The 2008-9 financial crisis and the ensuing economic downturn had tumultuous implications upon society and at the regional level in particular. To this end a number of academics have begun to focus upon the specific effects of the crisis on economic structures and processes at a variety of different scales. The challenge is that whilst it is relatively easy to denote the changes taking place at the national scale, it is equally important to convey the implications of this process at other scales, such as the regional and local levels.
Figure 17 and Figure 18 convey that the increasing gap in wealth and inequality between those at the top and bottom of the socio-economic hierarchy has created a dichotomy between spaces of absolute deprivation - such as for many working class families in the North West of England - and those of relative wealth - predominantly
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the South East of England. Although there are pockets of wealth dispersed within regions, the regional scale is important for revealing the geographical intensification of social and economic polarisation.
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71 Local Authority Greatest Overall Risk Middlesbrough 1
Kingston upon Hull 2
Knowsley 3 Hartlepool 4 Liverpool 5 Nottingham 6 Manchester 7 Stoke on Trent 8 South Tyneside 9 Blackburn with Darwen 10 Leicester 11 Wolverhampton 12 Halton 13 Sunderland 14 Mansfield 15 Rochdale 16 Newcastle upon Tyne 17 St Helens 18 Birmingham 19 Burnley 20 Redcar and Cleveland 21 North East Lincolnshire 22 Gateshead 23 Stockton-on-Tees 24 Sandwell 25 Salford 26
Figure 19: Local authorities whose constituents are at greatest risk of poverty in England (Source: Guardian, 2012).
Research by the Centre for Cities (2011a) indicates that the recession has caused increased levels of deprivation, with a number of locations in the North West
particularly implicated (see Figure 17). Similarly, Taylor-Gooby and Stoker (2011:8) rightly point out:
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“however the spending programme is analysed, the cuts in services for poorer groups substantially outweigh the impact of tax increases on higher-rate taxpayers.”
In particular, attention has begun to be enshrined upon the changing nature of the relationship between the state and its citizens, and within this guise, specifically surmising the effects of changes to welfare provision on those more vulnerable members of society attributed to the discourse to ‘make work pay’ (Standing, 2011; Theodore and Peck, 2013). Specifically this refers to those who no longer have the guarantee of a minimum standard of living as the bargaining position of the average citizen has been radically altered, resulting in many now having to find new and novel methods of ensuring access to particular welfare facilities previously enacted by the state. This has principally been an issue in the North West where much of the welfare provision available had been propped up by an extensive public sector framework (see Figure 19).
Whilst the crisis impinged upon the functioning of virtually every local, regional, national and supranational institution entrenched within the globalised economic system (Peck et al., 2012), the implications unsurprisingly vary considerably across time and space. Indeed, the North West of England appears significantly
compromised by a cornucopia of intrinsic effects resulting from economic stagnation and a move towards a politics of more extreme workfarism and austerity (Centre for Cities, 2011c). This region will serve as an appropriate surrogate for analysing the connotations of the Coalition’s welfare-to-work agenda. Recent data indicates that of the fifty boroughs in England most at risk of their citizens being in poverty, fifteen reside in the North West, and many lie within inner city areas (Guardian, 2012) (see Figures 19, 20 and 21). And if one takes a closer inspection of the specifics, it also becomes clear that women, the young and families will be most vulnerable to such difficulties (MacLeavy, 2011). Furthermore, it is these distinct locations which are becoming significant as spaces of contestation and resilience in the face of a
developing austerity agenda in the UK (Shaw, 2012). However, these changes may be challenged in terms of their unique structure; are they definitely a significant leap into the unknowns of austerity-driven workfarism, or are they more likely the
reinvention and renewal of a socio-economic discourse which has underwritten UK society for a much longer period?
