Focus on economic inactivity and unemployment

Summary

Blackburn with Darwen has one of the highest levels of economic inactivity of the local authorities in the Lancashire LEP area, 30.3% of people aged 16 to 64; which equates to around 27,500 economically inactive people in this age range. The level of economic inactivity in Blackburn with Darwen is consistent, having remained at or around this level for at least the last ten years.

Economic inactivity levels for both males and females are above the regional and national averages. Over time, the proportion of economically inactive people in the borough who are students has increased, whilst the proportion of residents who are economically inactive due to long term sickness is decreasing.

Unlike the North West trends in the proportion of mixed and workless households, the borough has seen a distinct trend of increasing proportions of mixed households and decreasing proportions of workless households. The proportion of workless households in the borough is on a par with the regional figures. The borough has a higher proportion of mixed households than regionally.

At 5.8% the unemployment rate in the borough is above regional (4.4%) and national (4.3%) levels and is the highest of the local authority areas in Lancashire.

An estimated, 4,641 people age 16 and over are claiming unemployment benefits, equating to 5.0% of the population aged 16 to 64. The rate for the borough is above the North West (3.6%) and England (2.9%) averages.

Main categories of economic activity and inactivity

Source: Annual Population Survey / Labour Force Survey

A diagram of the main categories of economically activity and inactivity is presented adjacently (some smaller categories have been excluded for ease of presentation). Detailed figures allowing comparisons to be made between areas can be found in the sections of the report below. (Data for April 2017 to March 2018).

Alternative claimant count for lower super output areas with wards
Alternative claimant count for lower super output areas with wards

Economic inactivity

Source: Annual Population Survey/Labour Force Survey

People classified as economically inactive are those people who are out of the labour market. This group includes those who are long term sick, retired, students not working and those looking after home and family. Economically inactive people do not include the unemployed; these people are classified as economically active, as they are looking for work.

It is worth noting that even though people are classified as economically inactive, they can still provide a significant contribution to the economy. ONS data suggests that in 2016 , the value of the UK's unpaid household service work (such as unpaid adult and childcare, clothing, laundry, volunteering etc) was estimated at £1.24 trillion – larger in size than the UK's non-financial corporation sector; the overall unpaid household service work was equivalent to 63.1% of gross domestic product (Source: Household Satellite Account, UK 2015 and 2016).

Blackburn with Darwen has one of the highest levels of economic inactivity of the local authorities in the Lancashire LEP area, 30.3% of people aged 16 to 64; which equates to around 27,500 economically inactive people in this age range. The level of economic inactivity in Blackburn with Darwen is consistent, having remained at or around this level for at least the last ten years.

Other areas with high rates of economic inactivity include West Lancashire (33.7%) and Pendle (28.3%). Chorley (9.6%); South Ribble (11.8%); Rossendale (17.1%) and Burnley (18.2%) have some of the lowest rates. Please be aware that the confidence intervals on the data for some local authorities are quite large, meaning the figures are less reliable. These have been presented on the graphs below.

Proportion of economically inactive residents aged 16 to 64, April 2017 to March 2018 (showing confidence intervals)
Proportion of economically inactive residents aged 16 to 64, April 2017 to March 2018 (showing confidence intervals)

Economic inactivity levels for both males and females are above the regional and national averages. Within the borough 36.5% of females of working age are economically inactive, compared to 27.9% in the North West and 26.3% in England.

Compared to regional and national averages the borough has a greater proportion of economically inactive females aged 16 to 64 due to looking after home / family (42.9%, around 7,100 people). There are a similar proportion of female students to regionally and nationally (20.4%, around 3,400 people).

Main reasons for economic inactivity, females aged 16 to 64, April 2017 to March 2018
Main reasons for economic inactivity, females aged 16 to 64, April 2017 to March 2018
Main reasons for economic inactivity, males aged 16 to 64, April 2017 to March 2018
Main reasons for economic inactivity, males aged 16 to 64, April 2017 to March 2018

Economic inactivity levels for males in the borough stands at 24.1%, above the North West 18.4% and England (16.4%) figures.

Compared to regional and national averages the borough has a greater proportion of male students (38.6%, in the region of 10,900).

Reasons for economic inactivity, all people aged 16 to 64
Reasons for economic inactivity, all people aged 16 to 64

Over time, the proportion of economically inactive people in the borough who are students has increased, whilst the proportion of residents who are economically inactive due to long term sickness is decreasing.

