West Midlands Watch: February Insights & Analysis

Manufacturers Eye Growth but Warn of Rising Costs in 2026

The latest Make UK–PwC Executive Survey shows manufacturers entering 2026 with optimism driven by a renewed Industrial Strategy and strong focus on innovation, digital transformation and new markets. However, escalating employment and energy costs are approaching a tipping point that could shift investment overseas. Despite 65% seeing more opportunities than risks, leaders urge faster government action to stabilise costs and protect the UK’s competitiveness. No regional breakdown available.

UK CFOs Signal Strong Confidence in Tech Investment and AI Growth

UK finance leaders are increasingly optimistic about technology spending and the impact of artificial intelligence, according to Deloitte’s latest CFO Survey. Nearly six in ten CFOs are more positive about AI’s ability to boost organisational performance, while almost all expect digital investment to rise over the next five years. Despite lingering caution on risk and geopolitics, expectations for productivity growth and business performance have strengthened, pointing to technology—especially AI—as a central driver of future UK growth. No regional breakdown available.

2026 Outlook Flags Geopolitics, Supply‑Chain Reordering and Tech Shifts as Key Global Risks

OCO Global, an international trade and investment advisory firm, Global Outlook 2026 reports that geopolitical tensions, shifting trade patterns and rapid technological change will heavily influence global investment decisions. It highlights tightening supply‑chain strategies, growing pressure on regions to adapt to new trade dynamics, and the need for place‑based growth strategies as uncertainty shapes economic planning. The review outlines indicators for 2026 and stresses that cities and regions must prepare for evolving global economic conditions.

Lords Warn UK Must Act Now to Prepare for an Ageing Society

A House of Lords Economic Affairs Committee report warns that population ageing poses a major long‑term threat to UK economic growth, public finances, and living standards. Rising longevity, low birth rates, and higher old‑age dependency will increase pressure on pensions, health spending, and the workforce. The report calls for action to extend working lives, improve health in later life, reform pensions, and boost productivity to ensure the economy remains sustainable as the population ages.

Resolution Foundation Warns of Slow Recovery as UK Enters 2026

The Resolution Foundation’s New Year Outlook 2026 argues that Britain enters 2026 with weak growth, fragile living standards and deep structural challenges. It highlights low productivity, rising pressure from ageing demographics, and ongoing fiscal strain limiting public spending. While early signs of economic reallocation and technological change offer cautious optimism, the report warns that without stronger productivity growth and policy reform, improvements in wages and living standards are likely to remain slow and uneven.

Project Hawking’ Urges Radical Plan to Triple Oxford–Cambridge Economy

A new report from Labour Together and the Centre for British Progress sets out an ambitious plan to triple the size of the Oxford–Cambridge economy by 2050. Project Hawking argues the corridor already hosts world‑leading life sciences, AI and advanced manufacturing but is held back by slow planning, fragmented regulation and housing shortages. It calls for a single powerful development corporation, major infrastructure investment and accelerated housing delivery to turn the region into a UK‑wide growth engine capable of funding public services and spreading prosperity nationally.

Shared Values Still Define Britishness – but Ethno‑Nationalism Gains Ground, IPPR Finds

New polling commissioned by the Institute for Public Policy Research (IPPR) shows most people still see Britishness as rooted in shared values like obeying the law and contributing to society, rather than ethnicity. However, the proportion who believe being “truly British” depends on birth or ancestry has almost doubled since 2023, reaching 36%. The research warns that ethno‑nationalist narratives—particularly strong among Reform UK supporters—are moving from the political fringes toward the mainstream, posing a growing challenge to Britain’s civic identity.

