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Model-Based Estimates of Unemployment for
Local Authority Districts and Unitary Authorities

January 2007 to December 2007

Go to Summary Comments

To overcome missing and imprecise unemployment data at the district level within the Annual Population Survey - Labour Force Survey, the Office for National Statistics has developed an annual model-based methodology that has enhanced the quality of ILO unemployment at the local level and enabled more reliable and precise unemployment estimates to be produced for local authority districts and unitary authorities. The new estimates are now accredited as National Statistics. The model based unemployment data is only available for total unemployment and is not subdivided by age or sex.

The model-based estimate improves on the annual LFS/APS estimate of unemployment by 'borrowing strength', mainly from the claimant count of Jobseeker's Allowance, to produce an estimate that is more precise (that is, it has a smaller confidence interval) than the direct annual LFS/APS estimate. The gain in precision is greatest for areas with smaller sample sizes.

Please note that the Model Based Estimates of Unemployment have been revised since the release of the October 2006 to September 2007 data. Figures are being revised for previous dates on a rolling basis and therefore figures may not match with figures previously published on this website.

Official Unemployment Statistics for Lancashire and Lancashire Sub-Regions
(Yearly Averages, Produced Quarterly)
January 2007 to December 2007

Summary Comments

For the year ending December 2007, the four East Lancashire districts of Burnley, Pendle, Hyndburn and Blackburn with Darwen Unitary Authority and a fifth local authority, Blackpool Unitary Authority in the west of the broader Lancashire sub-region have model based unemployment rates above the GB Labour Force Survey unemployment rate of 5.2%. By contrast, Ribble Valley had one of the lowest model based unemployment rates in the country at 2.5%.

Model based unemployment rates increased in nine out of the fourteen districts within the Lancashire NUTS-2 Area between the year ending December 2006 and the year ending December 2007. Rates also increased in twelve of the fourteen districts since the year ending December 2004, the exceptions being Lancaster and West Lancashire.

The Burnley model based unemployment rate at 6.8% has increased by the greatest amount, by 1.3%, on the previous year (January 2006 to December 2006). Burnley's rate has also increased by the greatest amount, by 2.3%, since the year ending December 2004, when the rate was 4.5% in the district. Three other East Lancashire districts, Pendle, Hyndburn and Rossendale have increased quite markedly since the recent lows experienced in unemployment in 2004.

Between the year ending December 2004 and the year ending December 2007, unemployment has increased by 0.5 percentage points from 4.7% to 5.2% in the UK, or 14.0%.

By comparison, within the East Lancashire sub-region, the Labour Force Survey estimates reveal that unemployment increased by 75.7%, or 8,100 persons, from 10,700 to 18,800. The rate rose by 3.2%, from 4.4% to 7.6%, above the GB rate. The rate of increase in unemployment was over five times that experienced in the UK. Unemployment also increased by 50.4% between December 2006 and December 2007 in East Lancashire.

Unemployment had, however, decreased quite markedly in the Lancashire West sub region for both of the periods ending December 2004 and December 2006 and the rate was 4.2% for the year ending December 2007 in the West of the County.

Overall, the rate of increase in unemployment in both the Lancashire NUTS-2 area and the County of Lancashire at 21% was also approximately 50% greater than in the UK (14%) since 2004.

Unemployment numbers decreased nationally between the years ending December 2006 and December 2007 by -3.2%, whereas in Lancashire County unemployment increased by 13.2% and by 9.8% in the broader Lancashire NUTS-2 area.

Note: Annual model based unemployment estimates for districts are released approximately five months after the most recent official quarterly Labour Force Survey estimates of unemployment at the UK and North West Regional level. Interpretation of the model based unemployment data should therefore take into consideration how unemployment has changed over the intervening period. Since the January 1997 to December 1997 model based unemployment estimates were released, official unemployment as measured by the Labour Force Survey at the UK level has increased from 5.2% for the three months ending January 2008, to 5.5% in the three months ending July 2008. It is therefore likely that unemployment will now be higher in some, if not the majority, of districts within Lancashire.

Comments and Analysis

Within Lancashire County, the three East Lancashire dsitricts of Burnley (6.8%, +/- 1.0%), Pendle (6.5%, +/- 0.9%), and Hyndburn (6.4%, +/- 1.0%) had model based unemployment rates which were significantly greater (statistically) than the 'official' LFS unemployment rates for Great Britain and the United Kingdom (5.2%, +/- 0.1%) for the period January 2007 to December 2007. Tables 1 and 2 and Figure 1 refer.

The two unitary authorities of Blackpool and Blackburn with Darwen (the 4th East Lancashire district) also had significantly greater model-based unemployment rates than the GB figure. Blackpool's model-based unemployment was estimated at 4,000 (± 400) persons with a rate of 6.5% (±0.6%). The rate in Blackburn with Darwen was 6.4% (+/- 0.6) with 4,100 (+/- 400) persons unemployed. These are amongst the greatest unemployed numbers within the Lancashire NUTS-2 sub-region. Tables 1 and 2 and Figure 1 refer.

