The State of Britain

NW

Addlington and Dudlow’s Green the wealthiest parts of the region with Blackpool South the poorest, Cheshire and Warrington LEP the most productive but the best growth seen in Lancashire

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The ONS has published average household disposal income estimates for England and Wales for 2018. The incomes shown are after tax and housing costs are taken off. The analysis has shown that 87% of local areas had an average household income of between £22,500 and £39,200; within this over a third were between £28,000 and £33,600.

Of the 50 areas with the highest total incomes, 41 were in London, with the lowest incomes more widely spread across England and Wales. The North East, East England, London, and the South East had no local areas in the bottom 50.

The wealthiest area in England and Wales was Mickleover in Derby with incomes of £52,200 and the poorest was Highfield North in Leicester with £12,500. The two areas are 30 miles from each other and ranked 7200 places apart.

The wealthiest areas of the North West were the Addlington area of Cheshire and the Dudlow’s Green of Warrington with incomes of £39,800. This ranked the areas 184th out of the 7,201 districts of the UK recorded. The poorest area of the region was Blackpool South with £13,300. This area was ranked 7,199 out of the 7,201 areas of the UK recorded.

Last month the ONS published analysis which showed that like most regions of the UK, output per hour in the NW is below the UK average. Productivity per hour in the NW was 8.4% below the UK average which ranked the region fifth nationally for 2018. One reason for this is the high levels of hours worked and high productivity in London and the South East which pulls up the UK average so much that all other regions fall below it.  

The ONS has now released data for a longer period and at a subregional level. This gives further insight into the NW’s performance.

First, the 2018 results for the 44 enterprise regions in the UK, which comprise the 38 English local enterprise partnerships (LEPs) and six enterprise regions in Scotland, Wales and the border regions.

Thames Valley Berkshire LEP had the best productivity (in terms of hours) in 2018 at 35% above the UK average, whereas the Black Country LEP at -24% was the worst.

At +6%, the Cheshire and Warrington LEP was one of eight economic regions which beat the UK average and was ranked 5th, all of the NW’s other LEPs recorded productivity below the UK average. Liverpool City region was 19th at 8% below, Lancashire LEP 23rd and Greater Manchester 25th at -11% but the worst regional performer was Cumbria at -14% which ranked it 29th.

In terms of productivity growth between 2010 and 2018, the Coventry and Warwickshire LEP was top with growth of 16%. Twelve economic regions recorded productivity levels lower in 2018 than 2010. The worst performer was the Buckinghamshire Thames Valley LEP which saw productivity drop by 11%.

The NW’s results for productivity growth (rather than overall productivity) were more mixed. With growth of 8.8% Lancashire was the regional star and was ranked 3rd nationally, just beating Cumbria which was ranked fourth with 7.5% growth. Cheshire and Warrington LEP grew by 3.8% and was ranked 15th but the region’s other two LEPs recorded productivity levels lower in 2018 than 2010. Greater Manchester was -0.5% and was ranked 36th which was four places better than Liverpool City region at -3.3%.

On subregions rather then enterprise areas, with the exception of Cheshire East (+8%) and Greater Manchester South West (+0.3%), all of the NW’s subregions recorded productivity below the UK average. Greater Manchester North East had the lowest productivity in the region, 27% below the UK average.

The growth in hours worked between 2010 and 2018 in Greater Manchester was 17%, just beating Cheshire which recorded 16%. In UK terms this level of growth was in the top ten of the country’s 41 subregions. Merseyside grew by 9% and Lancashire by 7% but Cumbria recorded a decline of 3.7%, the only part of the UK to do so.

If the increase in economic output is factored in then the sub regional performances are similar to the geographically associated LEPs. So despite Cumbria recording a decline of 3.7% in hours worked, it was ranked 7th in the UK with growth of c8%.

More data from the ONS showed unemployment in the region was 16,000 higher at 163,000 between November and January; the uplift of 0.4% took the rate to 4.4%. Northern Ireland had the lowest rate of 2.4%, the North East the highest at 6.2%, with the UK rate at 3.9%.

The South East had the highest employment rate at 80% which compared with 75.8% in the NW where 3.5m are employed; the UK rate was 76.5%.

The NW’s average property price decreased by 1.5% to £164,769 during the month which took the annual increase to 2.1%. In comparison, UK prices decreased by 1.1% to £231,185 during January, an annual growth rate of 1.3%.

Take your pick, depending on the period the NW economy ranked third or last in terms of growth, the region’s productivity ranked fifth in the UK despite no growth

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For the 12 months ended December 2019, a nowcast published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that NW growth has increased from 1.7% to 2%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the NW third (previous ranking also third) and suggests the region has maintained its position relative to the other eleven parts of the UK. Over the same period UK growth was 1.4%; growth in London (ranked first) was 3.3%; and growth in the East Midlands (ranked twelfth) was 0.1%.

Official ONS figures for an earlier period are not so good. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the North West, the other eight English regions, and Wales.  GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These figures are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended June 2019 with the same quarter a year earlier.

These more volatile figures showed the NW contracted by 0.7%, down from +1.8% the previous quarter. This placed the NW last (previous ranking sixth) out of the twelve UK ‘regions.’

London topped the table with growth of 4.5% whilst UK growth over the same period was 1.4%. The NW was one of three in the UK to suffer a decline.

In the same report, there was no surprise that the ONS’s figures also highlighted that the standalone quarter to June 2019 was worse for the region than the previous quarter. The North West economy declined by 1.6% in April to June 2019, following growth of 0.8% in January to March 2019.

This placed the NW joint last (previous ranking third) out of the twelve UK ‘regions. Six regions of the UK saw their economies contract as did the UK overall by 0.2%.

