New analysis has revealed the Government’s focus on economic growth alone risks creating a “prosperity postcode lottery” that won’t deliver the jobs needed across the country to get people out of the welfare system and into work.
The Social Productivity Index, compiled by UKHospitality using ONS data, shows that the most economically productive sectors deliver the least social value.
It shows that foundational sectors, like hospitality, are the most effective at delivering growth widely, creating positive social impact and ensuring social and geographic accessibility.
These qualities are essential to deliver the Government’s ambitions to get more people back into work, and to create a fairer economy and society.
The Index is a new way to measure growth and it challenges the conventional method of defining economic success by solely focusing on GDP and financial productivity.
Many high economic productivity sectors, like those prioritised in the Government’s Industrial Strategy, often perform the worst. While those sectors deliver for specific areas, towns or cities, they fail to widely reach communities or provide accessible opportunities.
Foundational sectors perform most strongly using these metrics. Hospitality ranks first in employing part-time workers, employing under-25s and access for non-graduates, and in the top five for geographic spread, gender balance, employment of non-White British team members and proportion of people in managerial roles without a degree.
Kate Nicholls, Chief Executive of UKHospitality, said:
“There is so much more to growth than just raw economics, as our new Social Productivity Index reveals.”
“A tunnel vision approach to growth, which relentlessly pursues a narrow definition of economic growth alone, would risk creating a prosperity postcode lottery.”
“It will only benefit small clusters around the country, mainly in the South East, and sectors that deliver real change felt by real people would be overlooked.”
“It would leave swathes of the North and the Midlands behind, and fail to deliver on the Government’s ambition to help more people back into work.”
“Hospitality’s ability to support jobs and communities in every part of the country, offering career opportunities for all and driving social mobility are the qualities the Government needs to get more people back into work.”
“Government policy, particularly the Industrial Strategy, needs to recognise sectors that deliver this social value to ensure national renewal can truly be delivered. The index lays bare that high economic productivity sectors are simply not able to perform this role and will not help people back into jobs.”
“Hospitality can be the catalyst for both economic and social growth across the UK, not just in major economic hubs. The Government should look to businesses like ours to achieve its mission of bringing about a more equitable and fair economy and society.”
To fully realise the potential of hospitality and the foundation economy to drive socially productive growth, UKHospitality has three recommendations for the Government:
- Include social productivity and geographical distribution of growth alongside economic productivity when making impact assessments and developing public policy.
- Establish location-based strategies for areas and sectors that have been excluded from highly concentrated high-economic productivity sectors, helping to reduce regional inequality and provide equitable economic opportunities across the UK.
- Carry out analysis to reveal how high social productivity sectors, like hospitality, contribute to the success of high-economic productivity sectors.