Policy Failures Blamed for Deepening Regional Inequality in Britain

An article by Paul Collier building on his book, Left Behind, argues that decades of policy missteps since 1979 have widened disparities in life chances between London and regional cities. The removal of exchange controls and subsequent public investment choices shifted economic activity southward, leaving former manufacturing hubs struggling with long‑term deprivation. These spatial inequalities have persisted, contributing to poorer life outcomes and even premature deaths in affected communities. Learning from France, which has moved from being amongst the most highly centralised systems in Europe alongside England in 2000, moves towards radical devolution, enabling fiscal autonomy and stronger accountability appear to be the answer.

UK Stuck in the Middle on Opportunity as Social Mobility Gaps Persist

The Social Mobility Commission’s State of the Nation 2025 report finds the UK performs averagely on social mobility internationally, with progress uneven and fragile. While more young people are entering professional jobs, chances remain strongly shaped by family background, housing costs and regional inequality. Upward income mobility has declined, and former industrial areas continue to lag behind growth hubs. The report warns that without action on education, housing, and place-based opportunity, social mobility risks stalling further.

Graduate Mobility Fuels Growing Geographical Inequality

An IFS study finds young workers in England are highly mobile, but high‑attaining graduates far more likely to move than non‑graduates. By age 27, selective migration sees graduates disproportionately relocating to high‑paying areas—especially London—while non‑graduates are less likely to leave their home regions. Migration increased in recent cohorts, particularly among graduates, reinforcing wage and opportunity divides as skilled movers cluster in prosperous areas and later flows fail to counter early‑career sorting. A related IFS briefing highlights that after 2008, investors increasingly viewed London as safer, demanding higher returns elsewhere and limiting regional investment. Place‑based policies are seen as the solution to tackling multiple constraints simultaneously.

‘The Missing Links’ Report Calls for Stronger Local Connections to Unlock Growth

The Missing Links report from the Institute for Community Organising (ICON) argues that weak connections between communities, institutions, and decision‑makers are undermining effective local change. Drawing on practical case studies, it shows how fragmented relationships, short‑term funding, and limited community voice reduce impact. The report calls for long‑term investment in local infrastructure, trusted intermediaries, and stronger social ties to enable communities to shape policy, improve services, and drive inclusive, sustainable outcomes.

UK Job Loss Triggers Sharp Drop in Spending Despite Benefits

An IFS report using UK bank‑account data shows newly unemployed workers lose about £1,200 in monthly income on average, with benefits replacing only around £600. As a result, households cut spending by roughly £550 per month, a decline affecting both discretionary and basic goods. Even short unemployment spells cause rapid living‑standards deterioration, though many households draw on other resources to limit the fall.

Higher‑Skill Jobs Dominate Vacancy Growth in East Birmingham and North Solihull

A new City‑REDI report analysing online job vacancies finds labour demand in East Birmingham and North Solihull has shifted decisively toward higher‑skilled roles. Based on vacancy data from 2022 to 2025, the study highlights strong growth in professional, managerial and skilled trade occupations, with teaching, IT and engineering among the most prominent sectors. Lower‑skilled and routine jobs have declined, and advertised wages are generally higher for professional roles. The findings suggest improved opportunities but underline the need for targeted skills pathways to help local residents and young people secure good‑quality employment.

JRF Sets Stark Income Benchmarks for Destitution

The Joseph Rowntree Foundation (JRF) has published updated income thresholds showing how little households need to avoid destitution in the UK as of October 2025. The briefing defines destitution as either lacking two or more essentials, such as adequate food, heating or shelter, or having an income so low that these essentials cannot be afforded without charity. JRF stresses the thresholds are extremely low and that households just above them still face severe hardship, underlining the scale of deep poverty and the urgent need for policy action.

City‑REDI Marks Decade of Driving Regional Innovation Through Research

The University of Birmingham’s City-REDI has highlighted how its research is supporting regional innovation as it marks ten years of impact. The institute’s work focuses on innovation, business support and helping firms—particularly startups and SMEs—grow and adapt within local economies. Research has examined business accelerators, support ecosystems and the Net Zero transition, translating academic insight into practical policy and programme design. City-REDI argues that place-based research, strong partnerships and evidence-led interventions are central to boosting productivity and delivering more inclusive regional growth.