In this period, the region’s finance industry grew by 4.0% and was the largest positive contributor to growth whereas water supply; sewerage, waste management and remediation activities fell by 27.6%. In the main, the production sector was the main drag on growth with manufacturing falling by 7.3%.

Overall, the services sector grew by 0.4% but this was weighed down by the production, construction and agriculture sectors which fell by 8.3%, 5.4% and 2.0% respectively. Over the last two years the construction sector has had strong growth.

Productivity

Like most regions of the UK, output per hour in the NW was below the UK average. Productivity in the NW was 8.4% below the average which ranked the region fifth in the UK according to the ONS.

Two regions had productivity above the UK average in 2018, London +31.6% and the South East +9.1%. These regions record high levels of hours worked and their high productivity pulls up the UK average so much that all other regions fall below it. Wales was furthest off the average at -17.2%.

The NW was also ranked fifth in terms of output per job. The region’s 15.8% below the UK average compared with London at 40.5% above.

In terms of growth in output per hour, six regions of the UK expanded. The NW was ranked seventh as output per hour contracted by 0.4%. At 2.3%, growth was fastest in Scotland and the biggest contraction was in Yorkshire and the Humber at 2.5%. UK growth was 0.5%.

In terms of sectors, productivity in arts, entertainment and recreation was better than expected but finance and insurance disappointed.

On average, in 2018 the UK economy produced about £35 of value for each hour worked, with finance and insurance top at c£69 per hour compared with accommodation and service activities productivity at c£17 per hour.

Labour

More data from the ONS showed unemployment in the region increased by 4,000 to 157,000 between October and December; the slight uplift took the rate to 4.2%. Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.8%. The highest rate was 6.1% which was recorded in the North East.

The South West had the highest employment rate at 80.1% which compared with 75.9% in the NW where 3.5m are employed; the UK rate was 76.5%.

In December, average earnings in the NW were unchanged at £595 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. The NW was ranked sixth.

In the UK overall, average earnings grew by 2.9% or by 1.4% after inflation. After adjusting for inflation, regular pay is now at its highest level since 2000, whereas total pay (which includes bonuses) is still 3.7% below its peak in February 2008.

Housing

The NW’s average property price decreased by 0.6% over the month to £166,003, the drop took the annual increase to 2%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.

The NW records the largest fiscal deficit in the UK, the region’s property prices jump and mini nuclear power stations in Cumbria

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In the ONS’s estimate of regional public spending and regional tax revenues in 2019, the NW had a deficit of £20.1bn, a lower shortfall than the £21.7bn recorded in 2018 but still the largest deficit in the UK. This compared with London, which had the highest surplus of £38.9bn.

On a per person basis, the NW’s deficit was £2,762, lower than the £2,988 recorded in 2018. London had the highest surplus of £4,369 per person whereas Northern Ireland had the biggest shortfall at £4,978.

The only areas of the UK to run surpluses were London, the SE of England and the East of England. The West Midlands and the North East were the two regions in the UK to increase their net fiscal deficits over the year; the other seven regions reduced their shortfalls.

At a national level, the UK had a deficit of £623 per person which splits into deficits of £68, £2,713, £4,289 and £4,978 for England, Scotland, Wales and Northern Ireland respectively.

Public spending in the NW was £94.4bn or £13,560 per head, an increase on the 2018 figure of £92.7bn. London had the biggest spend of £123.9bn or £13,826 per head whereas Northern Ireland had the lowest at £27.9bn or £14,821 per head. Total government spending was £853bn or £12,835 per head.

The NW collected £74.1bn in taxes in 2019. London contributed the most to the Exchequer at £161.9bn, compared with the lowest contribution of £18.5bn which was from Northern Ireland. Overall the state raised £811.3bn or £12,213 per head in taxes an uplift of £34.1bn or £461 per head compared with 2018.

More data from the ONS showed unemployment in the NW increased by 6,000 to 154,000 between September and November 2019; the increase of 0.1% took the overall rate to 4.2%. Northern Ireland had the lowest rate at 2.3%, the North East the highest at 6.2% with the UK rate at 3.8%.

The South West had the highest employment rate at 79.8% which compared with 76.2% in the NW. UK employment was estimated at 76.3%.

NW average property prices jumped by 1.1% during November 2019 to £169,362, which took annual growth to 3.8%. In comparison, UK prices increased by 0.4% to £235,298 an annual growth rate of 2.2%.

On development, Rolls-Royce plans to install and operate factory-built mini nuclear power stations by 2029. The power plants can be mass manufactured and delivered in sections by road.

The firm is confident that mini reactors can compete on price with renewables such as offshore wind and that between 10 and 15 of the stations in the UK could be viable. Former nuclear sites in Cumbria would be suited to build the small modular reactors (SMRs) which are about 1.5 acres in size.

A £13m museum highlighting Blackpool’s role in British entertainment will be based within the Sands Venue Resort Hotel – the town’s first five-star hotel – on the Golden Mile. The regeneration project hopes to attract c300,000 visitors annually and create the equivalent of 40 full-time jobs. Funding has come from the Northern Cultural Regeneration Fund (£4m), from the Coastal Communities Fund (£1.75m) and the Lancashire Growth Deal (£1.5m) amongst others.

On transport, the Office of Rail and Road (ORR) is investigating Network Rail over its poor service on routes used by commuter favourites Northern and TransPennine Express. Network Rail owns and operates rail infrastructure in England, Wales and Scotland.

The ORR said the proportion of scheduled train stops made on time in the last 12 months up to 4 January by Northern was 55% and 41% by TransPennine Express. This compares to the national average of 65%.

Early in January, Transport Secretary, Grant Shapps, announced he was evaluating a proposal from Northern Rail for options for continuing its franchise after the minister said the firm had the finances to continue only for a number of months. Then he surprisingly followed through and nationalised the firm, which consequently threw the Transpennine franchise into sharper focus.

