Subregional public and private sector employment Richard Prothero Head of Regional Economic Analysis. Office for National Statistics March 2012.

Public (and Private) Sector Employment Not all of the subregional data that ONS possess on public and private sector employment had been published and analysed. So, ONS released an article providing this data and some analysis and guidance in November 2011.

Existing Regional and Subregional data Regional PSE statistics usually quoted as public sector share of employment. ▫South East 17.5%, London 18.8%, North East 25.2%, Wales 25.9% etc Subregional public sector data via BRES quoted in the same way (share of employees). ▫Copeland 52%, Middlesbrough, Preston, Watford 37%, South Bucks, Christchurch 7%

From this it is tempting to conclude that......places such as Middlesbrough, Preston and Watford have lots of public sector jobs and lots of residents employed in the public sector. But it is a mistake to do so from this data alone.

It is possible that... a subregion may have a high share of public sector employment but a)this is due to it being the location for a very low level of private sector employment, rather than an above average level of public sector employment, and/or b)due to a high level of in-commuting, the employment rate of its residents in the public sector is actually below average.

What the existing data tells us (1) Public Sector employment located in the subregion = Total (Public + Private) employment located in the subregion. What it doesn’t tell us. Is a high result to this measure due to :- a ‘high level’ of public sector employment, or a ‘low level’ of private sector employment, or a mix of both.

What the existing data tells us (2) The location of employment. What it doesn’t tell us. Where the employed residents live. Many public sector jobs are located in urban areas (e.g. hospitals, council offices). But do the employees live in the same urban area or do they commute?

What else is available? Can use BRES to examine employee densities ▫Dividing number of employees with employment located in the subregion (from BRES) by the number of yr old residents in the subregion (from mid-year population estimates). Can use APS to examine residential employment rates. ▫What share of yr olds resident in any subregion actually work in the public sector? and in the private sector?  Note: APS overestimates public sector employment due to self- reporting. Assuming this will not impact spatial pattern.

The public sector employment rate for Middlesbrough is only the same as the UK average. This is despite it having one of the highest shares of public sector employment in the UK. In this case it appears to be due to commuting. The Employee Density data suggests their is indeed a high level of public sector employment in Middlesbrough. However, this has not fed through to high public sector employment amongst its residents.

For the Humber Local Enterprise Partnership, the above average share of public sector employment is not due to the area being the location for a high level of public sector employment. Instead it is a reflection of the very low level of private sector employment in the area – as shown by the private sector employee density.

This is the data for the Liverpool City Region LEP. It is fairly typical for a Northern City in having a high share of public sector employment. The public sector employment rate is slightly above the UK average. However, the most striking aspect of the data is probably the very low private sector employment rate. The net effect is an overall employment rate more than 5 percentage points below UK average.

This is a diagrammatic map of Local Enterprise Partnerships in England. Mapping the share of public sector employment shows a north south divide. It is highest in ‘North Eastern’, ‘Tees Valley’ and ‘Liverpool City Region’ Lowest in ‘Buckinghamshire Thames Valley’, ‘Thames Valley Berkshire’, ‘Northamptonshire’, ‘Dorset’ and ‘Enterprise M3’. Share of Public Sector Employment.

A map of the private sector employment rate of residents in each LEP. It is almost a mirror image of the previous map. It shows strong clustering of high private sector employment rates in the South of England – particularly to the immediate West of London. Meanwhile, private sector employment rates are lowest in the following LEPs ‘North Eastern’, ‘Tees Valley’, ‘Liverpool City Region’ and ‘Black Country’. Private Sector Employment Rate

The public sector employment rate map is a little different. The LEPs with the highest public sector employment rates are spread north & south. Solent, Dorset, Swindon & Wiltshire, Oxfordshire, Heart of the South West all have higher public sector employment rates than Leeds City Region, Tees Valley, Humber, and Greater Manchester. The LEPs with the lowest public sector employment rates are clustered around London or around Birmingham. Public Sector Employment Rate.

Private Sector Employment Rate In case the LEP maps were a bit confusing, here is a map you will recognise, now also including Scotland & Wales. NUTS 2 subregions share of yr olds in employment High North Eastern Scotland 60% Surrey, East & West Sussex 60% Berkshire, Buckinghamshire and Oxfordshire 58% Cheshire 58% Bedfordshire & Hertfordshire 57% Gloucestershire, Wiltshire and North Somerset 57% Low West Wales 44% Merseyside 44% West Midlands 45% Northumberland & Tyne and Wear 46% Northern Ireland 46% Tees Valley 46%

Public Sector Employment Rate NUTS 2 subregions share of yr olds in employment High Highlands and Islands 25% East Wales 21% North Yorkshire 21% West Wales 21% Northumberland & Tyne and Wear 20% South Western Scotland 20% Low Inner London 14% Cheshire 15% Cornwall & Isles of Scilly 15% Surrey, East & West Sussex 15% Leicestershire, Rutland and Northamptonshire 16% Essex 16%

Clusters of public sector employment? (or clusters of private sector employment?) A Question.An Answer. is the spatial distribution random – in which case levels of public sector employment in a local authority would be entirely independent of the levels in neighbouring authorities, or is the spatial distribution clustered – such that a local authority with high levels of public sector employment is likely to be surrounded by other local authorities with similarly high levels of public sector employment (thereby forming a cluster). Moran I statistic (0=random, 1=clustered) Private sector employment rate = Public sector employment rate = spatial clustering is more prevalent among private sector employment rates than public sector employment rates.

Summary The most common indicator of subregional public sector employment is the share of public sector employment in total employment. However, it is unwise to make judgments based solely on this. There are other measures available, and a combination of the different measures can provide a more nuanced view. Often, a high share of public sector employment in total employment is down to a shortage of private sector employment in an area, rather than an above average level of public sector employment. Also commuting patterns mean that a subregion that is the location for an above average amount of public sector employment will not necessarily have an above average public sector employment rate amongst its residents. It is private sector employment, not public sector employment, that is most clustered in the UK.

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