The State of Britain

SE

The SE remains the largest UK exporter, the region’s construction sector and labour market perform the best

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HMRC has published the latest regional trade figures which show exports and imports for 2019. Given the time period this data reflects Brexit uncertainty rather than Covid 19 turmoil. 

In the year to December 2019, the overall value of UK trade in goods exports increased by 2.1% to £346bn compared with the same period in 2018. The overall value of imports increased by 0.3% to £483bn.

There was a decrease in the annual export value in the SE along with five of the 12 UK ‘regions’. The SE’s exports decreased by 1.1% or £503m to £46.5bn which was 13% of the UK total.  

The biggest regional exporter remained the SE with Northern Ireland the smallest at £9bn. The best performer in percentage terms was London which added 17% with Yorkshire & The Humber falling by 6.3%.

There was an increase in the annual import value in the SE along with five of the 12 UK ‘regions’. The SE’s imports increased by 3.1% or 3bn to £98bn which was 20% of the UK total.

The leading regional importer was the SE at £98bn and Northern Ireland was the smallest at £8bn. In percentage terms London added 12% compared with Scotland which reduced imports by 7%.

The USA was the SE’s largest export market with machinery & transport equipment the best export. Most of the SE’s imported goods came from Germany with machinery and transport equipment the biggest import.

Services

This month the ONS published data on regional services imports for 2017. The biggest component of services imported into the UK was £51bn of travel. This was 28% of the £181bn UK total imports of services.

The SE imported £26bn of services value in 2017 of which £7bn was travel. The largest importer of services was London at £60bn with Northern Ireland importing £1.6bn.

At a local level, the biggest importer of non-travel services into the UK was Camden and City of London at £14.5bn, almost double the next largest importer which was Westminster at £7.9bn. Of the 167 local areas, the Western Isles of Scotland imported the least amount, £21m, with Anglesey next at £31m.

In the SE, Berkshire imported £3.9bn of non-travel services compared with £92m on the Isle of Wight.

The data on services exports was released by the ONS last year which showed the SE exporting £45bn of services which compared with London at £117bn and Northern Ireland at £2.9bn.

Other data

The ONS has also published the latest regional construction sector data to December 2019 which again reflects Brexit uncertainty rather than Covid 19 turmoil. Compared with the previous quarter all parts of the UK recorded a decline with the SE posting a 0.9% drop to £6.3bn.

The biggest decrease in the UK was 4.6% in the West Midlands; the SE was best with the 0.9% fall. Within construction though 9880 new houses were completed in the SE, an increase of 26% on the previous quarter.

More pre-pandemic data from the ONS showed unemployment in the region was 13,000 lower at 91,000 between December and February; the drop of 0.3% took the rate to 3.0%. Northern Ireland had the lowest rate of 2.5%, the NE the highest at 5.6%, with the UK rate at 4%.

The South East had the highest employment rate at 80.1% where 4.7m are employed; the UK rate was 76.6%.

The SE’s average property price decreased over the month by 0.4% to £321,329. The fall took the annual increase to 0.4%. In comparison, UK prices dropped by 0.6% to £230,332 during February, an annual growth rate of 1.1%.

Abingdon in Oxfordshire and Portsea in Portsmouth are the wealthiest and poorest areas of the region, Thames Valley Berkshire LEP had the best productivity in the UK and the SE’s employment rate now top

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The ONS has published average household disposal income estimates for England and Wales in 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 geographically 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 area of the SE was northern Abingdon in Oxfordshire with £44,900. This ranked the area 35th out of the 7,201 areas recorded. The poorest area of the region was the Portsea area of Portsmouth with £18,400. This area was ranked 6,337 out of the 7,201 areas recorded.

Unlike most regions of the UK, output per hour in the SE was above the UK average. Productivity in the SE was 9.1% above the norm which ranked the region second in the UK. The SE and London record high levels of hours worked and their high productivity 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 SE’s performance.

Perhaps the most useful is 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.

The region’s Thames Valley Berkshire LEP had the best productivity (in terms of hours and jobs) in 2018 at 35% above the UK average whereas the West Midland’s Black Country LEP at 24% below was the worst.