On HS2, the Department for Transport and HS2 Ltd did not allow for all uncertainties when estimating initial costs the National Audit Office (NAO) has said. In 2015, HS2 was due to cost £56bn but a leaked government report suggested the total could reach £106bn. At this cost the decision whether to proceed or not will be taken at Prime Ministerial level next month.

On Merseyside, Jaguar Land Rover is cutting 500 jobs at its Halewood plant when it moves from three shifts to two a day. The factory makes the Evoque and Discovery Sport models and currently employs c4,000.

Administrators Deloitte have said 55 jobs will be lost in Alston, Cumbria, after they could not find a buyer for iron and steel castings producer the Bondshold Group. And in Nelson, Lancashire, packaging firm Mondi has announced plans to close its factory in the second half of 2020; 41 staff are affected. The plant creates bags, pouches and laminates for the consumer industry.

NW economic growth in 2018 ranked fourth, the Greater Manchester South West economy the fastest growing in the region but Sefton posts one of lowest GDPs per head in the UK, Cumbria’s LEP sinks down the rankings as the economy declines by 0.7%.

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Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its 2018 full year estimate of economic activity by UK country, region and local area using gross domestic product.

The figures showed the NW economy grew by 1.4% in 2018, down from the 2017 growth rate of 2.4%. This placed the NW fourth (2017 ranking also fourth) out of the twelve UK ‘regions.’

The UK and England growth rate in 2018 was also 1.4%. Growth in Wales was 1.3%, Scotland grew by 0.9% and the Northern Ireland economy shrank by 0.5%.

London topped the 2018 table with growth of 2.0% whilst Northern Ireland was at the bottom.

Within the region, the Greater Manchester South West economy grew the fastest at 4.9%, followed by Cheshire East at 4.5% and East Merseyside at 3.5%. Across the UK, the highest annual growth of sub national areas was in Falkirk at 10.5%.

Five areas of the region saw their GDP decline in 2018. The worst performer was the Wirral at -3.6% followed by Blackburn with Darwen at -2.9% and East Cumbria at -1.6%. In UK terms, the lowest annual growth of subnational areas was in Mid and East Antrim at -10.1%.

GDP per head growth of 4.1% to £37,067 was seen in Greater Manchester South West although Central Manchester was top at £44,781. GDP per head fell by 3.7% in the Wirral but at £17,850 Sefton posted the 5th lowest GDP per head in the UK, with Greater Manchester North East only two places better.

In terms of UK extremes, GDP per head was £395,309 in Camden and the City of London and £15,034 in Ards and North Down. These figures are a guide and are influenced by commuter flows.

In 2018, key drivers of the North West economy were mining at 11% and support services and information and communication both at 6%. Those areas that did not perform well were agriculture down by 8%, financial services down 4% and water supply and services also declined by 2%. Overall the services sector grew by 1.7% and production by 0.5% with construction declining by 0.1%.

The 2018 performance of the region’s enterprise partnerships was also highlighted by the ONS. Of the UK’s 45 development bodies, Greater Manchester LEP was ranked 13th in the UK (2017 ranking ninth) with growth of 1.7%, with Cheshire and Warrington ranked 15th and Liverpool City Region ranked 18th. The best regional performer was the Lancashire LEP at 22nd (2017 ranking 40th) with growth of 1.2%, but the Cumbria LEP slipped from 17th in 2017 to 41st in 2018 as the economy declined by 0.7%.

More data from the ONS showed unemployment in the NW fell by 10,000 to 146,000 between August and October 2019; the decrease of 0.2% took the overall rate to 4.0%. Northern Ireland had the lowest rate at 2.3% with the UK rate at 3.8%. The highest rate was 6.1% which was recorded in the North East.

The South West had the highest employment rate at 80.8% which compared with 75.7% in the NW. UK employment was estimated at 76.2%.

NW average property prices fell by 0.6% during October 2019 to £166,134, which took annual growth to 1.4%. In comparison, UK prices fell by 0.7% to £232,944, an annual growth rate of 0.7%.

The NW economy ranked third, the region tops house price growth, and competition concerns on the West Coast mainline

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Ministers have called a halt to fracking following a report from the Oil and Gas Authority. The authority raised concerns about the ability to predict fracking-linked earthquakes.

Cuadrilla had already suspended work at its Preston New Road site in Lancashire after a series of tremors.

The effective moratorium will be maintained until new evidence is provided which addresses the concerns around the prediction and management of induced seismicity.

An assessment by the British Geological Survey in 2013 suggested there were enough resources in the Bowland resource across northern England to potentially provide up to 50 years of current gas demand.

On transport, West Coast Rail, a joint venture between FirstGroup and Italian firm Trenitali, will take over the running of the West Coast Mainline next month, replacing Virgin, which was barred from bidding.  FirstGroup also operates TransPennine Express which is Virgin’s only competitor on most of the northern part of the route.

The Competition and Markets Authority has raised concerns ticket prices could rise under the new franchise. The Authority said that on 21 routes, passengers would have little or no option but to choose a service run by FirstGroup. The Authority’s investigation into the new contract is ongoing.

TransPennine Express, has, however, unveiled a new £500m fleet of trains promising to increase capacity by 80% on routes in the North West. The investment over two years in the new Nova fleet will see 44 new trains run between Liverpool, Manchester, Newcastle and Edinburgh.

In September, a report by Transport for the North, found an increase in both late and cancelled services on TransPennine Express and Northern rail services compared with 2018. TPE blamed its worsening performance largely on weather events such as flooding and extreme heat.

Fewer than half of Northern rail services ran on time last month, the firm’s own figures have now shown. Only 45.4% of its trains arrived within a minute of their scheduled times between 11 October to 8 November.

