomes ever will - and advocates more “holistic” services where community hubs become destinations for multiple reasons.

“We need to see health as something that starts at home and can be supported through things that happen in schools and nurseries.

“Some of the digital technologies enable services to be joined up so that [they] can be contained in a common record - and any health professional that is working with a family can access information, with their permission, about their housing and employment position.”

Meanwhile, in spite of improvements in productivity in Lancashire in recent years, the county is still forecast to see the gap with the rest of the UK widen significantly over the next 30 years on current trends.

The report describes Lancashire as a “mid-ranking performer” in terms of productivity - although it is slightly ahead of its North West neighbour Greater Manchester and only slightly behind Merseyside.

The audit highlights the reason for the productivity gap as being the output created within individual sectors rather than as a result of an economy skewed towards less productive sectors.

It also reveals that the retail and wholesale sectors are the largest employers in the county - with the former being particularly vulnerable to the impact of Covid.

Rownea Burns says that “the balance” within the county's economy is a worry - as is a skills deficit.

“Part of the problem coming out of 2008 was a lack of agility in learning new skills.

“I think a measure of success is making sure that you're [operating] in the bits of the economy that are generating high-skilled jobs.

“[There is] a contribution to overall economic vitality by having those high-skilled people in the workforce - with their higher disposable income and the power they have to raise educational standards [by] making sure you are equipping people to compete for those jobs and to continue the growth cycle.

“We need to work out where the growth points are going to be for manufacturing and work with further and higher education institutions to ensure we have got the courses and retraining facilities available to allow Lancashire to adapt to a world in which manufacturing is changing all the time.

“We need to treat education as a lifelong thing.”

The audit notes that Lancashire is well-placed to be an innovator, by virtue of its four universities and “leading private research and development assets in areas such as aerospace, cleantech, nuclear, and cyber”. It suggests that the county has the potential to “go big” by investing in carbon-cutting industries.

However, Lancashire sits in the bottom half of the research and development league table and Rowena Burns says that industries in which there is a “relative lack” of investment in that regard need to learn from those sectors that are renowned for it, like the aerospace industry.

The report also alights upon some of Lancashire’s flawed physical infrastructure, highlighting the fact that the prevailing distribution of the county's population along an east-west axis is at odds with its best rail links, which run north to south.

More than half of the county's residents can be found within two miles of the railway running from Blackpool to Colne, the document states - and yet while Lancaster is more than twice as far from Preston in a northerly direction as Blackburn is easterly, it is Lancaster that is more quickly reached by train.

The report is just the first phase of the wider economic review process and the panel is now inviting businesses, organisations and individuals to submit their own evidence and thoughts based on the issues that have been raised.

So is the woman overseeing the exercise hopeful about the future of the county’s economy having taken its current temperature?

“My personal view is that if the leadership of this county can continue to work together as they are at the moment, then I’d be very optimistic about what Lancashire can achieve,” Ms. Burns says.

She hopes that as a county of contrasts, Lancashire can nevertheless find “common cause” about what it needs to do to put itself on a sound economic footing.

And while she awaits with interest the views from the forthcoming call for evidence, she has some overarching advice of her own for the county: know your strengths and weaknesses.

“We need to turn challenge into opportunity. You can promote what you do until the cows come home, but having a clear-eyed understanding of the threats you face and how well or poorly you are equipped to deal with them - that should be the starting point.

“Facing into that doesn’t make you weaker, it makes you stronger. If you believe your own rhetoric, you'll never get anywhere."

LANCASHIRE ECONOMY IN NUMBERS

£34.1bn - annual value of Lancashire economy

£6.5bn - value of manufacturing to Lancashire economy. its largest sector by gross value added

£10bn - the county's "productivity gap" to the England average, based on output per head

40,000 - the number of jobs in each of the retail assistant and caring personal services categories - the two largest occupation groups in Lancashire

668,000 - total number of Lancashire jobs

53,000 - total number of Lancashire businesses

Source: Lancashire Independent Economic Review and Office for National Statistics