Economic inactivity by age in Blackburn with Darwen and North West, April 2017 to March 2018
Economic inactivity by age in Blackburn with Darwen and North West, April 2017 to March 2018

The reason for economic inactivity is reflected in data that presents economic inactivity by age. For Blackburn with Darwen, data suggests that in both males and females the proportion of 16 to 19 year olds as inactive students is greater than the North West. Whilst for males, economic inactivity is on a par with figures for the North West until the 50-64 age range when inactivity rates in the borough increase.

For females however, levels of economic inactivity in the 20-24 age range appear lower in the borough than the North West comparator, for all age ranges after that economic inactivity levels are above the regional average.

Economic inactivity by age and sex (males) in Blackburn with Darwen and North West, April 2017 to March 2018
Economic inactivity by age in Blackburn with Darwen and North West, April 2017 to March 2018
Economic inactivity by age and sex (females) in Blackburn with Darwen and North West
Economic inactivity by age and sex (females) in Blackburn with Darwen and North West

*Please note confidence intervals for this data are in the region of +/- 10% for Blackburn with Darwen in the younger age ranges for both males and females, and some estimates are unreliable. For further information visit www.nomisweb.co.uk

Workless households

Source: Annual Population Survey – Households by combined economic activity status

Although there has been some fluctuation in the proportion of working households in the borough, the trend since 2007 has been for a relatively stable proportion of working households. The proportion of working households in the North West has also remained relatively stable, although at a higher level than the borough.

Unlike the North West trends in the proportion of mixed and workless households, the borough has seen a distinct trend of increasing proportions of mixed households and decreasing proportions of workless households. The proportion of workless households in the borough is on a par with the regional figures. The borough has a higher proportion of mixed households than regionally.

Of the mixed households in the borough, the greatest proportion (87.6%, around 13,400 households) are households which combine employed and inactive residents. Of the estimated 8,100 workless households around 79.0% or 6,400 households are those where all of working age are economically inactive.

Combined economic activity status of households in Blackburn with Darwen and the North West, January to December 2017
Combined economic activity status of households in Blackburn with Darwen and the North West, January to December 2017
Combined economic activity status of households in Blackburn with Darwen and the North West, January to December 2017
Working households Mixed households Workless households Total number of households
Blackburn with Darwen % 46.3 35.2 18.5
Blackburn with Darwen Number 20,200 15,300 8,100

43,600

North West % 56.8 26.3 16.9

Unemployment

Source: Annual Population Survey/Labour Force Survey: model based estimates of employment

Unemployment levels in the borough can be estimated from the numbers of people claiming unemployment related benefits, however this does not include all people classified as unemployed and as such, unemployment figures are derived from the Annual Population Survey and modelled to provide estimates at local authority level.

People are classified as unemployed are those who are without a job and who were available to start work in the two weeks following their survey interview and who had either looked for work in the four weeks prior to interview or were waiting to start a job they had already obtained.

At 5.8% the unemployment rate in the borough is above regional (4.4%) and national (4.3%) levels and is the highest of the local authority areas in Lancashire.

Proportion of unemployed residents aged 16 and over, April 2017 to March 2018 (showing confidence intervals)
Proportion of unemployed residents aged 16 and over, April 2017 to March 2018
Unemployment rates for Blackburn with Darwen, the North West and England, April 2017 to March 2018
Unemployment rates for Blackburn with Darwen, the North West and England, April 2017 to March 2018

Out of work benefits

The benefits available for people out of work to claim have changed significantly over recent years and with the introduction and roll out of Universal Credit, a broader span of claimants are required to look for work than under Jobseeker's Allowance. Since February 2018 Blackburn with Darwen became a full service area, so Universal Credit is now administered online and is available to all types of new claimant. In addition to Universal Credit, some 'legacy' benefits such as New Style JSA and New Style ESA can still be claimed in full service areas.

As such, several different benefit schemes are running consecutively which makes providing clear statistics on the characteristics of out of work benefit claimants difficult.

Alternative Claimant Count

Source: Alternative Claimant Count

The claimant count provides a summary of the number of people claiming Job Seekers Allowance and Universal Credit (with a requirement to seek work and be available for work). Together these benefits provide a headline indicator of the number of people claiming benefit principally for the reason of being unemployed.