Most commuters will put up with a short delay but cancellations for Northern are now at the highest level since late summer, with 5.2% of services abandoned, compared to 4.4% between July and August. Last month, Transport Secretary, Grant Shapps, mooted putting the company into public ownership if problems persist.

The Stats

Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its next estimates for the North West, the other eight English regions, and Wales, for the year to March 2019. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

The latest available figures showed the NW economy grew by 1.8%, up from 0.5% the previous quarter. This placed the NW sixth (previous ranking tenth) out of the twelve UK ‘regions.’

London topped the table with growth of 4.2% whilst at the bottom the Yorkshire and Humberside economy declined by 0.3%. Propelled by a drive to meet the original March 31st Brexit date, UK growth over the same period was 2.2%.

The ONS figures also highlighted that the quarter to March 2019 was far better for the region than the previous quarter. The North West economy grew by 1.0% in January to March 2019, following negative growth of 0.2% in October to December 2018.

In this period, the manufacturing industry grew by 6.7% and was the largest positive contributor to growth whereas education fell by 4.7%. Overall the services sector was the only drag on growth. The other three sectors, agriculture, production and construction, contributed positively.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked the NW third (previous ranking fourth)  with growth of 1.7%, which suggests the region has had a better summer relative to other parts of the UK.

Using this metric, UK growth was 1.45%. Growth in London (ranked first) was 2.32%, which compared with the South West of England (bottom) at 0.41%

More data from the ONS showed unemployment in the NW fell by 5,000 to 153,000 between July and September; the small decrease of 0.1% took the overall rate to 4.2%. Northern Ireland had the lowest rate at 2.5% with the UK rate at 3.8%. The highest rate was 5.9% which was recorded in the North East.

The South West had the highest employment rate at 81.0% which compared with 75.3% in the NW. UK employment was estimated at 76.0%.

In September, average earnings in the North West were up by £20 to £595 per week. London had the highest average earnings of £830. The lowest average earnings of £527 were recorded in Wales. In the UK overall, average earnings grew by 3.6% or by 1.8% after inflation.

NW average property prices fell by 0.3% to £167,683, which took annual growth to 2.8% which was the highest in Great Britain. In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%.

Significant NW house price growth, HS2 concerns and North Westerners feel less anxious

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Unemployment in the NW decreased by 2,000 to 148,000 between June and August, which left the overall rate at 4.1%.

The South West continued to record the lowest rate at 2.4% with the UK rate at 3.9%. The highest rate was 5.8% which was recorded in the North East.

The South West also had the highest employment rate at 81.0% which compared with 74.5% in the NW. UK employment was estimated at 75.9%.

NW average property prices increased by 1.3% to £168,221, which took annual growth to 3.1%, which was the second highest in England. In comparison, UK prices grew by 0.8% to £234,853 during August, an annual growth rate of 1.3%.

Analysis by the BBC has found workers living in seaside areas in Great Britain earn on average £1,600 less per year than those living inland. Since 2010 wages fell by c25% in real terms in Wirral West, the biggest drop in the UK.

Overall, in coastal constituencies median wages were £22,104 compared with £23,785 in non-coastal areas. Despite this, average pay in the Wirral is c£30,000, close to the UK average and higher than the regional norm.

The ONS’s Personal Well-being (or Happiness) Index has ranked the NW third out of the 12 UK ‘regions’, only Londoners and Geordies’ happiness improved more. Average anxiety has also improved most in the NW over the last six years.

Overall though, the Northern Irish were still the happiest in the UK with Londoners still the most miserable.

Development

A National Audit Office (‘NAO’) report has highlighted that rolling out fracking in England has been slower than expected. In 2016, the government forecast that up to 20 wells would be fracked by mid-2020, but only three have been operational. Two of the functioning wells are in Lancashire.

The industry told the NAO that slow progress on fracking was partly due to the need to halt fracking activity if there is a tremor greater than 0.5 on the Richter scale. This compares with 4.0 in the US where the technology has revolutionised the US energy industry.

A key scientific assessment of recent industry data by the Oil and Gas Authority is highly anticipated. The UK has spent £32.7m supporting fracking since 2011.

Nothing highlights the need for regeneration more than a derelict theme park, and the deserted Frontierland in Morecambe is no exception. Plans to set up a £17m retail park, hotel and pub were approved in 2015 but now Lancaster City Council has asked developers their intentions after time to complete the project expired.

In Manchester, plans to create the first public park for more than 90 years have been submitted to the city council. Mayfield Park would be a 6.5 acre public space close to Piccadilly station and part of a £1.4bn plan to regenerate a run-down area south of Fairfield Street. Work is expected to start in 2020 and will take up to 15 years to complete.

If a derelict theme park signals a regeneration need, does a city obtaining its first Michelin star restaurant suggest ‘job done?’ Manchester now has its first Michelin star restaurant in more than 40 years. The French, in The Midland Hotel, had a star from 1974 until 1977, but now Mana, in Ancoats, has been awarded one.

Transport

The Northern Powerhouse Partnership’s Independent review into HS2 ‘HS2 North’ was introduced in Parliament this month by the Northern Powerhouse All Party Parliamentary Group.

The key recommendation of the report is the establishment of HS2 North, a private sector special purpose vehicle modelled on the Olympic Delivery Authority which would integrate HS2 and Northern Powerhouse Rail.

HS2 North would be arms-length from government, contracting with private sector delivery partners and Network Rail, and overseen by Transport for the North.

Whilst no one doubts that HS2 will bring significant benefits to the Northern economy, this report, and a second Northern Powerhouse Partnership report, ‘HS2 and the Economy of the North’, identifies that further detailed work needs to be undertaken to pin down the economic benefits that the new line would bring.