UK Innovation Activity Rebounds in 2025, Driven by Small Firms and Frontier Businesses

The Enterprise Research Centre’s Innovation State of the Nation 2025 reports that 60% of UK firms introduced product or service changes in 2025, up from 56% in 2024. Innovation grew fastest among micro, small and frontier firms, while process innovation rose to 46%. Novelty increased too, with more firms reporting new to market offerings. However, large firm innovation remained flat, and nearly half of innovators still faced rising barriers. Interestingly, the West Midlands reported the highest proportion of firms seeking external advice of any UK region. This evidences the demand for improvement and growth among West Midlands businesses.

Universities Seen as Key to Unlocking Social Value for Community Organisations

Early findings from City‑REDI’s Collaborative Value Initiative highlights the difficulties smaller voluntary, community and social enterprise organisations face in measuring and demonstrating their social value. The research shows that existing social return tools are often costly and complex, leaving many organisations unable to capture their wider economic, social and cultural impact. The study argues universities are well placed to act as anchor institutions by developing simple, accessible measurement proxies, enabling community organisations to evidence their impact, compete for funding and strengthen their contribution to local economies.

West Midlands Shows Pockets of Resilience Amid Weak Business Confidence

According to the latest business intel from the Economic Intelligence Unit (EIU), the West Midlands outperformed much of the UK at the end of 2025, with business activity at a 19-month high and strong PMI readings, making it one of the best-performing regions outside London. Manufacturing and R&D investment remain relative strengths, alongside rising tech and sustainability investment plans. However, insolvencies increased, SME confidence weakened, construction stayed in deep contraction, and firms faced ongoing cost pressures, skills shortages and subdued investment intentions heading into 2026. Read more in the annex.

Zombie Firm Collapse Risk Sparks Warning Over Rising UK Unemployment

Britain faces a sharp rise in unemployment as higher interest rates and weak growth trigger the collapse of so‑called “zombie” companies, according to the Resolution Foundation’s New Year Outlook 2026. The report warns that many low‑productivity firms, kept alive by cheap credit in the past decade, are now vulnerable, threatening job losses concentrated in lower‑paid sectors. It says the fallout could test the labour market just as economic growth stalls. Unfortunately, no regional breakdown to the data is provided.

Understanding Labour Demand in East Birmingham and North Solihull

This City-REDI blog highlights that labour demand in East Birmingham and North Solihull has shifted towards higher‑skilled work between 2022 and 2025, based on analysis of Adzuna job postings. The share of professional and skilled‑trade roles has grown significantly, with nearly half of all vacancies now in higher‑level occupations, well above the West Midlands and England averages. Meanwhile, routine and lower‑skilled jobs, especially elementary roles, have declined in relative importance, reflecting the area’s sector mix and its proximity to Birmingham’s large public‑sector, university and professional‑services employers.

Adult Skills Fund Data Reveals Wide Gaps in Local Learning Participation

New Local Government Association analysis shows large disparities in adult participation in tailored learning across England under the Adult Skills Fund. While the national rate stands at about 1,036 learners per 100,000 adults in 2024/25, council figures range from fewer than 300 in some areas to more than 6,000 in others. Rates in the WMCA area vary from 1,213 in Wolverhampton to 620 in Dudley. The report highlights uneven access to skills and employment‑focused learning, raising questions about local capacity and funding effectiveness.

Survey Reveals UK Numeracy Crisis Holding Back Millions

A major new report from The Richmond Project, Number Nation 2026, finds that weak confidence and skills with everyday numbers remain widespread across the UK. Based on responses from more than 10,000 people, the study shows that only around four in ten adults (40%) demonstrate high numerical competence, while many overestimate their ability. In the West Midlands 37% demonstrate high numerical competence. Women and low‑income groups are disproportionately affected, with anxiety around numbers limiting work, family finances and children’s learning. The report warns that poor numeracy is a significant barrier to social mobility and calls for urgent, targeted action.