It is probable that the model based unemployment rate for Preston is also greater than the GB rate, even though the lower end of Preston's unemployment rate range (confidence interval) overlaps with the GB range. Tables 1 and 2 and Figure 1 refer.

Note: If two rate ranges (or confidence intervals) overlap, this indicates that there is a statistical chance that the rates of the two areas could be the same. Generally, the more that confidence intervals (rate ranges in this instance) overlap, the greater the probability of the two rates being the same.

The model based unemployment rates for both Rossendale and Lancaster fall around the GB rate and cannot be said to be significantly higher or lower than the GB rate as the respective confidence intervals overlap substantially with the GB rate range ((5.2%, +/- 0.1%, or 5.1% to 5.3%). Tables 1 and 2 and Figure 1 refer.

Six districts within Lancashire County, namely, Ribble Valley (2.5%, +/- 0.4%), South Ribble (3.3%, +/- 0.5%), Chorley (3.6%, 0.5%), Wyre (3.6, +/- 0.5%), the Fylde (3.9%, +/- 0.6%) and West Lancashire (4.4%, +/- 0.6%) did however have model-based unemployment rates significantly below the UK, GB and North West rates. All of these districts with the exception of West Lancashire district also had rates below the Lancashire NUTS-2 model based unemployment rate of (5.4%, +/- 0.7%). All six of the previously mentioned Lancashire districts also had significantly lower rates than those in Preston, Hyndburn, Blackburn with Darwen, Pendle, Blackpool and Burnley. Tables 1 and 2 and Figure 1 refer.

Of note, Ribble Valley and South Ribble districts have among the lowest unemployment rates in Great Britain. With model based rates of 2.5%, +/- 0.4% (or 2.1% to 2.9%) for Ribble Valley and 3.3%, +/- 0.5% (or 2.8% to 3.8%) for South Ribble, these districts are two of 86 local authorities (just over a fifth), out of 406, with an estimated model based unemployment rate (including the lower end of confidence intervals) below 3.0% for the year January 2007 to December 2007. Tables 1 and 2, Figure 1 and Data Download refer.

Model-Based Unemployment Estimates Download - Time Series from 1996/97 (RANKED)

Using just the 2.5% model based unemployment rate alone (without taking into account the confidence intervals), Ribble Valley has the second lowest unemployment rate in Great Britain and was ranked in the 5th lowest position, 402nd. Only the districts of Mole Valley, the Vale of White Horse, Cotswold and Aberdeenshire had lower rates of 2.4%. The rankings become somewhat uncertain however, when the confidence intervals of the rates (possible rate ranges) are taken into consideration as the rates have a statistical chance of being the same.

Note: There are 408 LAD/UAs in Great Britain. For this project, and in common with the Labour Force Survey, two local authorities: The Isles of Scilly and The City of London are not included for reasons of disclosure.

Ribble Valley and South Ribble are the only two districts to have model based unemployment rates significantly lower than the Lancashire County LFS unemployment rate of 5.1% (+/- 1.0%). The rates for Chorley and Wyre are, however, also probably lower than the Lancashire County rate as the respective confidence intervals only overlap at the extreme of the possible rate ranges. It should be remembered that there is a statistical chance that they could be the same, however.

Ribble Valley has a lower model based unemployment rate than all other local authorites within the broader Lancashire NUTS-2 area with the exception of South Ribble.

Note: As the lower estimate of the South Ribble unemployment rate (2.8%) overlaps with higher estimate of the Ribble Vallley model based estimate (2.9%), the two rates cannot be said to be significantly different.

Ribble Valley, South Ribble, Chorley and Wyre districts had significantly lower rates than all other Local Authorities within the broader NUTS-2 area, with the exception of the Fylde and West Lancashire.

West Lancashire's model-based estimated unemployment rate is significantly lower than the rates for Preston, Hyndburn, Pendle, Burnley, Blackburn with Darwen and Blackpool, as well as the North West, GB and UK.

The rates in Lancaster and Rossendale were significantly higher than those in Ribble Valley, South Ribble, Chorley and Wyre.

Lancaster's rate is significantly lower than rates in Blackburn with Darwen, Blackpool and Burnley.

Change in District Model Based Unemployment Estimates since the Year Ending December 2006 and the Year Ending December 2004 (Table 1 and Figure 1 refer)

Model based unemployment rates increased in nine out of the fourteen districts within the Lancashire NUTS-2 Area between the year ending December 2006 and the year ending December 2007. Rates increased in twelve out of the fourteen districts since the year ending December 2004. There are however two districts, Lancaster and West Lancashire, where the rates decreased over this period.

Note: Official unemployment as measured by the Labour Force Survey in the UK was below 5.0% for almost two years between autumn 2003 and late summer 2005 and marked a recent low in official unemployment.

The Burnley model based unemployment rate of 6.8% has increased by the greatest amount, by 1.3%, on the previous year (January 2006 to December 2006). The rate in Burnley had also increased by the greatest amount, by 2.3%, since the year ending December 2004, when the rate was 4.5% in the district.