Separately, CBI East Midlands, West Midlands, Yorkshire and Humber, London, the North East and North West regional directors also urged the government to build the HS2 rail project in full.

However, a paper by the Adam Smith Institute, also released this month, claims that HS2 will deliver limited benefits and that some Northern cities could lose direct trains to London.

The instead recommends upgrading existing routes with new signalling, doubling the number of tracks, reopening mothballed lines, building new sections of railway and targeting bottlenecks at key junctions.

Also on the trains, the government is considering whether the management of Northern Rail should be taken into public hands. The Department for Transport confirmed it was developing contingency plans with either a new short-term management contract with Northern or the Operator of Last Resort (‘OLR’) (effectively the Government).

The OLR is currently in charge of London North East Railway, the East Coast Mainline intercity franchise. Northern is a large, more complex commuter network, so the government is likely to take-on a more supervisory role, with Northern still able to run day-to-day services and take the blame.

In a bad month for Northern, politicians demanded that passengers still having to use the 1980s-built rail-buses called Pacer trains, should be offered reduced fares. Northern had planned to withdraw them all by the end of this year but some will be retained into 2020 as a result of delays in the construction and delivery of new trains from manufacturer CAF.

The Pacers, a joint venture between British Rail and British Leyland, were originally constructed from the body of a bus and were intended to have a maximum lifespan of 20 years. In fairness though, the Pacer is a survivor, other British Leyland vehicles from the 1980s like the Austin Maxi and Morris Marina have long gone.

Jobs

Plans to redevelop Santander’s Bootle base into a £75m complex have been approved. The Merseyside site will become the bank’s contact centre and UK operations hub from 2022, employing more than 2,500 staff.

The existing Bootle site, originally GiroBank’s HQ from 1968, will be demolished to make way for the environmentally sustainable complex which will accommodate sporting and social facilities.

In Blackpool, c100 staff at The Silver Line, a charity set up by Dame Esther Rantzen in 2013 to combat loneliness among the over-65s, have been safeguarded following a merger with Age UK.

The Silver Line receives over 10,000 calls a week, and its befriending services support 2,000 older people.

Deprivation in Oldham accelerates fastest in the UK but in Copeland it falls significantly, the latest ONS figures flag the North West’s mediocre economic performance

Reading Time: 4 minutesThe Ministry of Housing, Communities and Local Government (MHCLG) 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 eight areas of Blackpool then, despite the wealth passing through it, Anfield as the tenth most deprived part of England. The Ministry divides England up into 32,844 neighbourhoods averaging about 1,500 residents or 650 households each.

In terms of local authorities, at 49%, Liverpool had the second largest share of the most deprived areas, Knowsley was ranked third with 47%, on 43% Manchester was fifth, Blackpool, Burnley and Blackburn also made the top ten. In terms of performance since 2015, five areas of the North West have seen deprivation accelerate the fastest in the UK. Oldham topped the list and saw deprivation increase by c8%, with Rossendale, Blackburn,Halton and Burnley all making the top seven. In Copeland, deprivation fell by c6%, the tenth fastest fall in the UK, and was the regional star performer.

The MHCLG found concentrations of deprivation in a number of coastal towns, many of which are in the North West, and there was new money for the region in the latest tranche from the Coastal Communities Fund, with Whitehaven a winner. The North West was also awarded £18.7m as part of a £95m pot to revive historic high streets, with Blackpool, Maryport and Wigan some of the dozen or so NW towns that will benefit.

Delegates who attended the Convention of the North at the ‘Magnum Centre’ in Rotherham were first treated to Latin ice cream jokes before the PM outlined plans to give Northern Mayors and combined authorities more control over setting local train fares, timetables and budgets. He cited his experience as Mayor of London as evidence of how transport in London improved when devolved from central government. At county level, he also floated the idea that councils or community partnerships could take control of branch lines and their stations.

Transport
It is difficult to see how rail reforms could make services much worse, after a report by Transport for the North found Northern and TransPennine Express (TPE) services worse than they were a year ago when they were disrupted by timetabling chaos. More services were either late or cancelled in July and August than the previous year the report found, with the rail firms pointing to weather events such as flooding and extreme heat as mitigating factors. The percentage of TPE trains running on time dropped to 70.9% between 21 July and 17 August from 75.7% in the same period last year, with an average of 42 trains cancelled daily, representing 12.9% of services. At Northern, punctuality fell to 79.4% from 82.2%, with an average of 139 trains cancelled each day, representing 5.3% of services. The latest National Rail Passenger Survey of the 25 UK rail companies ranked Northern 23rd and TPE 18th. Last month, popular Virgin Trains, which was ranked second with a 91% satisfaction rating by passengers, lost its franchise to TPE’s parent.

Liverpool Combined Authority has unveiled a £172.5m wish list of transport improvements, plans include the first new Mersey ferries for 60 years. Two new vessels, new bridges and an updated landing stage at the Seacombe terminal are envisaged. Other projects being considered include, new Merseyrail stations at St James Gateway in Liverpool and Headbolt Lane in Kirkby; expansion of Lime Street ahead of HS2; station improvements at Birkenhead Central, Runcorn and Lea Green and a new 600km cycle route across the city region.

Liverpool City Council has sold half of its stake in Liverpool John Lennon Airport. Investment management company, Ancala Partners, has acquired 45% of the airport, 10% from the council and 35% from the Peel Group. Peel retains 45% of its stake and the council 10%. Financial details of the deal are not available but the council’s orderly exit suggests its intervention in 2016 has been successful. The airport is the UK’s 12th busiest serving c5m passengers last year.

