The State of Britain

YH

ONS figures show the region’s economy the only part of the UK to contract, a whopping fall in Y&H unemployment, and Bradford the most improved place in the UK

Reading Time: 3 minutes

Chinese firm Jingye will invest £1.2bn in British Steel after it provisionally agreed to rescue the steelmaker. British Steel employs about 4,000 people in Scunthorpe and Teesside. The new owners did not put a number on how many jobs would be saved.

In North Yorkshire, Sirius Minerals has published a revised two-phase plan for the development of its fertiliser mine. The future of the mine was questioned after the firm cancelled plans to raise £403m through a bond sale.

The company will now seek to raise an initial £470m to fund the construction of mineshafts and the first section of a tunnel near Whitby. There will be separate funding for the rest of the tunnel and processing and shipping facilities at Teesside. This phase will be deferred for between 12 and 24 months.

The site would be the world’s largest mine for polyhalite, a naturally occurring fertiliser which is used in agriculture; more than 1,000 jobs would be created.

Also in Yorkshire, plans for a £200m business centre, power station, education campus and research centre in the east of the county have been approved. The Yorkshire Energy Park will be built on a former aerodrome at Hedon near Hull after councillors narrowly approved the project.

The aerodrome, owned by Hull City Council, will feature an energy generation plant providing power for the site and the National Grid. Several global companies have backed the project including EON, IBM, Vodafone and Chinese telecom giant ZTE. Final approval by the secretary of state for housing, communities and local government is still required.

The city of Bradford is the most improved place in the UK to live and work, according to a study by accountants PWC and think-tank Demos. The criteria used include jobs, health, income and skills, as well as work-life balance, house affordability, travel-to-work times, income equality, environment and business start-ups.

The best cities and towns to live in were named as Oxford and Reading, which retained first and second places for the fourth year in a row

As part of the government’s drive to make the North of England the world-leader in the creation of modern, green homes, Yorkshire, as part of the ‘Construction Corridor’, is receiving £30m.

Homes England will provide the funding directly to ilke Homes to increase production at the firm’s factory in Knaresborough. The terms of the funding are not known.

The Stats

Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its next estimates for Yorkshire and The Humber, 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 were not good, and showed the Y&H economy was the only part of the UK to contract, by 0.3%, down from 0.6% growth the previous quarter. This placed Y&H last (previous ranking ninth) 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 also showed that the region’s economy was one of three in the UK to contract in the quarter to March 2019, the others were Wales and the East Midlands. The Y&H economy declined by 0.3% in January to March 2019, following growth of 0.5% in October to December 2018.

Despite the poor overall picture, the finance and construction industries grew by 3.5% and 2.4% but education and the energy industry fell by 2.7% and 7.9%. In terms of sectors, production and services both made negative contributions with construction the only bright spot.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked Y&H seventh (previous ranking second) with growth of 1.3%, which suggests the region has outperformed other parts of the UK since the winter.

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 positively, data from the ONS showed unemployment in Y&H decreased by a whopping 32,000 to 105,000 between July and September; the decrease of 1.1% was by some way the best performance in the UK and took the overall rate to 3.9%. 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 73.7% in the region. UK employment was estimated at 76.0%.

In September, average earnings in Y&H were down by £24 to £550 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.

Y&H average property prices fell by 0.1% over the month to £166,745, which took annual growth to 2.2% which was the second highest in England. In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%.

Y&H’s film and TV industries aiming for critical mass, regional unemployment drops significantly and railway woes

Reading Time: 5 minutes

Unemployment in Y&H decreased by 28,000 to 108,000 between June and August, the fall of 1% was the best in the UK which left the overall rate at 4.0%.

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 74.0% in Y&H. UK employment was estimated at 75.9%.

Y&H average property prices increased by 0.2% to £165,767, which took annual growth to 1.0%. 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. Of the 650 constituencies in the UK, wages in Beverley and Holderness fell the eighth fastest.