Three other East Lancashire districts, Pendle, Hyndburn and Rossendale have increased quite markedly since the recent lows experienced in unemployment in 2004. Pendle's rate has increased by 2.2% from 4.3%; Hyndburn's rate has increased by 1.9% from 4.5%; and Rossendale's rate has increased by 1.7% from 3.4%. Rates in Hyndburn and Rossendale have also increased quite markedly over the past year, by 1.0% and 0.9%, respectively.

The model based unemployment rate in Blackpool Unitary Authority, whilst only increasing by 0.4 over the past year, has increased by 1.6% since the year ending December 2004, from 4.9%. The rate in Blackburn with Darwen recorded a yearly fall of -0.1% since the year ending December 2006, but has increased by 1.2%, from 5.2%, since the year January 2004 to December 2004.

The greatest increase in the actual number of unemployed persons since the year ending December 2004 was in Pendle district, which saw a rise of 1,000 persons, or an increase of 55.6 percent.

Fylde and Rossendale districts, whilst starting from relatively low estimated rates of model based unemployment in the year ending December 2004 have seen quite marked increases in the number unemployed in percentage terms. Unemployed persons in the Fylde district increased by 600 persons from 900 in the year ending December 2004 to 1,500 in the year ending December 2007, a rise of 66.7%. Unemployment remains relatively low in the Fylde district, however, at 3.9%, +/- 0.6%. The number unemployed in Rossendale increased by 63.6%, or 700 persons, over the same period, from 1,100 in the year to December 2004, to 1,800 in the year ending December 2007. The model based unemployment rate in Rossendale at 5.1%, +/- 0.8%, was roughly similar to the national rate of 5.2%, +/- 0.1%, for the year ending December 2007. These two districts have seen their position deteriorate over the previous year as well.

Change in the 'Official' Annual Population Survey - Labour Force Survey Unemployment Estimates since the Year Ending December 2006 (Table 2 and Figure 1 refer)

In the UK between the year ending December 2006 and the year ending December 2007, unemployment decreased by -0.2 percentage points from 5.4% to 5.2%.

Contrary to this, however, within the East Lancashire sub-region, unemployment increased quite substantially by 2.5%, from 5.1% to 7.6%. This equated to an increase in unemployed persons of 6,300 within East Lancashire between the two periods and put the East Lancashire unemployment rate almost 50% higher (46.2%) than the UK rate.

Unemployment also increased over the same period, although at a lower rate, within the North West by 0.3 percentage points to 5.6%; within the broader Lancashire NUTS-2 area by 0.4 percentage points to 5.4%; and within Lancashire County by 0.5 percentage points to 5.1%.

The Lancashire West sub region by contrast to East Lancashire experienced a decrease in the official unemployment rate of -0.7 percentage points, from 4.9% to 4.2%. This equated to a drop of -3,000 person, or -13.5%.

Note: Totals of unemployed persons within the Model Based estimates of Unemployment and the 'Official' Annual Population Survey - Labour Force Survey Unemployment Estimates differ and do not sum exactly as they use different methodologies.

Change in the 'Official' Annual Population Survey - Labour Force Survey Unemployment Estimates since the Year Ending December 2004 (Table 2 and Figure 1 refer)

Between the year ending December 2004 and the year ending December 2007, unemployment has increased by 0.5 percentage points from 4.7% to 5.2% in the UK, or 14.0%.

Again, unemployment increased at a substantially greater pace within the East Lancashire sub-region than the UK, rising by 3.2%, from 4.4% to 7.6% over this period. This equated to an increase in unemployed persons of 8,100 within East Lancashire, from 10,700 to 18,800, or 75.7%, between the two periods. The rate of increase in unemployment was over five times that experienced in the UK.

In the North West, unemployment also increased at a greater pace than the UK, roughly double, increasing by 1% from 4.6% to 6.1%, or 27.6%.

The rate of increase in unemployment was also approximately 50% greater in both the Lancashire NUTS-2 area and Lancashire County than in the UK. Unemployment increased by 5,200, or 0.6 percentage points from 4.5% to 5.1%, or 21% between the year ending December 2004 and the year ending December 2007

Important note on using the estimates to monitor changes over time

The APS (on which these estimates are based) is published quarterly, but with each publication including data for one year. The four publications per year cover the periods January to December; April to March of the following year; July to June of the following year; and October to September of the following year. Three quarters of the survey observations included in one publication will therefore be included in the following publication.

The model-based unemployment estimates (and the direct APS survey estimates) represent valid estimates for the period to which they refer but because, as explained above, estimates from consecutive quarters are based on common observations they are not independent, and should not be used for comparisons over time. Comparisons over time for say the latest annual estimate should only be made using estimates for the same period a year earlier, as the data for these two periods will not include any common observations.

Furthermore, the confidence interval which should be applied to a measure of change will be larger than that for the individual estimates. The calculation for this is given in the detailed User Guide The detailed user guide, general guidance and additional information on the model based estimates of unemployment can be obtained from the following webpage on the (External) Office for National Statistics website .

Model-Based Unemployment Estimates Download - Time Series from 1996/97 (RANKED)

This page was compiled by Ann Weaver and Paul Ayre .

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Any other questions about the content of this page may be sent to EconInfo@lancashire.gov.uk .

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