Eight of the 44 enterprise regions in the UK recorded productivity above the UK average; four of the SE’s seven LEPs were in this category. After Thames Valley Berkshire, the next best was Enterprise M3 ranked third at +20%, then Coast to Capital sixth at +5% followed by Solent eighth at +3%. Buckinghamshire Thames Valley LEP (-0.2%), Oxfordshire LEP (-4%) and the South East LEP (-7%) were ranked 9th, 14th and 18th.

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 SE’s Buckinghamshire Thames Valley LEP which saw productivity drop by 11%.

More generally the SE’s results for productivity growth were mixed. With growth of 6%, Enterprise M3 was the eighth best in the UK, one place above Thames Valley Berkshire, and the Solent LEP was ranked 27th nationally with growth of 2%, Four of the region’s LEPs recorded productivity levels lower in 2018 than 2010; the South East at -0.2% was ranked 34th, four places above Coast to Capital LEP which recorded -1.5%. The -6% drop in productivity in Oxfordshire was only worse in Gloucestershire and, as mentioned above, in Buckinghamshire Thames Valley LEP.

Three of the SE’s four subregions recorded productivity above the UK average. Berkshire, Buckinghamshire and Oxfordshire +17%, Hampshire and Isle of Wight +12% and Surrey, East and West Sussex +6%. Kent was just below at -3%.

At county level, led by North Hampshire (+44%), eleven of the SE’s economic regions recorded productivity above the UK average. The other ten areas dropped below the UK average, with East Sussex recording the lowest productivity at -27%.

The growth in hours worked between 2010 and 2018 in Berkshire, Buckinghamshire and Oxfordshire was 18%, beating Kent which recorded 11% and Surrey, East and West Sussex on 8%. In UK terms this level of growth was in the top half of the country’s 40 subregions with Berkshire, Buckinghamshire and Oxfordshire ranked fifth. With growth of 6% Hampshire and Isle of Wight was ranked 34th.

If the increase in economic output is also factored in then the sub regional performances are mixed. Hampshire and Isle of Wight was ranked 20th in the UK with growth of 2%, one place above Surrey, East and West Sussex, with Kent placed 29th with 1% growth, one place above Berkshire, Buckinghamshire and Oxfordshire.

More data from the ONS showed unemployment in the region was 7,000 higher at 156,000 between November and January; the uplift of 0.1% took the overall rate to 3.2%. Northern Ireland had the lowest rate of 2.4%, the North East the highest with 6.2%, with the UK rate at 3.9%.

The South East finally overtook the South West and had the highest employment rate at 80% which compared with 79.9% in the SW; the UK rate was 76.5%. Over 4.7m are employed in the SE.

The SE’s average property price decreased by 1.2% to £320,700, which took the annual decrease to 0.5%. In comparison, UK prices decreased by 1.1% to £231,185 during January, an annual growth rate of 1.3%.

SE growth accelerates and moves the region up the rankings, highly productive London means only the SE beats the UK average, but the region outdoes the capital on productivity 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 the SE’s growth has increased from 0.9% to 1.8%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the SE fourth (previous ranking tenth) and suggests the region has improved 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%.

The latest official ONS figures for an earlier period are more mixed. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the SE 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 stats are for the period six months before the ESCoE 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 SE grew by 1.4%, down from 2.7% growth the previous quarter. This placed the SE third (previous ranking second) 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 the worst performer and contracted by 0.7%, one of three ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to June 2019 was worse for the region than the previous quarter. The SE economy contracted by 0.7% in April to June 2019, following growth of 0.2% in January to March 2019.

This placed the SE eighth (previous ranking ninth) 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, SE information/communication and finance showed growth of 4.3% and 6.6% but education and construction fell by 8.0% and 3.6%. In general all of the SE’s sectors shrank, with construction, production, agriculture and services falling by 3.6%, 1.4%, 0.7% and 0.4% respectively.

Overall the region has seen growth in the agriculture and services sectors relative to 2017 but the production sector has fallen whilst construction fell after growth in 2018 and has continued to fall into Quarter 2 2019.

Productivity

Unlike most regions of the UK, output per hour in the SE was above the UK average. Productivity in the SE was 9.1% above the norm which ranked the region second in the UK.