Overall, in coastal constituencies median wages were £22,104 compared with £23,785 in non-coastal areas.

The ONS’s Personal Well-being (or Happiness) Index has ranked Y&H eighth out of the 12 UK ‘regions’ in terms of an improvement in life satisfaction since the last survey. The Northern Irish were the happiest folk in the UK with Londoners the most miserable.

Development

Channel 4 will have c250 of its 850-strong workforce in Leeds by next year after the broadcaster officially opened a new base in the city. The firm will broadcast a new daily lunchtime show live from Leeds, and C4 News will regularly be co-presented from the city.

Channel 4 chose Leeds over Birmingham and Manchester despite the pull of Salford’s MediaCityUK. The channel’s heads of drama and sport, plus other commissioning editors, are now in the city.

The broadcaster plans to spend £250m a year outside London increasing the proportion of programmes it makes outside the capital from 35% to 50%.

Given the above, there is a sense that Y&H’s film and TV industries can achieve critical mass. ITV has more than 650 staff in Leeds, a number of independent production companies have followed C4 and opened offices in the city plus the National Film and Television School is opening a branch in January.

Screen Yorkshire has also picked winners like Peaky Blinders, but although this is largely shot in Yorkshire, Birmingham has pinched some screen tourism linked to the show.

The gold standard in screen tourism has been set by Game of Thrones, which has brought £251m into the Northern Ireland economy since production began in 2010. Figures from Tourism NI suggest that 350,000 fans visit Northern Ireland every year and spend at least £50m. Screen Yorkshire needs to tick this last box.

The region will also benefit from the extra £90m the Department for Culture, Media and Sport has added to the Cultural Development Fund, which is for arts, culture, heritage and the creative industries in towns and cities outside London.

Grimsby deal well out of the Cultural Development Fund last year, now £18.5m has been allocated to York’s National Railway Museum.

Also on culture, The National Lottery Heritage fund has confirmed £13.6m towards the £27.4m project to move Hull’s last sidewinder trawler to a dry dock as part of a new visitor attraction.

Hull City Council is match funding £10m with a further £4.3m for the redevelopment of Queens Gardens. The Queens Garden’s site was once the world’s largest dock and will now be used to connect the three sites involved in the maritime history project.

Hull has also become the first city in the UK which has full fibre broadband. The seven-year £85m investment programme was carried out by local firm Kcom. The firm claims that £469m of incremental economic activity has occurred as a result.

Jobs

The government will open talks with other bidders for British Steel after failing to agree terms with Ataer Holding during the exclusivity period which started in August. There are 3,000 direct jobs in Scunthorpe with an estimated 20,000 indirect jobs linked to the site. The Financial Times reported that Network Rail, which buys c100,000 tonnes of track from British Steel, is considering cutting back its orders amid doubts over the firm’s future.

The Pennine Foods factory in Sheffield which makes ready meals has began consulting on closure. About 600 jobs are at risk at the facility which is part of the 2 Sisters Food Group and is described by the firm as loss making.

Doncaster Council has agreed a draft budget which details plans to find £16.8m in savings in the next four years. Consequently 80 council jobs would be cut along with 15 in children’s services.

Lincoln based building firm, Simons Group, which specialised in retail, healthcare, and commercial projects across the UK,  has gone into administration. Administrators said up to 124 job losses are expected

Transport

The Northern Powerhouse Partnership’s Independent review ‘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.

It recommends instead, 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.

An upgrade to the line between Sheffield and Manchester announced in 2018 and designed to improve journey times by ten minutes has been delayed. The Hope Valley line will now not be upgraded until 2023, allowing journey times to be cut from 50 to 40 minutes.

Offshore wind continues to benefit the Yorkshire coast and Yorkshire and the Humber house prices rise the fastest in England

Reading Time: 5 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. After Jaywick, eight areas of Blackpool are the most deprived in England with an area of Hull the most deprived part of Yorkshire and The Humber (ranked 21st). The Ministry divides England up into 32,844 neighbourhoods averaging about 1,500 residents or 650 households each.