Under Universal Credit, a broader span of claimants are required to look for work than under Jobseeker's Allowance. The implementation of Universal Credit has the effect of increasing the Claimant Count, due to this the Office for National Statistics have stated that the figures are no longer a reliable economic indicator. To address this, these new Alternative Claimant Count statistics measure the number of people claiming unemployment benefits by modelling what the count would have been if Universal Credit has been in place since 2013 with the broader span of people this covers.

An estimated, 4,641 people age 16 and over are claiming unemployment benefits, equating to 5.0% of the population aged 16 to 64. The rate for the borough is above the North West (3.6%) and England (2.9%) averages.

Alternative claimant count, number of claimants aged 16+ and as a proportion of residents aged 16 to 64
Blackburn with Darwen Blackburn with Darwen % North West % England %
November 2014 4,604 5.0 3.8 3.5
November 2015 4,336 4.7 3.6 3.0
November 2016 4,210 4.5 3.4 2.9
November 2017 4,288 4.6 3.4 2.8
November 2018 4,641 5.0 3.6 2.9

As would be expected the proportion of working age residents claiming unemployment benefits varies across the borough. Areas of Central ward (around Whalley Banks / King Street) have the highest claimant count proportion at 15.8% and the Stansfield Street / Hancock Street area 11.4%.

Incapacity related benefits

There are a number of benefits available to people unable to work due to illness or disability. In some areas of the country (such as Blackburn with Darwen) people are now moving onto Universal Credit, but these legacy benefits can still be claimed.

Employment and Support Allowance and other incapacity benefits

Source: Employment and Support Allowance and Incapacity Benefit / Severe Disablement benefit

When an application to ESA is made the applicant will have a Work Capability Assessment (WCA), which will see to what extent a person's illness or disability affects their ability to work. The WCA phase last for 13 weeks and the outcomes of the WCA are that a claimant is:

  • suitable for the Work Related Activity Group where work is feasible in the short to medium term,
  • suitable for the Support Group for those people with the most severe conditions, or
  • fit for work and therefore not entitled to continue claiming, although there is a right of appeal.
Number of Employment and Support Allowance claimants in each phase, Blackburn with Darwen
February 2015 February 2016 February 2017 February 2018
Assessment phase 1,784 882 1,161 702
Work Related Activity group 2,059 2,034 1,755 1,644
Support group 4,693 5,372 5,381 5,521
Unknown 258 273 271 228
Total 8,798 8,566 8,569 8,096

The two main conditions that claimants eligible for ESA are recorded as having, forming two thirds of claimants, are for 'mental and behavioural disorders' (4,336 53.6%) and 'diseases of the musculoskeletal system and connective tissue' (1,067, 13.2%).

As of 2014 Incapacity Benefit (IB) and Severe Disablement Allowance (SDA) claimants were transferred to ESA. Therefore the number of claimants remaining on IB is as of February 2018, was 150; of these 60 were receiving payment. People not receiving payment, will be obtaining national insurance contributions only.

Universal Credit

Source: Universal Credit statistics

As already noted above Universal Credit (UC) is being rolled out and will replace a number of benefits, however, it is still possible to claim ESA etc. The conditionality regime for UC claimants does not provide a breakdown that enables the identification of those claiming the benefit for reason of disability or a health condition.

Universal Credit conditionality regimes and description
Conditionality regime Description
Searching for work Not working, or with very low earnings. Claimant is required to take action to secure work - or more / better paid work. The Work Coach supports them to plan their work search and preparation activity.
Working - with requirements In work but could earn more, or not working but has a partner with low earnings
No work requirements Not expected to work at present. Health or caring responsibility prevents claimant from working or preparing for work.
Working - no requirements Individual or household earnings over the level at which conditionality applies. Required to inform DWP of changes of circumstances, particularly if at risk of decreasing earnings or losing job.
Planning for work Expected to work in the future. Lone parent / lead carer of child aged 1 (a). Claimant required to attend periodic interviews to plan for their return to work.
Preparing for work Expected to start preparing for future even with limited capability for work at the present time or a child aged 2 (b), the claimant is expected to take reasonable steps to prepare for work including Work Focused Interview.
Number of people on Universal Credit by conditionality regimes for Blackburn with Darwen
September 2017 September 2018 (p)
Searching for work 1,330 2,878
Working – with requirements 263 830
No work requirements 156 1,013
Working: no requirements 438 808
Planning for work 59 136
Preparing for work 90 204
Unknown or missing regime 5 ..
Total 2,335 5,865