The SE was one of two regions that had productivity above the UK average in 2018; the other was London +31.6%. 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 SE was also second in the rankings in terms of output per job. The region’s 6.1% higher than 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 SE was ranked third as output per hour grew by 1.7%. 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%.

Sectorally, productivity in non-manufacturing production and agriculture 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 fell slightly by 1,000 to 151,000 between October and December; which left the rate unchanged at 3.1%. 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 still had the highest employment rate at 80.1% which pipped 80% or 4.7m in employment in the SE; the UK rate was 76.5%.

In December, average earnings in the SE increased by £18 to £728 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. The SE was ranked second (previous ranking also second).

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 SE’s average property price fell by 0.3% over the month to £325,050; the drop took the annual increase to 1.2%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.

Taxation receipts exceed public spending in the SE by an extra £3.5bn and the government’s nationalisation of Northern Rail throws South Western Railway’s franchise into focus

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In the ONS’s estimate of regional public spending and regional tax revenues in 2019, the SE had a surplus of £21.7bn, a larger surplus than the £18.2bn recorded in 2018. This compared with London, which had the highest surplus of £38.9bn.

On a per person basis, the SE’s surplus was £2,394, higher than the £2,023 recorded in 2018. London had the largest surplus of £4,369 per person whereas Northern Ireland had the biggest shortfall at £4,978.

The SE was one of three areas of the UK to run surpluses, along with London 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 SE was £109.3bn or £11,967 per head, an increase on the 2018 figure of £107.2bn. 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 SE collected £131bn 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 SE fell increased by 9,000 to 158,000 between September and November 2019; the uplift of 0.2% took the overall rate to 3.3%. Northern Ireland had the lowest rate at 2.3% with the UK rate at 3.8%.

The South West continued to have the highest employment rate at 79.8% which compared with 79.7% in the SE. The UK employment rate was 76.3%.

SE average property prices increased by 0.4% during November 2019, the uplift to £326,636, took annual growth to 1%. In comparison, UK prices increased by 0.4% to £235,298 an annual growth rate of 2.2%.

On development, Royal Borough of Windsor and Maidenhead councillors have given Legoland Windsor Resort permission to build on greenbelt land. The theme park in Berkshire wants to create a new drop tower ride and a main attraction building on land on the outskirts of the current site.

Planners opined that economic benefits in respect of the tourism economy, employment and operational spend had outweighed harm to the greenbelt. At least 20 new jobs will be created.

A new buyer has not been found for Godalming based The Book People and administrators PwC say 155 people have been made redundant. The business was founded in Godalming in 1998 and employed 393 people last month.

The firm has offices in Bangor, Gwynedd, and Godalming, Surrey. PwC said 82 of the 142 staff at the Bangor office have lost their jobs.

In Portsmouth, the closure of a Nolato Jaycare factory with the loss of 115 jobs is likely to benefit the firm’s other plant in Newcastle. The medical packaging firm said the Portsmouth plant produced medicine bottles ‘with relatively low added value’.

On transport, the government’s nationalisation of Northern Rail has thrown South Western Railway’s (SWR) franchise into sharper focus.

SWR’s owners FirstGroup and MTR were awarded the franchise in August 2017, after outbidding previous operator Stagecoach. The firm operates routes between London Waterloo, Reading, Bristol, Exeter, Weymouth, and Portsmouth, as well as Island Line on the Isle of Wight.

Transport Secretary, Grant Shapps, said poor punctuality and reliability combined with slower revenue growth has led to the operator’s financial performance being ‘significantly below expectation’ since the franchise began in August 2017. The company recently declared a £137m loss.

The firm said it is currently involved in discussions with the government over the future of the franchise. Options for the government are agreeing a new contract, granting a short-term contract to SWR or moving operations to the Department for Transport via the Operator of Last Resort, a public sector operator wholly owned by the Department for Transport i.e. renationalisation.

The South East nears the bottom of the 2018 growth league, Medway and Milton Keynes the regional stars, a poor year for East Surrey and Coast to Capital LEP

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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 SE economy grew by 0.6% in 2018, down from the 2017 growth rate of 1.2%. This placed the SE eleventh (2017 ranking also eleventh) out of the twelve UK ‘regions.’

