UK Government’s ‘Tunnel Vision’ Growth Approach Risking Nationwide Job Opportunities

A recent analysis has highlighted that the UK Government’s concentrated focus on economic growth could inadvertently incite a ‘prosperity postcode lottery’. This singular focus on economic growth overlooks the broader social value. It may not facilitate the creation of sufficient job opportunities nationwide to enable individuals to transition from welfare to employment.

According to the Social Productivity Index, compiled by UKHospitality using data from the Office for National Statistics (ONS), sectors with high economic productivity often deliver lesser social value. Foundational sectors, such as hospitality, are identified as being most effective in delivering widespread growth, creating positive social impact, and guaranteeing social and geographical accessibility. These factors are crucial in realizing the government’s ambitions for increased employment and creating a more equitable economy and society.

The hospitality industry, a foundational sector, ranks highly on several social impact metrics. It is the leading employer of part-time workers, under-25s, and non-graduates. The sector also ranks in the top five for geographic spread, gender balance, employment of non-White British team members, and the proportion of managerial roles filled by individuals without a degree.

In contrast, sectors that are prioritized in the government’s Industrial Strategy and characterized by high economic productivity often underperform in these areas. While these sectors deliver for specific regions, towns, or cities, their impact does not extend widely into communities or provide accessible opportunities.

Commenting on the findings, Kate Nicholls, Chief Executive of UKHospitality, warned against a ‘tunnel vision’ approach to growth, which pursues a narrow definition of economic growth alone. She cautioned that this could risk creating a prosperity postcode lottery, benefiting only small clusters primarily in the South East. Nicholls argued that sectors delivering tangible change felt by individuals are often overlooked, leaving regions in the North and the Midlands disadvantaged and falling short of the government’s ambitions to facilitate employment.

For the hospitality sector to optimally drive socially productive growth, UKHospitality has recommended three actions for the government.

Firstly, social productivity and the geographical distribution of growth should be included alongside economic productivity when making impact assessments and developing public policy.

Secondly, establish location-based strategies for areas and sectors excluded from highly concentrated high-economic productivity sectors to reduce regional inequality and provide equitable economic opportunities across the UK.

Lastly, analyze how high social productivity sectors, like hospitality, contribute to the success of high-economic productivity sectors.