Study Links Qualified Nurse Shortages to Higher Patient Mortality

An IFS Journal of Health Economics study found that hospital patients faced higher mortality when degree‑qualified nurses were absent, with shortages increasing death odds by about 10%. In contrast, gaps among less qualified assistants show no mortality effect. Greater hospital‑specific experience among qualified nurses reduces deaths, with impacts strongest among less frail patients and those with sepsis, underscoring the critical role of skilled nursing staff in patient outcomes.

New Research Urges Stronger ICS–Strategic Authority Collaboration to Tackle Inequalities

A Centre for Local Economic Strategies (CLES) and King’s Fund essay finds integrated care systems (ICS) and strategic authorities have growing potential to reduce health inequalities but must work together more effectively. As devolution reshapes responsibilities, both bodies hold key levers over wider health determinants and service planning. The report argues that strengthened collaboration, clearer roles, adaptation to evolving policy changes, and geographical alignment between ICS and Strategic Authority boundaries will be essential to improving population health and addressing persistent disparities.

Wealth Extraction Is Undermining UK Care Quality

A Centre for Thriving Places review finds significant public funds are leaking from the UK care system, with for profit providers extracting large returns through high risk financial structures, debt loading and dividend payouts. Adult and children’s residential care now rely heavily on private ownership, yet quality and workforce conditions lag while owners can rack up significant profits. The report highlights how profit driven models weaken accountability and undermine care standards.

Emergency Care Crisis Exposed as Corridor Treatment Becomes Routine

A report by the All‑Party Parliamentary Group on Emergency Care, supported by the Royal College of Emergency Medicine, warns that “corridor care” has become a widespread and unsafe feature of NHS emergency departments. It finds nearly one in five patients were treated on trolleys or chairs in corridors during summer 2025, with staff reporting significant risks to safety, dignity and outcomes. The report links overcrowding to hospital bed shortages, delayed discharges and underfunded community care, urging urgent system‑wide reform.

Oral Nicotine Pouch Use Rises Sharply Across Great Britain, Lancet Study Finds

A new Lancet Public Health study reports rapid growth in oral nicotine pouch use in Great Britain between 2020 and 2025, particularly among younger adults and people who already use nicotine. While overall prevalence remains relatively low, uptake has increased steadily, raising concerns about nicotine dependence and potential gateway effects. The authors warn that current regulation lags behind market expansion and call for closer monitoring and clearer public health guidance as nicotine products diversify.

Violence Drives Hidden Crisis of Missing Women as SafeCall Appeal Launched

More than 40,000 women and girls go missing each year in the UK because they are fleeing violence, a charity has warned, exposing a hidden crisis overlooked by current policy. Survivors say abuse and coercive control leave them feeling disappearance is their only escape, often putting them at grave risk of further harm. The findings underpin The Independent’s SafeCall appeal, supporting Missing People to launch a new national lifeline offering confidential help to those at risk.

Most Councils Back Sanctuary Schemes but Gaps Remain, LGA Finds

A Local Government Association research report finds that Sanctuary Schemes—designed to help domestic abuse survivors remain safely in their homes—are in place across most councils in England and Wales. While the majority of authorities view the schemes as effective, provision is inconsistent, with variation in funding, eligibility and ongoing support. The report highlights capacity pressures, reliance on short‑term funding and uneven integration with wider housing and domestic abuse services, calling for clearer national guidance and sustainable investment to ensure survivors receive consistent, long‑term protection.

Policy Exchange Urges “Beautiful Density” to Tackle Housing Crisis

A new Policy Exchange S.M.A.R.T. Density report, argues England can boost housing supply without high‑rise towers by focusing on mid‑rise streets, mansion blocks, and well‑designed neighbourhoods. It promotes “S.M.A.R.T.” principles—streets, mixed uses, aesthetics, residents, transport and regulation—to show dense development can be popular and liveable. The report says concentrating growth in attractive urban areas could increase supply while strengthening communities and public support for development.