Interventions
A less successful £15m intervention by Carlisle City Council to revamp a rundown estate in the city which was eventually knocked down anyway is likely to cost more than £50m in total. The authority took out an interest-only loan in 1995 which now needs to be refinanced. The council has a revenue budget of c£11m a year. Also in the city, plans have been unveiled for a £15m upgrade of Carlisle railway station. This £15m is part of the £350m Borderlands Inclusive Growth Deal rather than an interest only loan.

Jobs
Total Polyfilm Ltd, which has sites in Bamber Bridge and Preston has ceased production. The firm produced polythene wrap for agriculture and industry but lost key customers after a fire in 2016. Seventeen jobs have been retained to assist the administrators with the winding-down of operations but over 200 staff have been made redundant.

The Stats
For the first time, the ONS has published quarterly GDP estimates for the North West, the other eight 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 NW economy grew by 0.5%. This ranked the NW tenth out of the twelve UK ‘regions.’ The East Midlands topped the table with growth of 3.4% whilst at the bottom the South West economy declined by 1.1%. UK growth over the same period was 1.5%. More recent estimates (six months later) for the year ended June 2019, published by ESCoE last month, ranked the NW fourth with growth of 1.6%, which suggests the region has had a better 2019 so far relative to other parts of the UK.

The ONS figures also highlighted that the quarter to Dec 2018 was not good for the region, with the economy recording negative growth of 0.7%, the only part of the UK to decline. The real estate and construction industries grew by 0.5% and 0.8% and were the largest positive contributors to growth but manufacturing fell by 2.1% and was a major drag on the economy. Overall, the production and services sectors both contributed negatively to growth.

More data from the ONS showed unemployment in the NW increased by 23,000 to 156,000 between May and July, the increase of 0.6% was the highest in England and took the overall rate to 4.3%. 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 74.8% in the NW. UK employment was estimated at 76.1%.

NW average property prices increased by 1.0% to £166,022, which took annual growth to 2.3% which was the second highest in England. In comparison, UK prices grew by 0.5% to £232,710 during July, an annual growth rate of 0.7%.

Economic growth in the North West compares favourably with most regional economies and HS2 under review

Reading Time: 4 minutesGrowth in the North West was 1.6% in the year to June 2019 according to estimates from ESCoE. The robust uplift from the previous quarter’s growth of 1.0% made the North West the most improved region in the UK and ranked it fourth overall (out of twelve UK ‘regions’). At 2.3%, London had the best performance with Northern Ireland at 1% the worst. The national growth rate for the same period was 1.5%. With the UK economy contracting by 0.2% in the quarter, growth in the North West compares favourably with most regional economies which have shrunk.

Unemployment in the North West increased by 21,000 to 158,000 between April and June, an increase of 0.6% to 4.3%. This was the highest increase in unemployment in the country. The South West had the lowest rate at 2.7%, the North East had the highest at 5.3% with the UK rate at 3.9%. The South West also had the highest employment rate at 80.5% which compared with 74.7% in the North West. UK employment was estimated at 76.1%, the joint highest since comparative records began in 1971.

In June, average earnings in the North West were unchanged at £575 per week. London had the highest average earnings of £831. In the UK average earnings grew by 3.7% or by 1.8% after inflation.

North West average property prices increased during the month, the small 0.2% uplift to £164,116 took the annual growth rate to 2.4%. In comparison UK prices grew by 0.7% to £230,292 during June which left the annual growth rate unchanged at 0.9%.

It was a month of mixed messages from the Government on regional transport. In July, Boris Johnson used his first major policy speech at Manchester’s Science and Industry Museum to promise a high speed rail link between the city and Leeds. High speed rail is expected to arrive in Manchester and the rest of northern England by 2033. But now the government has launched a review of the high-speed rail link (HS2) with a decision promised by the end of the year. With £7.4bn already spent, Transport Secretary, Grant Shapps, has refused to rule out scrapping it entirely. Phase 1 of the development between London and Birmingham is due to open at the end of 2026. In July, the current chairman of the project warned that the total cost could rise by £30bn to £86bn, putting the projects value for money into question. There was also disagreement amongst northern leaders with Manchester Mayor, Andy Burnham, pushing an underground option at Manchester Piccadilly (which may cost £6bn) contrary to HS2’s preferred surface station (£570m). With the HS2 project in jeopardy, Northern Powerhouse Rail’s £39bn High Speed 3 (HS3) or Crossrail for the North network in the North of England looks in doubt.

There may be less shale gas in the Bowland geological formation that runs under Lancashire, Yorkshire, parts of the Midlands and into North Wales, than previously thought. The University of Nottingham and the British Geological Survey (BGS) have developed a new method for analysing the gas content of shale, which queries a 1,300 trillion feet of gas estimate in a 2013, suggesting instead that there may only be 200 trillion feet; 5-7 years’ of gas at the current rate of consumption instead of 50 years. Experts at the BGS were cautious in their interpretation of the study, however, even though several of their own scientists were involved in the paper. Cuadrilla, also rejected the new paper and other academics suggested the only way to provide accurate estimates of how much gas is likely to be produced is to drill, hydraulically fracture and test many wells. During the month, fracking was stopped several times by The Oil and Gas Authority (OGA) after a 2.9 magnitude earthquake was reported at Cuadrilla’s Lancashire site. Under current rules, drilling must be stopped for 18 hours if it triggers earth tremors above a 0.5 magnitude. This compares with America where a 4.0 Richter scale limit is allowed.

FirstGroup and Italian firm Trenitalia, are to take over the running of the West Coast Mainline (‘WCM’) train route, connecting London Euston to Glasgow Central, from December, replacing Virgin Trains, which was barred from bidding. The new contract will operate in two phases. The first will run from 8 December to March 2026, when First Trenitalia will operate the existing InterCity West Coast services. The second phase will run from March 2026 to March 2031, when it will operate the HS2 high-speed rail service. Given the HS2 project has been put under review, this may have to be changed even before First Trenitalia starts operating the trains. The firm said its £117m investment would mean 56 Pendolino trains refurbished, more reliable free Wi-Fi, better catering, and more than 260 extra services each week by 2022.

