Red Alert for Belfast

The think tank Centre for Cities has placed Liverpool, Belfast and Hull on “red alert” status in a review by Oxford Economics of the social, economic and environmental strengths and weaknesses of 64 cities in the UK. The Centre is a think tank backed by the Local Government Association, an umbrella lobby body for councils. Belfast’s is one of the “core cities “ studies. The main message i is that the recession is wiping out many of the gains of the past ten years and widening the North-South divide in GB again – although it’s not a straightforward picture. London suffered a stunning blow to its much vaunted financial services last year and is heading back to 1998 jobless levels. Belfast is not quite at the bottom of low performance tables, e.g.:

Social deprivation index

59 Belfast
60 Birmingham
61 Sunderland
62 Blackburn
63 Hull
64 Liverpool

But it will come as no surprise that the Belfast urban area is judged vulnerable because of the dominance of its domestic services sector and the stubbornly high level of long term unemployment Incidentally, Belfast’s population is listed as 647,000 which takes in more than the greater urban area. Population growth is among the lowest in the UK. Rating Belfast in surveys like this is valuable because it places the city in an broader economic and social context rather than relegating it to an eminently forgettable post Troubles corner. The message cannot be over-stressed: with public spending due to contract sharply in a couple of years, the days of the peace dividend are drawing rapidly to a close. Belfast section of the report

Belfast – tackling worklessness through the recession?

Belfast has seen rapid change in the past decade, with unemployment falling to around 4% in 2007 from over 9% a decade earlier as the city has matched political progress with greater economic dynamism. The traditional industries around which the city grew, like shipbuilding and textiles, have all but disappeared. Belfast – the economic driver for Northern Ireland – is now largely a service-based economy. A recent surprise growth sector has been hotels and tourism, and the city has started looking to grow a financial services sector. Over the years, Belfast has benefited from a strong public sector presence – accounting for around 40% of jobs. But the economic transformation is far from complete – the working age employment rate in Belfast City is only 65.5%, with more than one fifth of those registered as unemployed out of work for more than a year .

Belfast’s economic progress means that the city enters the recession from a stronger position than previous downturns. And despite fiscal constraints on future public spending, there is still backing for key regeneration projects. In November 2008 the Northern Ireland Government
confirmed backing for the Titanic Quarter in East Belfast – expected to create up to 600 jobs in construction and 200 in tourism when finished.

The city will inevitably be affected by contractions in both the UK and Irish economies. Based on a scenario of a 2% drop in GDP, Oxford Economics forecasts a fall in employment in the city of 5,000 over 2008-09 – or 2.4% of total employment. Most importantly, this increase in jobless will come on
top of existing concentrated pockets of high levels of worklessness – a legacy from decades of industrial decline. Given the extent of worklessness in Belfast, responding to rising unemployment during the recession must not take attention away from this longer-term constraint on the city’s success.

This sounds like a warning not to place too much reliance on prestige projects like Titanic Quarter.