The UK and England growth rate in 2018 was 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 Medway economy grew the fastest at 5.1%, followed by North Hampshire at 3.1% and Milton Keynes at 2.8%. Across the UK, the highest annual growth of the 179 local areas was in Falkirk at 10.5%.

Seven areas of the region saw their GDP decline in 2018. East Surrey recorded the biggest drop at 5.1%, followed by East Sussex at 1.6% and Central Hampshire at 1.3%. In UK terms, the lowest annual growth of sub national areas was in Mid and East Antrim at -10.1%.

GDP per head growth of 4.9% to £22,829 was seen in Medway although at £58,393 Milton Keynes topped the region. Indeed Milton Keynes, ranked sixth, was one of four areas outside of London in the UK top 10 GDP per head, Berkshire also featured and was placed seventh. GDP per head fell by 5.6% in East Surrey to £37,429 but East Sussex was the regional lowest at £18,852.

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 SE economy were information/communication at 5.3%, professional/scientific/technical activities at 5% and transportation/storage up by 3%. Those areas that did not perform well were mining which dropped by 15%, water supply services down by 7%, and electricity supply and services declined by 6%. Overall the services sector grew by 1.1% whilst construction fell by 0.8% and production by 2.2%.

The 2018 performance of the region’s seven enterprise partnerships was also highlighted by the ONS. Of the UK’s 45 development bodies, Greater Birmingham and Solihull LEP was ranked 1st in the UK with growth of 2.8%, Oxfordshire was ranked 17th in the UK (2017 ranking 39th) with growth of 1.7%. Buckinghamshire Thames Valley moved up the rankings from 44th to 30th with growth of 0.6%, Solent was placed 28th (was 41st) and Thames Valley Berkshire moved up to 20th from 28th. With slower or negative growth, the region’s other three LEPs fell down the rankings, with the South East LEP slipping from 13th to 34th, Enterprise M3 moving from 19th to 25th and Coast to Capital dropping three places to 39th.

More data from the ONS showed unemployment in the SE increased by 14,000 to 149,000 between August and October 2019; the increase of 0.3% took the overall rate to 3.1%. 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 79.4% in the SE. UK employment was estimated at 76.2%.

SE average property prices fell by 0.8% during October 2019 to £323,438, which took the annual fall to 0.3%. In comparison, UK prices fell by 0.7% to £232,944, an annual growth rate of 0.7%.

Regional growth figures suggest the SE economy accelerated in Q1 but slowed over the summer, the region sees the biggest monthly uplift in house prices in Great Britain

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On infrastructure investment, the SE did well this month.  Of the £374m Housing Infrastructure Fund spend announced by Communities Minister, Robert Jenrick, £170m was in the region. The funds will be invested in roads, schools, public transport and utilities.

Medway Council was successful in its bid to secure these funds for major infrastructure developments on the Hoo Peninsula. Plans to develop 10,600 new homes in the area will follow the infrastructure.

Medway Council and Network Rail will upgrade rail infrastructure and train services. In addition, £85.7m will be used for improvements to Medway’s roads, including the A228 and A289, as well as a new relief road to help ease local congestion.

Also on economic development, the mechanism by which councils will have the opportunity to bid for funding of up to £25m as part of the government’s £3.6bn Towns Fund has been unveiled by Jenrick.

The Towns Fund prospectus provides information to the councils in 100 places that have been chosen to pioneer Town Deals. Councils will receive a share of a £16.4m funding pot to shape up their plans.

The £25m funding could be used to redevelop vacant buildings and land, support small businesses, boost transport links and increase access to high-speed broadband.

Lead councils in each area will now bring together a Town Deal Board including representatives from across the public, private and voluntary sectors to develop bespoke Town Investment Plans by summer 2020. SE towns include Hastings, Crawley, and Lewes.

Also, the first Thames Estuary Envoy, who will act as the Chair of the Thames Estuary Growth Board, has been appointed.

The announcement follows the government’s response to the Thames Estuary 2050 Growth Commission report earlier this year. The Growth Commission was established in 2016 to develop a plan for north Kent, south Essex and east London up to 2050.

Despite the proximity to London, parts of the Thames Estuary contain neighbourhoods with high levels of deprivation and higher levels of unemployment compared with the average for England.