Machine Learning Offers New Insight into Urban Development Trends

A new study shows how machine learning and natural language processing can transform urban planning by analysing planning application text at scale. Researchers developed a national pipeline that collects, locates, and classifies planning applications in Australia into four development types, achieving high accuracy using advanced language models. Applied to Sydney and Melbourne, the approach reveals clear spatial patterns in housing, commercial and land development, offering planners near‑real‑time insight into housing supply pipelines and infrastructure needs. The study highlights the potential of AI to improve evidence‑based planning and policy decisions.

Government Unveils New Road Safety Strategy with Ambitious 2035 Targets

The government has published its first road safety strategy in over a decade, aiming to cut the number of people killed or seriously injured on Great Britain’s roads by 65% by 2035, with a 70% reduction target for children. The strategy adopts a “Safe System” approach, focusing on safer road users, vehicles, infrastructure and enforcement, alongside consultations on drink‑driving limits, driver training and mandatory vehicle safety technologies.

Government Confirms Devolved Powers to Tackle Pavement Parking

The government has ruled out a national ban on pavement parking, opting instead for a devolved approach that gives local transport authorities new powers to act. From 2026, councils will be able to enforce against “unnecessary obstruction” via secondary legislation, supported by statutory guidance. At the next legislative opportunity, authorities will be empowered to prohibit pavement parking across their areas, with strategic authorities holding powers outside London.

Northern Powerhouse Rail Plans Announced with Feasibility Study into Birmingham to Manchester Link

Department for Transport announced plans to develop the Northern Powerhouse Rail plans which will see upgrades to lines between Leeds, York, Bradford and Sheffield first in the 2030s, with better connections to Manchester in later phases. The UK Government also set out a long-term objective to see a full new north-south line from Birmingham to Manchester. This will ensure sufficient capacity and better connectivity on the West Coast Main Line, but it won’t be a revival of HS2 Phase 2. Instead, the government will launch a feasibility study, working with local partners on what will be delivered, when and to what specifications.

How Well is Your Council Fixing Your Roads?

The UK Government has launched an interactive map for residents to see how well their council is fixing their roads.  New red, amber, green ratings let the public see which local highway authorities are fixing potholes effectively. The Government’s record £7.3 billion funding announced at budget is helping councils get on with fixing the nation’s roads. Coventry and Sandwell are rated Green with the remainder of our Local Authorities rated Amber.

Study Finds Ethnicity Shapes Travel Choices More Than Migration Background in England

A new Transport Journal study finds that travel behaviour in England varies significantly by ethnicity, with migration background playing a smaller role. Using UK Household Longitudinal Survey data, researchers show lower car and cycling use among some ethnic minority groups, alongside higher bus use, particularly among Black or Black British participants. Many differences reflect socio‑economic and residential factors, but some persist, suggesting cultural influences and implications for sustainable transport and mobility inequality. The research notes that lower car use among ethnic minorities could also increase the risk of social exclusion for these groups if bus services are cut or prices rise. This is particularly relevant as WMCA moves towards bus franchising and the use of behaviour change to encourage maximum use of investment in active travel infrastructure.

Will Building Homes Next to Stations Fix Labour’s Housing Problem?

Labour’s plan to fast‑track housing near well‑connected railway stations aims to unlock land, boost density and support sustainable travel, with developments receiving a default “yes” under planning rules. Property Week analysis warns delivery will depend on developer viability, local infrastructure capacity and market demand, noting risks around funding, design quality and community consent. While the policy could accelerate supply in high‑demand areas, it is unlikely to solve housing shortages alone.