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In his 2012 budget, Chancellor George Osborne indicated that an additional £10bn of spending cuts would be needed by 2016/17, which would be in addition to the initial £18bn worth of annual cuts outlined at the beginning of the parliament (IFS, 2012a). Henceforth, for those regions most intently implicated by the fiscal austerity, particularly those in the North and West (Beatty and Fothergill, 2013), the welfare scenario is often one of increasing poverty and deprivation (especially those low income households containing children) (IFS, 2012b), coupled to poor employment and education prospects as both direct and indirect results of spending retrenchment (JRF, 2012). Further to this, the current conditions appear only to serve to enforce societal inequality to an even greater extent than has been experienced in the UK over recent decades, as “some people in some places have suffered
disproportionately more than others” (Kitson et al., 2011:294). This is a disparity which has long been an issue between regions of the North and South, as well as within the North West region itself (see Figures 19, 20 and 21). The outcome is seemingly a steep descent into a vicious cycle of demising living standards for the most vulnerable members of society, including the significant proportion of public sector workers in the North and West, who have become endemically reliant on the safety net which state welfare provision has traditionally provided (Taylor-Gooby, 2012a). Indeed Piachaud (2012:100) has suggested that “benefits are being cut to contribute to the overall reduction in public spending; overall those on lower incomes will lose.” However, it remains debatable as to just how much of an impact the
current catalogue of welfare reforms are having upon the overarching initiative to drive down public spending (which has continued to rise in real terms). With vast numbers of such citizens residing in the North West of England, where many are increasingly experiencing a multiplicity of hardships resulting from a combination of unemployment, poverty and targeted fiscal rationalisation policies (JRF, 2011), future research should be engaging to disentangle the processes and experiences being profligated in the differentiated everyday lives of these citizens.
Subsequently then, the forms and processes by which resistance to these changes to welfare provision are beginning to manifest themselves in British society and in cities in particular, must be identified and critically addressed, since these are pertinent locations to analyse these issues. In addition to this, it is important to articulate if there are any new pronunciations of resilience coming to fruition. The
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answer looks increasingly likely to lie in the uneven nature of hardships and
inequalities being faced by citizens at different scales within society (Taylor, 2010). Following on through this thematic, the forms of resistance which are likely to occur are necessarily dependent on the contingent experiences of different people in different places around the UK. Henceforth, the ways in which this is played out effectively determines the exact nature of the austerity-driven welfare-to-work experienced by members of society in alternate regional settings and subsequently therefore the nature of the resistance and contestation to such negative
connotations. Thus the individualistic tendencies of the impacts of austerity are continually being played out in a multitude of forms (JRF, 2012), and this will only continue to intensify into the future as the aftershocks of the downturn persist. For instance, a number of UK regions have suffered from socio-economic decline since the late 1970’s, including the North West, the Midlands, the North East and South Wales (Martin, 2012), at the same time as the financial services sector in the South East and London has grown and strengthened exponentially, a trend which has been embedded even further since the 2008-9 crisis (Gardiner et al., 2013). Neoliberal policy rhetoric since the beginning of the Thatcher Government in 1979 has developed a market economy underpinned by a flexible labour market, which has left some parts of the UK blighted by the loss of core industrial and
manufacturing sectors, and the un(der-)employment and social issues which have inevitably followed (Andre et al., 2013).
In the North West, the 1980s and 1990s saw widespread economic restructuring and underperformance. Since 2000, the situation has improved somewhat, but the region still fails to achieve its potential contribution to the wider UK economy (Centre for Local Economic Strategies, 2014). For much of the 21st Century, public sector employment has filled the gap left by the earlier period of declining employment, however with public sector employment accounting for 20.3% of all employment in the region in the first quarter of 2013 (ONS, 2013a), the cuts being made as part of government austerity measures are having a much more debilitating effect in the North West than elsewhere (Centre for Local Economic Strategies, 2014). Indeed, the unemployment rate in the North West is relatively high at 8.1%, compared with the national average of 7% and is 2% higher than when the financial crisis hit in 2008-9 (ONS, 2014b).