The Board is a voluntary partnership between local authorities, Local Enterprise Partnerships, universities, businesses and civil society and will receive £1m of government funding to initiate economic growth plans in the area.

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 South East of England, 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 South East’s economy grew by 2.7%, down from 2.8% the previous quarter. This placed the SE second (previously third) out of the twelve UK ‘regions.’

London topped the table with growth of 4.2%. Propelled by a drive to meet the original March 31st Brexit date, UK growth over the same period was 2.2%.

The ONS figures showed that growth in the region’s economy accelerated in the quarter to March 2019. The SE economy grew by 0.9% in January to March 2019, following growth of 0.5% in October to December 2018.

In this period, the education industry grew by 4.6% and made the largest positive contribution to growth whereas construction fell by 2.6% and manufacturing fell by 2.0%.

Overall the service sector was the main driver of GDP with the production sector contracting.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked the SE tenth (previous ranking seventh) with growth of 0.9%, which suggests the region has had a poorer 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 growth in the South West of England (bottom) at 0.41%

More data from the ONS showed unemployment in the region increased by 12,000 to 152,000 between July and September; the uplift of 0.2% took the overall rate to 3.2%. Northern Ireland had the lowest rate of 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 79.3% in the SE; the UK rate was 76.0%.

In September, average earnings in the SE were down by £18 to £710 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.

The SE’s average property price increased by 1.0% over the month to £329,197, the biggest monthly uplift in Great Britain, which took the annual increase to 0.7%. In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%.

A significant drop in wages in Dover, fusion power in Oxfordshire and regional infrastructure wins

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Unemployment in the SE increased by 14,000 to 149,000 between June and August, the increase of 0.3% took the overall rate to 3.1%.

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 79.52% in the SE. UK employment was estimated at 75.9%.

SE average property prices increased by 0.8% to £326,232, which took the annual fall in prices to 0.6%, only the London market has performed more poorly. 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 coastal communities in Great Britain earn on average £1,600 less per year than those living inland. Since 2010 wages fell by c20% in real terms in Dover, the third biggest drop in the UK.

In seaside towns median wages were £22,104 compared with £23,785 in non-coastal areas.

The ONS’s Personal Well-being (or Happiness) Index has ranked the SE seventh out of the 12 UK ‘regions in terms of improved happiness since the last survey. Overall though, the Northern Irish were still the happiest in the UK with Londoners still the most miserable.

Development

The Government is committing £220m to the conceptual design of a fusion power station. Fusion offers the potential of cleaner electricity by mimicking the processes that power the Sun.

Most of the funding will be deployed at the UK Atomic Energy Authority’s Culham Science Centre HQ in Oxfordshire, with partners from industry and academia from other parts of the UK collaborating.

Work is due to start at Culham early in 2020 and will create 300 direct jobs with even more in the UK fusion supply chain.

The UK Atomic Energy Authority in partnership with the Science and Technology Facilities Council has also opened a £12m training facility for engineering apprentices at Culham.

The Oxfordshire Advanced Skills centre will train up to 350 apprentices each year in a bid to meet the region’s hi-tech skills shortage which was identified in the Oxfordshire Local Industrial Strategy which was published in July.

The apprentices will be trained in partnership with 20 local employers in disciplines including robotics and cryogenics.

The government, local authorities and Thames Water will contribute to a £270m river Thames flood defence project .The scheme will protect 15,000 homes and 2,400 businesses between Datchet, Berkshire, and through Surrey to Teddington.

In 2014, about 2,000 people were flooded out of their homes in Chertsey, Egham, Sunbury, Staines and Weybridge. The Environment Agency could start work in 2023 with the defences operational by 2027.

The 6,000-home Welborne garden village development in Hampshire has been approved. Welborne is one of the government’s 14 garden villages being built nationwide.

The project will be built on 1,000 acres of mostly farmland north of Fareham and includes a redesign of Junction 10 of the M27, four schools, and a railway station. Work to secure the funding for the motorway junction is still ongoing.

Surrey County Council will move from County Hall in the London borough of Kingston to Midas House in Woking, from mid 2020. Victorian built County Hall found itself outside of Surrey and in the Royal Borough of Kingston upon Thames after boundary changes in 1964.