The Missing Links: Connecting Disadvantaged Neighbourhoods to New Economic Opportunities

The Independent Commission on Neighbourhoods (ICON) has released a report examining the nature of economic change in neighbourhoods’ economies during the 2010s and considers what distinguished the neighbourhoods that improved economically from those that did not.  It offers four policy ideas to drive economic growth in the most disadvantaged areas - a Neighbourhood Jobs Guarantee, Neighbourhood Investment Relief Budgets, Working Neighbourhoods Transport Grants, and Nightingale Skills Centres. The report suggests ways in which the Local Growth Plans being developed by Mayoral Strategic Authorities can link people in deprived neighbourhoods to local employment and training opportunities.

Councils Could Unlock £276bn Boost to UK Economy, LGA Report Finds

A new Local Government Association report argues councils are a “force for growth” with untapped potential to drive inclusive economic development. It finds that empowering local authorities through stronger devolution, stable funding and closer partnership with national government could add up to £276 billion to the UK economy. Councils’ roles as planners, convenors and investors are highlighted as critical to boosting productivity, attracting investment and ensuring growth benefits communities across towns, cities, rural and coastal areas.

Localis Warns Digital Integration Will Make or Break Devolution Reforms

A new Localis report, Connected Devolution, argues that England’s local government reorganisation will fail to deliver promised efficiencies unless councils prioritise integrated digital systems. It finds fragmented legacy technology, limited digital capacity and unclear governance threaten reform efforts. Drawing on UK and international examples, the report urges stronger digital leadership, shared platforms and long‑term investment to turn structural change into better services, higher productivity and a sustainable devolution dividend.

Whitehall Monitor 2026 Warns Government Reform Has Yet to Take Hold

The Institute for Government’s Whitehall Monitor 2026 finds Labour’s pledge to “rewire the state” has produced only fragmented initiatives without meaningful workforce reform. Despite mission led pilot schemes, longstanding civil service issues persisted through 2025, and no clear plans exist to tackle underlying problems. A year after promising sweeping change, the civil service looks much as it did when Labour took office, with major reform still lacking.

Report Warns Frequent Local Elections Add Millions to Council Costs

A new study by the TaxPayers’ Alliance says councils that hold elections by thirds or halves significantly increase costs for local taxpayers. The report finds that more frequent elections lead to higher spending on staffing, venues, administration and voter communications. It estimates that councils could have saved almost £25 million between 2021 and 2024 by holding whole-council elections instead. With local authorities under severe financial pressure, the study questions whether the benefits of frequent polls justify their added expense.

Office Occupation Linked to Sharp Rises in Indoor Air Pollution, Study Finds

University of Birmingham researchers have developed a low-cost system combining radar-based movement tracking with air quality sensors to better assess indoor pollution. Trials in Birmingham offices showed occupants’ activity resuspends particulate matter, with PM₁₀ levels up to four times higher when spaces were occupied. CO₂ and volatile organic compounds also rose markedly on working days, highlighting how building design and ventilation can be improved to protect health.

WMCA Economic Dashboard

The latest dashboard prepared by the EIU shows a steady decline in the number of universal credit claimants in the intensive work search regime. Over the same period, the youth claimant rate has continued to rise. Youth claimants are currently an increasing proportion of those on unemployment benefit. Latest data from the ONS shows an increase in the WMCA area employment rate on the year to September 2025, up by 0.9 percentage points (PP) on the year to September 2024. Over the same period economic inactivity has fallen by 2.0pp, signalling some good labour market news for the WMCA area. Find these figures and more in the annex.

Preventable Mortality on Trajectory to Return to Normal Levels after Pandemic Period

Data available on the WISE Data Profiler shows a clear rise in preventable mortality over the pandemic period which is on a strong trajectory to return to pre-pandemic levels. At the peak in the 2020-22 period preventable mortality rates per 100,000 varied across the region from 154.5 in Solihull to 232.5 in Birmingham. In the latest period for which data has been released (2022-24) rates have fallen back to 133.7 in Solihull and 190.7 in Birmingham. This is only marginally above the pre-pandemic rates of 128.3 and 177.8 respectively.