FirstGroup also operates the South Western Railway and TransPennine Express. TransPennine Express is Virgin’s only competitor on most of the northern part of the West Coast mainline. Virgin’s WCM partner, Stagecoach – which refused to take on pensions risk – has won the right to a judicial review of the decision to block it from bidding. Unlike other franchisees Virgin is consistently rated highly by North West travellers. In the latest National Rail Passenger Survey, of the 25 operators in the country, it was ranked second.

A report by an All-Party Parliamentary Group (‘APPG’) of MPs which looks at Post-Brexit Funding for the nations and regions has found that the UK would receive additional EU funding in the 2021-27 spending round. Three additional sub-regions, Lincolnshire, South Yorkshire and Tees Valley & Durham are likely to slip below the threshold of 75% EU average GDP per head that would qualify them for ‘less developed region’ status, but no part of the North West has yet fallen below this level.

Additionally, the EU has proposed that ‘transition region’ status should be extended to cover all regions with a GDP per head between 75-100 per cent of the EU average, compared to 75-90 per cent at present. Seven additional sub-regions are likely to slip below the threshold of 100% EU average GDP per head qualifying them for ‘transition region’ status. Greater Manchester would fall into this category, as well as East Anglia, East Wales, Leicestershire, Rutland & Northamptonshire, Outer London South, North Yorkshire and South Western Scotland. It is not clear how much extra funding these areas would have received from the EU, or but €50 per head over the next EU spending round would equate to £560m.

The UK government has promised to replace EU funding to the regions with a new UK Shared Prosperity Fund. If the new sub regions are added, the APPG calculates this amounts to c£1.8bn pa, on top of the c£2.2bn pa already committed as part of Local Growth Fund. Integrating the Local Growth Fund into the UK Shared Prosperity Fund could be problematic. The Local Growth Fund allocates funding to LEPs via competitive bidding whereas the allocation of EU funds uses a fixed formula. How the Shared Prosperity Fund will be allocated and mesh with other pots like the City Deals is yet to be determined.

North West house prices and unemployment increase the most in Britain, Lancashire has the worst performing Enterprise Zone and depopulation concerns along the West Cumbrian coast

Reading Time: 3 minutesUnemployment in the North West increased by 9,000 to 150,000 between February and April, the uplift of 0.3% to 4.1% was the biggest in the UK. At 2.6% the South West of England had the lowest rate and at 5.6% the North East had the highest rate in the country. The UK unemployment rate stands at 3.8%.

North West average property prices increased by 0.8% to £164,261 during the month which uplifted the annual growth rate to 3.4% – the highest in Britain. In comparison, UK prices increased by 0.1% to £229,431 during April which reduced the annual growth rate to 1.2%.

In its review this month of the 38 Local Enterprise Partnerships (LEPs) – the private sector-led partnerships between businesses and local public sector bodies that support local economic growth – the Public Accounts Committee of the House of Commons found that from 2015-16 to date; £9.1bn of taxpayers’ money has been awarded to LEPs through three tranches of Growth Deals. The north of England, with 11 LEPs, has received most of the funding at £3.4bn (38%), the East of England, with three LEPs, has received the least with £703m, and London, with one LEP, has received £435m.

The Ministry of Housing, Communities and Local Government considers the population of an area as well as the strength of the LEP’s strategic economic plans and projects when deciding Growth Deal allocations. There are no overlapping LEPs in the North West which means that the regions LEPs will be able to bid for funds from the Government’s proposed Shared Prosperity Fund, which will replace EU structural funding after Brexit. The Greater Manchester LEP has received £663m, the 2nd most in England, whereas Cumbria has received £60m, the lowest award in England. Other North West LEP’S awards have been Liverpool City £333m, Lancashire £321m and Cheshire and Warrington £201m. The Ministry does not to evaluate the Local Growth Fund which means it has no understanding of what impact spending through LEPs has on local economic growth. The latest growth figures for the North West from ESCoE showed the third lowest growth in the UK at 1.0%.

The 24 Enterprise Zones designated in England in 2011 to improve economic growth had created 17,307 jobs by 2017 instead of the forecast 54,000 jobs by 2015. BBC-commissioned research conducted by think tank charity Centre for Cities also found that in two areas the number of jobs had fallen. Enterprise zones offered cheaper business rates, superfast broadband and lower levels of planning control. According to the research only 145 jobs were created in the Manchester Airport City Enterprise Zone, with 2,347 jobs lost in the Lancashire Enterprise Zone which made it the worst performing zone in England. The cost of the scheme is disputed, with The Ministry of Housing, Communities and Local Government claiming £101m, £215m less than the BBC’s estimate of £316m+. The Ministry also disputes the methodology used in the research.

Cumbria and Carlisle City and the three other cross-border councils and the Scottish and UK governments have signed the heads of terms for the Borderlands Growth Deal. The two governments have confirmed funding of up to £350m and agreed to uplift the deal with an extra £45m. Projects under consideration include a £10m feasibility study into extending the Borders Railway beyond Tweedbank to Carlisle., Carlisle Station Gateway, Chapelcross Energy Park near Annan, Berwick Theatre and Conference Centre and the Mountain Bike Innovation Centre in the Borders. Second phase projects might include a play village at Alnwick Garden, the Star of Caledonia landmark sculpture at Gretna and a dairy innovation centre in Dumfries and Galloway. The funds will be deployed over 10 years by the Scottish government and over 15 years by the UK government.