Transport

The region did well on infrastructure investment this month.  Of the £100m spend announced by the Department of Transport, £25.5m was in the SE.

The £25.5m is for the Stubbington bypass, a new 2 mile single carriageway road which will ease congestion as well as improve access to development sites in Gosport.

This was dwarfed though by a £102m grant from the Housing Infrastructure Fund to turn a section of the A40 into a dual carriageway. Oxfordshire County Council was given the cash to widen the congested road between Witney and a proposed park and ride in Eynsham.

A £8m extension of a bus lane westbound from Duke’s Cut canal bridge to Eynsham is also proposed. The government said the cash would allow 5,050 homes to be built in west Oxfordshire.

Former prime minister and Witney MP David Cameron previously described the A40 as ‘a bit of a foot on the windpipe of the west Oxfordshire economy’ due to its congestion problems. Few who have driven the road would disagree.

Jobs

Marlow headquartered, Jessops, which employs about 500 people across its stores, is in discussions with landlords which are expected to lead to a company voluntary arrangement with creditors that would involve closures and rent cuts.

Dragons Den star, Peter Jones, who owns the camera chain, planned to call in administrators but pushed this out by two weeks whilst negotiations continued. Jones rescued the chain from administrators in 2013 after it collapsed under £81m of debt.

The owners of Chatham Docks have said the estate is unviable as a port beyond 2025, 800 on-site jobs are at risk. The docks are a 75-acre commercial port and manufacturing hub. Peel L&P said it had been in talks with tenants about relocating to alternative sites for some time.

South East oil projects go ahead and the Chiltern Hills the least deprived area of England

Reading Time: 4 minutesThe 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, Sheerness is the first South East entry ranked 48th. The Ministry divides England up into 32,844 neighbourhoods averaging about 1,500 residents or 650 households each.

In terms of local authorities, 30% of Hastings was classified as deprived which ranked the town 17th worst in the UK. In Gravesham, deprivation fell by c6%, the eighth fastest fall in the UK, and was the regional star performer. The least deprived area of England is an area near Great Missenden in the Chiltern Hills, Buckinghamshire.

The MHCLG found concentrations of deprivation in a number of coastal towns, some of which are in the South East, and there was new money for the region in the latest tranche from the Coastal Communities Fund, with Dover a winner. The £2.4m project ‘Dover Soul’, will upgrade the town’s Market Square and Old Town with a view to increasing the number of visitors and re-establishing the area as a leisure destination.

Also Hastings, Margate and Newhaven are some of the SE 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 South East and London were also awarded £14.3m as part of a £95m pot to revive historic high streets, with Hastings again benefiting, along with Chatham and Ramsgate.

Development
Esso is to build a hydrogen generating plant, an automotive diesel oil production facility and diesel storage tank at Fawley, near Southampton, after New Forest District Council planning committee agreed its application. The £800m project will expand production, reduce diesel imports, create 1,000 construction jobs and safeguard the existing 2,000 jobs on site. The refinery, on Southampton Water, covers an area of more than 1,000 hectares and provides 20% of the UK’s refinery capacity.

Also in Southampton, plans for a £150m redevelopment of a derelict Toys R Us site have been outlined by the city council. The proposals include an office block, 275 flats, restaurants and shops at the Western Esplanade. A new promenade linking Southampton Central train station to the West Quay shopping centre is also planned. The first £75m phase will encompass a 70,000 sq ft office building as well as new restaurants, cafes, shops and a leisure attraction. More homes will be built as part of the second stage before a further development containing a hotel or office space could be constructed as part of the final phase. The council plans to borrow £27m to build the phase one office block.

Surrey County Council has approved a 25-year drilling plan from UK Oil and Gas Investments which aims to operate four oil wells at the Horse Hill site, about two miles from Gatwick Airport. The site covers about 2 hectares of former farmland near Horley. The company was also granted permission for a water re-injection well which aids oil recovery. The company had previously claimed to be able to meet 10- 30% of the UK’s oil demands from the project.

Jobs
Arjowiggins paper mill in Aberdeen has been sold, months after administrators said negotiations had ended without a sale, if the firm had folded then 82 jobs in Chartham and 27 jobs in Basingstoke were threatened. The deal has been supported with £7m of funding from Scottish Enterprise.

