The State of Britain

A refreshed Midland’s Engine strategy promised by the autumn and new regional GDP figures from the ONS ranks the East Midlands first

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The Ministry of Housing, Communities and Local Government has published its deprivation index which looks at an area’s levels of income, employment, education, health and crime as well as housing services and living environment. Jaywick in Essex, near Clacton-on-Sea, was previously found to be the most deprived in the last two reports in 2010 and 2015 and it has won this unwelcome accolade again. Jaywick is followed by nine areas of the North West as the most deprived in England, part of Gainsborough is the first EM entry ranked 24th. The Ministry divides England up into 32,844 neighbourhoods averaging about 1,500 residents or 650 households each.

In terms of local authorities, 31% of Nottingham was classified as deprived which ranked the city 15th worst in the UK but no other EM local authority made the top 32. In terms of performance since 2015, one area of the EM has seen deprivation accelerate the fastest in the UK. Mansfield was ranked fourth and saw deprivation increase by c6%.

Mansfield is one of the EM towns invited to apply for regeneration funding as part of the £3.6bn Towns Fund which is targeted at 100 English towns. Towns must submit economic growth plans with a focus on improved transport, broadband connectivity, skills and culture. The Midlands were also awarded £21.1m as part of a £95m pot to revive historic high streets, with Leicester, Newark and Grantham some of the half dozen or so EM towns that will benefit.

During a tour of Bombardier in Derby, Midlands Minister Robert Jenrick, announced the government’s commitment to further devolution deals across the region. He also undertook to deliver a new Midlands Engine Strategy this autumn which will be written in partnership with the region.

Construction work continues while the HS2 review is ongoing but if HS2 does goes ahead, the first phase between London and Birmingham will be delayed by up to five years, Transport Secretary, Grant Shapps, has confirmed. That section of the line was due to open at the end of 2026, but it could now be between 2028 and 2031 before the first trains run on the route. Undeterred, regional transport body Midlands Connect, has submitted proposals to the Department for Transport (DfT) for a 33-minute service between Birmingham and Nottingham and a 90-minute connection from Leeds and Bedford via Leicester. Trains between Birmingham and Nottingham currently take c70 minutes, whilst Leeds and Leicester takes two hours plus. The DfT said an independent review will consider Midlands Connect’s submission; HS2’s total cost has risen from £62bn to between £81bn and £88bn.

In the air, services from the East Midlands to Brussels have restarted after the route was lost when Flybmi went into administration. Loganair will operate the route six days a week after Burnaston-based Toyota offered assurances it would use it regularly. Loganair will also fly to and from Inverness.

A Jaguar Land Rover distribution centre in Appleby Magna will go ahead on a 238-acre site at junction 11 of the M42. The new facility will service 80 countries, create 1,200 immediate jobs with 3,000 forecast by 2030. JLR said it would consolidate work of 10 sites, cut their vehicle movements, and improve efficiency. Work on the site could start in 2020 and be completed in 2023. When fully operational, developers say the project will contribute an additional £139m pa to the region.

Car dealer Pendragon is to cut c300 jobs and close more than 20 showrooms. The firm confirmed it will shut nearly two thirds of the Car Store chain, with just 12 of its 34 branches surviving. The firm also trades under the Evans Halshaw and Stratstone brands and is one of Nottinghamshire’s largest companies.

A labelling error which resulted in a firm recalling several brands and flavours of popcorn because they may have contained milk, led to significant losses which has consequently led to its administration. Nottinghamshire-based Thomas Tucker supplied snacks and sweets to cinemas and supermarkets across the UK. The underlying cause was disputed but the company agreed a voluntary product recall following an investigation by the Food Standards Agency. The administrator hopes to sell the firm as a going concern but of the 116 headcount, 64 staff have so far lost their jobs.

The Stats
For the first time, the ONS has published quarterly GDP estimates for the East Midlands, the eight other English regions and Wales. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013. The latest available figures, which are for the year ended 2018, showed the EM economy grew by 3.4%. This ranked the EM top out of the twelve UK ‘regions.’ At the bottom of the league the South West economy declined by 1.1%. UK growth over the same period was 1.5%.

The quarter to Dec 2018 showed the professional, scientific and technical industry grew by 6.5% and made the largest positive contribution to growth but education fell by 7.9% and made the largest negative contribution. Each of the three main sectors (production, construction and services) all grew but construction was the main driver with production and services virtually at a standstill. More recent estimates (six months later) for the year ended June 2019, published by ESCoE last month, ranked the EM ninth with growth of 1.2%, which suggests the March ‘Brexit’ slowdown has hit the region harder relative to other parts of the UK.

More data from the ONS showed unemployment in the EM increased by 10,000 to 115,000 between May and July, the uplift of 0.3% took the overall rate to 4.6%. The South West had the lowest rate at 2.4% with the UK rate at 3.8%. The highest rate was 5.0% which was recorded in the North East. The South West also had the highest employment rate at 80.8% which compared with 76.9% in the EM. UK employment was estimated at 76.1%.

EM average property prices increased by 0.3% to £194,798, which took annual growth to 1.9%. In comparison, UK prices grew by 0.5% to £232,710 during July, an annual growth rate of 0.7%.