City Deal could potentially bring over 7,000 jobs to North West region

The Derry & Strabane City Deal could potentially bring 7,200 jobs by 2032 with health and ICT identified as key drivers, but it is expected that over 1,000 jobs will be lost in the retail and manufacturing sectors over the next decade.

By Gillian Anderson
Friday, 9th July 2021, 3:11 pm

In a presentation to the Governance and Strategic Planning Committee giving an overview of the council area’s economic performance, Dr Eoin Magennis, from Ulster University’s Economic Policy Centre,  aid that City Deal investment could help to combat rising unemployment levels in the city but having bespoke employability supports in place would be crucial.

Dr Magennis’ presentation showed that around 1,700 jobs could go in retail (around 900) and manufacturing (800) between 2020 and 2030.

“Retail is a critical sector in all local economies and in this council area it is around 16% of total employment,” he said.  “We go through phases where shopping centres are popular then fall out of popularity, it seems to be harder at the moment for older shopping centres to continue to renew themselves.

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Dr Eoin Magennis

“We have seen over the last 10 years, that our town centres are changing in terms of the offering and the shift towards cafes operating alongside retail.

“Town centre management issues seem to be key, around advertising opening hours and consistency around opening hours, the streetscape keeping that as pleasant and welcoming as possible. Perhaps we can see ourselves reinventing recreational centres of which retail forms one part.” 

Councillors were told that a projected £240m could be generated for the local economy as a result of the City Deal and that higher wages and economic output will be the product of innovation projects such as THRIVE, CIDRA and Smart/Future Cities.

Under City Deal there would be a strong boost to employment growth with more than 7,200 jobs created by 2032 with 70% of those jobs filled by residents with commuters and migrants filling the other 30%.

Skyline, Derry.

Dr Magennis said: “The City Deal does promise that transformation in the local economy as it recovers from Covid. 

“One of the things that is critical to the City Deal is the fact that the Inclusive Future Fund has a lot of the employability measures and that on its own ought to allow jobs to come along and other jobs associated with the general growth to be accessible across all parts of the community.

“Additional growth will be strongest in jobs requiring Level 4 qualifications or higher. You’re looking at a foundation degree, modern apprenticeship and upwards so the employability supports under the Inclusive Future Fund will be critical to bring people up to those levels and that speed.”

The Economic Inactivity rate (out of work and not looking for a job) has shown that despite the figure having fallen from 36.8% in 2009 to 31.2% in 2020, it is still above the NI average of 26.9% and well above the UK average of 20.8%. Around 30% of 16-64 year olds are in this category with a sharp rise in 2020 amongst students.

The total employment in Derry City & Strabane has increased from 59,000 in 2001 to 69,000 in 2020 – a 17.3% increase, accounting for 7.7% of total jobs in Northern Ireland for 2020.

Bespoke skills agenda is crucial - Colr. Duffy

Sinn Féin Councillor Sandra Duffy said she and her party believe that the skills agenda is going to be key going forward for employment in the City and District, both in recovery from the pandemic and also with the City Deal.

The Ballyarnett Councillor said: “It’s crucial to make sure those who have lost jobs are reskilled and able to re-enter the labour market.”

Councillors were told at the meeting that additional growth will be strongest in jobs requiring Level 4 qualifications or higher.

Councillor Duffy added: “There should be a bespoke approach around it by extending it to those who are furthest from the labour market, ensuring they are upskilled as well to benefit from any jobs that come out of the City Deal and Inclusive Growth Fund.

“We have talked before about including skills-based programmes similar to what we had through the Community Work programme that came out of the Executive Office. 

“That was a really good skills programme that got down into the communities and was able to skill up people and get them into employment. People that had been unemployed for a significant length of time. It needs to be at that level as well.”

Dr Magennis agreed with Councillor Duffy that a bespoke approach is required adding that upskilling at work would also be crucial.

The economist said: “We have a range of employability supports that we are going to need depending on how far away from the labour market participation people are.

“Very different employability supports are required for people with illness or disability than perhaps with others who have recently lost their job and have spent 10 or 20 years in the labour market. 

“We will also need, as time goes on, to continue to upskill people who are in work.  I think it is going to be critical as the economy continues to change.”

‘We want more jobs and better jobs’ - Colr. Farrell

SDLP Councillor Rory Farrell said: “There’s a lot to welcome in the report but there are also some concerning statistics.

“We have the highest claimant count in the north and the second highest rate of economic inactivity. We are in the bottom half when it comes to wages and we are in the bottom scale in terms of people whose wage is below the living wage.

“I think everybody can agree we want more jobs and better jobs and we are confident with full implementation of the City Deal projects and the Strategic Growth Plan that we will see more jobs but we need a policy shift from the Department for Economy.

“Our council’s position is that we need to see strict targets for Invest NI in terms of foreign and direct investment and job creation.

“We’ve written to the Minister for Economy requesting a dedicated North West Economic Policy and the feedback from the Department that we got was that this is being transferred to the Executive Office so there seems to be an element of pass the parcel when it comes to engaging with the north west. 

“It would be remiss of me not to mention the appointment of Mr Gordon Lyons as the Economy Minister, it will be interesting to see if, under Minister Lyons’ tenure, whether Belfast continues to get the lion’s share of funding and opportunity or whether there is going to be a change of direction and approach.”

working from home - Need for more Grade A offices?

Colr. Duffy also questioned whether the ‘working from home ethos’ which has developed over the past 18 months would affect the need for quality Grade A office space in the City and District.

Prior to the Covid pandemic, it was hoped that the building of Grade A office space would help aid the economic regeneration of Derry and the wider north west. However, with many staff still working from home and a more ‘flexible approach’ adopted by some employers, could the development of this top-notch office space now be at risk?

Dr Magennis however gave some reassurance:

“At one stage back in the autumn we were kind of thinking this was going to be the death of the Grade A office and perhaps even city centres to some extent,” he said. “I think that has possibly been overdone and we have moved away slightly to a large degree from that. 

“A lot of the surveys with employers would suspect that the press will be for a hybrid model where people are in the office maybe two, three or four days a week and working from home less than that.

“The Grade A question will continue because you will get companies wanting the most up-to-date space available to them.

“I think the Grade A office space will be ok, it’ll be tricky for those that are maybe 20/25 years old and trying to upgrade, so it might be the older space that will have more redevelopment.“

By Gillian Anderson

Local Democracy Reporter