Companies urged to sign ‘productivity deals’ to boost wages

Councils and local employers have been urged to sign ‘productivity deals’ to help boost local wages, according to a new report.

The report by think tank Localis warns that without such deals, some areas could get left behind and become ‘doughnut economies’ where the wages of residents remain far lower than those of commuters who journey into the areas to work.

In order to prevent this, it recommends major local employers sign productivity deals with local authorities.

On one level, the report argues the deals could be as simple as agreeing to hold regular meetings between business leaders and council leaders.

Or they could involve signing up to a detailed set of local agreements for economic growth and community renewal.

In return, councils could offer greater access to data, skills and spatial planning.

‘Our productivity crisis has been allowed to slip below the surface of national attention owing to Westminster’s Brexit theatrics,’ said Localis chief executive, Jonathan Werran.

‘But worrying official statistics suggest this problem of weak growth hasn’t gone away and must be faced down at local level throughout the country.

‘History teaches us that when communities prosper, businesses prosper,’ added Mr Werran. ‘In the straitened economic and troubled political waters we find ourselves in, local industrial strategies provide a sturdy life-raft in which to navigate these rough seas.

‘By realising the positive effect of successful local economic anchors in building prosperous places, local areas will attract and grow productive businesses: this in turn will further strengthen the communities in which businesses are based in a positive cycle of mutually-reinforcing prosperity.’

The report itself was commissioned by West Sussex County Council.

‘Maximising opportunities from Gatwick is a priority theme in the West Sussex Economic Growth Plan, and we look forward to working with the airport to explore the ideas and potential opportunities identified in the report,’ said county council leader, Cllr Louise Goldsmith.

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