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Clearly, the austerity measures being implemented, and particularly the cuts to welfare expenditure which thus far have been at the forefront of such fiscal policies in the UK and beyond, will be reciprocally felt nationwide, yet will most likely entail their most acute consequences at the local scale. However, such cuts exhibit a distinctly uneven spread of effects within different regions and localities within state space (Beatty and Fothergill, 2013). This has therefore resulted in the loss of a significant number of jobs in the public domain, leading to a return to steadily rising unemployment; the North West stands apart from other regions in this respect because of its apparent over-zealous reliance upon the public sector to prop-up the economy, and has subsequently begun to suffer the repercussions of having an ambiguous hole left gaping in its socio-economic fabric by the 30,000 jobs already lost by 2012, coupled to in excess of 80,000 more likely to be lost by 2017 (TUC, 2012). However this is contested by a number of critics, notably Neil O’Brien,
Director of the Policy Exchange think tank (cited in The Telegraph, 2012b). Whilst the region was relatively insulated from the vast majority of the cuts in the early part of the parliamentary term, Figure 20 shows that the employment situation in the North West of England continued to deteriorate, with unemployment peaking at 331,000 in May 2012 (9.5%) (ONS, 2012b). This compares to a pre-crisis figure of 221,000 (6.6%) in August 2008 (ONS, 2008).
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Summary of LFS headline indicators (thousands, seasonally adjusted)
All aged 16 & over
All aged 16 & over Total economically active Total in employment Un- employed Economically inactive Economic activity rate (%) Employment rate (%) Un- employment rate (%) Economic inactivity rate (%) Number of people 1 2 3 4 5 6 7 8 9 Mar- May 10 5,529 3,423 3,137 286 2,106 61.9 56.7 8.4 38.1 Mar- May 11 5,547 3,413 3,120 292 2,135 61.5 56.3 8.6 38.5 Jun-Aug 11 5,551 3,434 3,152 282 2,117 61.9 56.8 8.2 38.1 Sep- Nov 11 5,556 3,443 3,136 307 2,112 62 56.5 8.9 38 Dec- Feb 12 5,559 3,401 3,076 325 2,159 61.2 55.3 9.6 38.8 Mar- May 12 5,563 3,470 3,140 331 2,093 62.4 56.4 9.5 37.6 Change on quarter 4 70 64 6 -66 1.2 1.1 0 -1.2 % 0.1 2.1 2.1 1.7 -3 Change on year 16 58 19 38 -42 0.9 0.2 1 -0.9 % 0.3 1.7 0.6 13.2 -2
Figure 20: Peak North West unemployment May 2012 (Source: Office for National Statistics (ONS), 2012).
With this in mind, Lowndes and Pratchett (2012) have conveyed that the local scale is crucial for analysing and experiencing the effects of the cuts and reforms to welfare which are being made. Indeed, it has become evident on numerous
occasions over the past few years since the austerity cuts and fiscal rationalisation programmes have come into force in the UK, that certain localities and areas have been hit far harder than others (Church Urban Fund (CUF), 2012). There has been a definitive deepening of the North-South divide owing to the effects felt as a direct result of the retrenchment, or even the complete removal of specific elements of welfare provision. This is especially applicable to employment benefits, with the Coalition Government’s heavy emphasis on ‘making work pay’ through the extension of the welfare-to-work initiative (MacLeavy, 2011). Henceforth, the North West of England has been carefully selected as the key site for conducting this research
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project, because it exhibits locations demonstrating both enormous problems relating to the recession and cuts to public spending, but similarly locations apparently
relatively well insulated from the retrenchment of welfare provision due to their greater linkages within the private sector (Hamnett, 2010), as well as much deeper rooted issues including class politics, age and gender concerns. However, it must also be noted that undertaking an analysis of an entire region comprising the sheer size and complexity displayed by the North West throws up a number of difficulties and challenges.