How housing can bring graduates to North East England

Sunday 12th March 2017




Helen Goodman, Labour MP for Bishop Auckland

The North is struggling to attract and retain graduate workers, with 310,000 highly qualified British resident workers having left the region over the last decade. Many young people come to the region to study in our first class universities but, on graduation, they leave to find work elsewhere. Homes for the North recently assessed that in the North East, where my constituency is, there is the largest deficit of graduates in England. Their report states that 285,853 more highly qualified individuals would be needed to close that deficit. The North East comes last for its share of graduate employment locations in England for those who have graduated three or more years ago, which stood at under 5 per cent in 2014. The need for highly qualified workers in the region will probably increase if immigration is dramatically reduced after Brexit, as promised by the Prime Minister.

That is not surprising because the UK’s economy is dangerously London-centric. Regional differences are larger in the UK than anywhere in Europe. Figures from the Office for National Statistics show that the economic output, per head, in 2015 was £43,629 for London and £18,927 for the North East. The Government went someway to acknowledging that and the lagging of economic growth and impact in the North when they introduced their Northern Powerhouse initiative. However, they have, so far, failed to offer anything significant for the North East through the policy. A deficit of highly skilled workers constrains a local economy’s growth and reduces variety of economic activity. That is not to undervalue the extremely important role traditional industry in the region plays; however, without a variety of skills and economic activity, the North East risks become less attractive for investment by businesses.

Whilst the availability of jobs in a region is, of course, important, housing-based policies can offer something more long-term as an incentive for graduates. Additionally, the success of that incentive would, in turn, encourage further job creation as the region becomes more attractive. There are several ways that can be achieved.

In a recent ComRes survey, 50 per cent of graduates said the cost of housing was one of the top three most important factors in choosing where to live if they were relocating. So the North East ought to score highly as it offers a much more realistic prospect of affordable rent and home ownership for graduates in the North East than London. We need a housing policy for the country as a whole – with incentives to build in all regions. We do not want just new estates though; a focus on placemaking, using historic assets and with leisure and transport links, is what is needed. Further to that, employers have a role to play. Homes for the North have also recommended that Jobs Plus strategies, which combine employment prospects with other attractions like high quality housing, are introduced by the Government as part of the Industrial Strategy to tackle this issue in the North East, as well as the rest of the North.
Notably, once graduates have chosen to work in the North East, they are highly likely to remain in the area: nearly 80 per cent of graduates who work in the region remain there three years after originally working in the region. Universities, businesses and housing providers could bring that about by working together to provide tailored employment and housing schemes for students taking placement years, and ensuring graduate schemes like the Government Civil Service Fast Stream include North East placements for a proportion of those on the scheme.

Using housing to attract graduates could create long-term incentives, capitalising on the low housing costs of the region. That is not to say that housing, alone, will solve the entire problem of what has been described as a “brain drain” in the North. However, it is certainly a policy that the Government and Local Authorities should seriously consider, as part of a wider strategy, to ensure that the North and the North East becomes the thriving alternative “powerhouse” to London that it has the potential to be.

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