Agenda item

Director: Liz Hunter. Author: Sarah Bowes

The Committee considered a report of the Director of Strategy, Communications and Policing which provided an update on the latest economic and business intelligence.

The Chair introduced this item. The Director of Strategy, Communications and Policing then presented the report to the Committee. The report provided the latest economic and business intelligence with West Yorkshire, the Combined Authority’s responses to the crisis, and outlined the resulting key asks of the Government.

The Director of Strategy, Communications and Policing highlighted to the Committee several macroeconomic issues that are affecting West Yorkshire and are outlined in the report:

·       CPI inflation rose by 9.9% in the 12 months to August 2022, down from 10.1% in the year to July.

·       Producer input prices continued to rise by more than producer output prices through August 2022.

·       The Bank of England’s Monetary Policy Committee met on 22 September 2022 and voted to increase the Bank Rate by 0.5% to 2.25%.

·       On 28 September 2022, the Bank of England announced emergency measures to intervene in the gilt market following sterling’s all-time low performance against the US dollar after the announcement of the Government’s Growth Plan 2022.

The Combined Authority’s regional data also shows the following:

·       Fuel poverty in West Yorkshire was greater than the national average prior to the pandemic. Current estimates suggest that as many as 300,000 West Yorkshire households could be in fuel poverty by 1 October 2022.

·       Four out of the five West Yorkshire districts have a higher share of food insecurity than the national average.

·       Around 30% of households within West Yorkshire spend close to all their income on essential goods and services. The cost-of-living crisis is expected to impact women and ethnic minorities disproportionately. The Combined Authority is undertaking a number of measures to mitigate this by focusing on inclusive growth initiatives.

·       Around 105,000 people in West Yorkshire use pre-payment meters, so they will pay more than the energy price cap.

·       Employment levels in West Yorkshire continue to increase, although wages are not keeping pace with inflation.

·       West Yorkshire has a particularly high number of energy intensive manufacturing firms, which could be impacted by rising prices, especially those operating within internationally competitive markets.

The Combined Authority is undertaking regional activity to support the issues faced above and is focused on offering immediate relief to stop more people falling into crisis in the future and additional measures aim to address medium and long-term challenges. These include:

·       Progressing at pace the West Yorkshire Mayor’s Cost of Living Emergency Fund

·       Progressing the new Business Sustainability Program which has been designed to provide a more holistic package of support to a wider range of businesses.

·       Implementing the Bus Service Improvement Plan, including the “Mayor’s Fares” scheme to reduce the daily cap on the MCard ticket to £4.50 from £5.50 and setting the maximum single day fare to £2.

·       Offering additional support to businesses such as the Combined Authority’s new Innovative Entrepreneurs Programme, Mayoral Innovation Prize, Made Smarter and the new Business Productivity Programme.

·       The Combined Authority is also continuing to ask the Government to provide additional support to vulnerable households in West Yorkshire, further help to businesses, increased commitment to a netzero transition and further devolution of the Adult Education Budget (AEB).

Members made the following observations:

·       Manufacturing businesses are facing increasing competition due to rising energy prices. Average energy costs for West Yorkshire businesses are around 34p per kilowatt whereas energy costs in some other countries are considerably lower. The increasing cost of components is also continuing to impact businesses.

·       It is vital to see continued support from central government for further capital investment. At present, the Capital Investment Programme is scheduled to end next March.

·       It is important that support for vulnerable households is properly targeted with a new definition of who is classified as vulnerable. For example, it appears that some organisations are losing business to people who only wish to pay via cash. As for working practices, there appears to be a tension between people wanting to come into offices to help save on energy costs and those who cannot afford the transport costs so have to work from home. Any further support needs to reflect these challenges.

·       The Combined Authority needs to continue to affirm support for devolution as some government Ministers continue to be critical of devolution and its impact.

Resolved:

      i.         That the Committee noted the latest intelligence around the West Yorkshire economy and the current proposed activity taking place locally and nationally and;

     ii.         That the Committee approved the proposal enabling the MCA to develop a fund to support the Voluntary, Community, and Social Enterprise sector to help people through the cost-of-living crisis, with a view to receiving further approvals at a future meeting