Transport
The saga over South Western Railway’s £45m upgrade of its 30-year-old Class 442 trains known as ‘plastic pigs’ continues. The Class 442s were originally due to be brought back into service in December 2018 after refurbishment in Bournemouth and Eastleigh. The delayed reintroduction was aborted in May due to a safety problem with the door locks. The first trains came into service in June but new motors to improve reliability have yet to be fitted. Now they are suspected of accidentally turning signals yellow or red as they pass through Earlsfield station in south west London; you couldn’t make it up.

The Stats
For the first time, the ONS has published quarterly GDP estimates for the South East of England, 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 South East economy grew by 2.8%. This ranked the region third 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%.

The quarter to Dec 2018 showed the education industry grew by 7.8% and made the largest positive contribution to growth but construction fell by 2.2% and public administration and defence fell by 1.6%. These made the largest negative contributions to growth in the region. Overall, the services sector was the main driver of GDP whereas production was flat. More recent estimates (six months later) for the year ended June 2019, published by ESCoE last month, ranked the South East seventh with growth of 1.4%, which suggests the region’s economy has weakened this year relative to other parts of the UK.

More data from the ONS showed unemployment in the South East decreased by 8,000 to 135,000 between May and July, the drop of 0.2% took the overall rate down to 2.8%, the second lowest rate in the UK. 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 79.8% in the South East. UK employment was estimated at 76.1%.

South East average property prices fell by 0.7% to £320,454, which meant annually prices had fallen by 2.0%. In comparison, UK prices grew by 0.5% to £232,710 during July, an annual growth rate of 0.7%.

Falling South East growth but unemployment remains very low, no change on the railways at Southeastern and around a dozen new roads recommended to connect up the Arc

Reading Time: 3 minutesGrowth in the South East was 1.4% in the year to June 2019, which ranked the region seventh (out of twelve UK ‘regions’) according to estimates from ESCoE. The drop from the previous quarter’s growth of 1.5% suggests the region’s economy is contracting. 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, falling growth in the South East reflects this and is similar to other regional economies which have also shrunk.

Unemployment in the South East decreased by 12,000 to 139,000 between April and June, a drop of 0.3% to 2.9%, the joint second lowest rate in the UK. The South West had the lowest unemployment 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 the South East at 79.6% and the UK rate of 76.1%, which is the joint highest since comparative records began in 1971.

In June, South East average earnings increased from £691 to £718 per week. London had the highest average earnings of £831; the North East had the lowest at £537. In the UK average earnings grew by 3.7% or by 1.8% after inflation.

The South East’s average property price increased during the month, the 1.1% rise to £291,370 reduced the annual price drop to 0.6%. In comparison, UK prices grew by 0.7% to £230,292 during June which left the annual growth rate unchanged at 0.9%.

On infrastructure, regional transport body, England’s Economic Heartland, has recommended that the Government invests in 11 road schemes from Swindon to Cambridge at a cost of more than £700m. The recommendations form part of the Oxford to Cambridge arc strategy – as outlined by the National Infrastructure Commission – which also includes the re-opening of the previously closed Oxford to Cambridge railway and building 1m new homes. Cost estimates of an Oxford-Cambridge expressway alone range between £3bn and £7bn.

On development, a £450m waterfront project has been ended by Southampton City Council after five years. The proposed Royal Pier Waterfront scheme would include a hotel and a casino on land reclaimed from the River Test in Southampton. The council gave no reason for the termination. A food market and 730 flats are also included, to be built on the site of the derelict Royal Pier and the reclaimed land. In Hove, Crest Nicholson has withdrawn from the 1.8 hectare King Alfred development. The project involved replacing the King Alfred Leisure Centre with modern sports facilities, and building new housing, including affordable homes. A total of £23m of public money – £15m from the Housing Infrastructure Fund and £8m from Brighton and Hove City Council – was approved to assist the developer in building a new sports centre and 565 homes.

On transport, the competition to operate the South Eastern franchise has been cancelled. The current incumbent, Southeastern, has been given a five-month extension to run the route between London, Kent and parts of East Sussex until April 2020. Go-Ahead runs Southeastern with Koelis through their joint venture Govia. A Department for Transport spokesperson said the decision to cancel the competition followed concerns that continuing the process would lead to additional costs to the taxpayer. The franchise was put out to tender in November 2017, and again last year before being cancelled by new Transport Secretary, Grant Shapps. FirstGroup and Italian firm Trenitalia were awarded the West Coast Mainline franchise this month.