BBC analysis of ONS projections has found thirty seaside towns could see a fall in the number of residents under the age of 30 by the year 2039, with the biggest decline in the north of England. Copeland could see a fall of 14%, the largest decline in England, with Barrow and Allerdale second and fifth. Coastal authorities in the south such as Bristol could see a 15% rise in the number of children and young people. The Coastal Communities Fund has invested £218m in 354 projects across the UK since 2012 with the latest figures showing 27% or c£25m deployed in the South West and 10% or £9m in the North East. In the spring, the House of Lords Select Committee on regenerating seaside towns found that Brighton and Bournemouth have shown that coastal areas can successfully regenerate and that the Government should secure town deals for other deprived seaside areas like Blackpool.

Greater Manchester the second region to launch a local industrial strategy, the Northern Powerhouse five years on and the North-South divide likened to the Berlin Wall

Reading Time: 4 minutesUnemployment in the North West increased by 2,000 to 133,000 between February and April, an uplift of 0.1% to 3.7%. At 2.7% and 5.7% the SW of England and the North East had the lowest and highest unemployment rates in the country. The UK unemployment rate stands at 3.8%.

North West average property prices increased by 0.6% to £161,981 during the month which uplifted the annual growth rate to 2.6%. In comparison, UK prices increased by 0.7% to £228,903 during April which held the annual growth rate at 1.4%.

Greater Manchester has become the second region to agree a local industrial strategy with the government. The 97 page document was designed by the Greater Manchester Combined Authority and Greater Manchester Local Enterprise Partnership in collaboration with businesses and was signed off by Business Secretary, Greg Clark. The strategy is to become the UK’s first city-region to achieve carbon neutral living by 2038 as well as plans to enhance the city-region’s position in manufacturing of advanced materials such as graphene, health innovation, and digital and creative sectors.

As part of the plan, a new biomanufacturing hub has opened at Manchester University to further develop biotechnologies and clean growth. Based at the Manchester Institute of Biotechnology, the new Future Biomanufacturing Research Hub is underpinned by £10m in government investment and will develop new technologies in manufacturing processes of chemicals, using plants, algae, fungi, marine life and micro-organisms. The Institute will collaborate with Imperial College London, the University of Nottingham and the University College London. The Universities of Swansea and Sheffield will also host similar hubs, each also benefiting from £10m from HMG.

Other projects include upgraded facilities for advanced materials development, including £38m for the National Graphene Institute, £25m for the Graphene Engineering Innovation Centre, and £235m of funding for the Sir Henry Royce Institute. There is also £23.8m in digital infrastructure investment which should lever in c£200m from the private sector. As part of the infrastructure plan, £312.5m was flagged through the Industrial Strategy’s Transforming Cities Fund for projects like the Metrolink.

Growth in the North West was 1.0% in the year to March 2019 with the UK growth rate for the same period at 1.5% and London’s growth rate at 2.7%.

Research by the think-tank, the Institute for Public Policy Research North, showed the North West lost most public sector jobs in the last decade with 133,000 less employees. This represented an 18% drop but the North East saw the biggest percentage cut at 24%. With northern regions of the UK more dependent on the public sector than other parts of the UK, the Government’s austerity programme has had more of an impact. The think tank also compared the Northern Powerhouse’s performance over its first five years with the UK average, citing successes in economic growth (10.7 % v 10.6%), productivity (11% less productive v 12%) and employment (6.9% v 6.2%.) However, weekly pay across the north has risen by £12 (2.4%), against a national average increase of £19 (3.5%) in real terms. Housing has remained more affordable than in the south of England. Overall the report provides some evidence that greater devolution is starting to work.

Echoing the North-South divide, during the month 33 newspapers across the north of England including the Manchester Evening News, Liverpool Echo and Lancashire Evening Post, jointly demanded the government accelerates devolution to help deliver economic growth. The campaign, labelled Power up the North, also targeted more funding for Northern Powerhouse Rail.

Also, Northern Powerhouse minister, Jake Berry, had his brief expanded to include the Department for Business, Energy and Industrial Strategy this month. Commenting on the Greater Manchester local industrial strategy he said ‘Our refreshed Northern Powerhouse strategy will complement this approach and other Local Industrial Strategies across the north.’

On this theme, at the UK2070 symposium in Leeds, Lord Bob Kerslake, the former head of the Civil Service, likened the inequality of the North-South divide to Germany at the fall of the Berlin Wall 30 years ago. The UK2070 Commission recommended in its report more effective devolution, more integrated national and sub national transport networks and a 25 year £250bn renewal fund.

The Treasury Committee has launched an inquiry into regional imbalances in the UK economy. The Committee will examine regional imbalances in economic growth and what regional data is available in the UK, how it could be used more effectively in policy development, and whether there should be official regional economic forecasts produced.

On transport, control of Greater Manchester’s bus network could be taken back into public control. In the UK, only in Northern Ireland are bus services state-owned but in London services are more regulated than in the North West. Transport for Greater Manchester (TfGM), like Transport for London, would be given powers to set routes, ticketing, timetables and quality standards. Private bus companies would compete for contracts, given by TfGM, to operate services on specified routes on a franchise basis. TfGM would receive the revenue from tickets and subsidise less busy but necessary routes.

On the trains, a survey by the Northern Powerhouse Partnership (NPP) found companies believed a Crossrail of the North or HS3 would boost productivity and investment. The East/West project running from Hull to Liverpool with a spur from Leeds up to Newcastle would cost £39bn.

On interventions, Tata Chemicals Europe has been given a £4.2m government grant towards a £16.7m project to build the UK’s first major carbon capture plant. The Northwich facility will recycle 40,000 tonnes of waste carbon dioxide when it begins operating in 2021.

A new economic partnership between Barrow, South Lakeland and Lancaster Councils targeting growth around Morecambe Bay has been launched. It is not clear how the new partnership will work with the Cumbria and Lancashire LEPs.