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, none of which are in the SE, are likely to slip below the threshold of 75% EU average GDP per head that would qualify them for ‘less developed region’ status. Additionally, the EU has proposed that ‘transition region’ status should be extended to cover all regions with a GDP per head between 75 and 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. Again, none of these sub-regions are in the South East.

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.

The second lowest unemployment rate in the UK, two local industrial strategies rolled out and electric Minis in Cowley

Reading Time: 4 minutesUnemployment in the South East of England decreased by 21,000 to 134,000 between March and May, the decrease of 0.4% to 2.8% meant that the region had the second lowest rate 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%.

The South East of England’s average property price increased by 0.9% to £323,745 during the month which uplifted the annual growth rate to 0.6%. In comparison, UK prices increased by 0.1% to £229,431 during May which reduced the annual growth rate to 1.2%.

Buckinghamshire has become one of the first regions to agree a local industrial strategy with the government. The 73 page document was developed by the Buckinghamshire LEP in collaboration with businesses and was signed off by Business Secretary, Greg Clark.

The strategy included; a long-term investment plan for Westcott Space Cluster to develop new research and development facilities, a new Screen Industries Global Growth Hub at Pinewood Studios to provide support to creative businesses, using Silverstone Park and technology cluster to stimulate high tech cross-overs, focusing on digital health, med-tech and advanced artificial intelligence.

Also Oxfordshire agreed its local industrial strategy with the government although at 99 pages it had a bigger document. Again the local LEP, Oxfordshire, collaborated with businesses and the strategy was signed off by Business Secretary, Greg Clark. With the aim of becoming one of the top three global innovation hubs by 2040, the plan outlines; supporting the existing science and technology parks with the potential creation of a new Global Business District as part of Oxford Station quarter, providing enhanced support for scale-ups especially from spin-outs from Oxford University, commercialisation of ‘breakthrough businesses’ IP, the development skills via an Oxfordshire Social Contract, and developing the Oxfordshire Digital Investment Plan

The two plans are part of the connected Local Industrial Strategies covering the Oxford-Cambridge Arc, a plan from the National Infrastructure Commission which is intended to safeguard the booming economies of the UK’s science and technology hub. The Arc means the large scale development of homes, offices and roads across central England and the re-opening of the previously closed Oxford to Cambridge railway. The other 2 areas are Buckinghamshire and the South East Midlands.

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 East of England, with three LEPs, has received the least with £703m, London, with one LEP, has received £435m and the north of England, with 11 LEPs, has received most of the funding at £3.4bn (38%).

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 is an overlapping LEP area in the region which means these LEPs will currently be unable to bid for funds from the Government’s proposed Shared Prosperity Fund, which will replace EU structural funding after Brexit. South East Midlands LEP overlaps with Buckinghamshire LEP in the north of the region.

The South East Local Enterprise Partnership (which includes Essex (part of the East of England region)) has received £591m, the 3rd highest in England since 2015 whereas the Buckinghamshire Thames Valley LEP has received £74m, the 3rd lowest in England. Other South East regional LEP awards have been Coast to Capital £304m, Oxfordshire £143m, Solent £183m, Thames Valley Berkshire £143m and Enterprise M3 £219m. The Ministry does not 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 region from ESCoE showed growth at 2.0% which compared with the UK average of 1.5%.

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 1,137 jobs were created in the Oxfordshire Science Vale Enterprise Zone, the fifth best performing zone in England, and 110 jobs in the Solent Enterprise Zone which was less successful. 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. A further 24 Zones were created in 2016 and 2017.

There was good news in Cowley, when BMW confirmed that production of its new electric Mini will start November. Deliveries of the first fully electric Mini will start in March 2020. Earlier this year, a BMW director said the company would have to consider moving car production out of the UK if there was a no-deal Brexit. Less positive in Reading, Thames Water’s plan to reduce costs has put 350 staff at risk of redundancy. A further 300 jobs could also go by not filling vacancies and through terminating contractor roles.