In terms of local authorities, 45% of Hull was deemed to be deprived, ranking it fourth in England, Bradford was ranked 11th, North East Lincolnshire 17th, and Rochdale and Sheffield also made the top thirty. There was little change in performance since 2015, with most areas marginally improving on their previous rankings. The least deprived area of England is an area near Great Missenden in the Chiltern Hills, Buckinghamshire, few areas outside the South East were near the end of the table, except the Burn Bridge area of Harrogate, which was second bottom.

The MHCLG found concentrations of deprivation in a number of coastal towns, many of which are in Yorkshire and The Humber, but there was no new money for the region in the latest tranche from the Coastal Communities Fund. Y&H and the North East were, however, awarded £17.2m as part of a £95m pot to revive historic high streets, with Scarborough, Selby and Barnsley some of the half dozen or so Y&H 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, an average of 42 trains were cancelled daily, representing 12.9% of services. At Northern, punctuality fell to 79.4% from 82.2% and an average of 139 trains were cancelled each day, representing 5.3% of services. Another report by passenger watchdog Transport Focus (based on data from the Office of Rail and Road) has found Hull Trains had the worst record for punctuality in the UK during the 12 months to the end of June. Hull Trains were late 36.8% of the time, followed by TPE at 38.7%. The latest National Rail Passenger Survey of the 25 UK rail companies ranked Northern 23rd and TPE 18th but overall satisfaction with Hull Trains was better, and it was placed joint third.

Development
The government has announced that twelve renewable energy projects have won ‘contracts for difference’ auctions, which guarantee energy prices for suppliers. Offshore wind projects at Dogger Bank, off the Yorkshire coast, will generate five gigawatts of capacity (enough electricity for 4.5m UK homes) at prices ranging from £39.65 to £41.61 per megawatt hour. This is 30% below the £57.50 auction price achieved in 2017 and is below the £50 per megawatt hour that wholesale electricity prices have hovered around this year. These figures suggest no taxpayer subsidy is needed and evidences offshore wind as a UK success story. Work is expected to start in January 2020 at Dogger Bank and the first power could be produced in 2023. The project is located 80 miles off the coast and consists of three sites. The electricity will come ashore at sites in Teesside and Cottingham in East Yorkshire. Energy firm SSE and its Norwegian partner Equinor will invest about £9bn in the project. The three sites will have more than 630 turbines standing 190m high, each built by Siemens in Hull. In February, the first power was produced by the Hornsea One development and two other adjacent wind farms are also under development off the Yorkshire coast.

A planned £403m bond sale by North Yorkshire potash miner Sirius Minerals has been cancelled. The firm will now undertake a six-month review of four different financing options for the project near Whitby. The project would create the world’s largest mine for polyhalite, a naturally occurring fertiliser which is used in agriculture. The mine is due to open in 2021 and create more than 1,000 jobs. Part of the project includes a 23-mile tunnel to transport minerals to a processing plant near the former Redcar steelworks. A request for an intervention with taxpayers’ money was declined by the government.

Jobs
The Clydesdale and Yorkshire Bank is to close its Leeds operating centre. The group, which is due to complete its integration with Virgin Money shortly, currently has a headcount of about 9,500 of which c1,500 jobs will go by the end of 2021. Jobs will disappear from the brand and marketing and retail distribution divisions. Yorkshire Bank’s Merrion Way office in Leeds is expected to close by September 2021, with the group moving its functional corporate office to another site in the city. Overall, most of the 330 jobs from the Leeds, Norwich and Edinburgh operations will be redeployed, although there will be some redundancies.

In Hull, Ideal Standard is planning to close its factory with the loss of 85 jobs. The company intends to move production of its baths to a factory in Egypt. Some functions such as customer service will remain in the city.

The Stats
For the first time, the ONS has published quarterly GDP estimates for Yorkshire and The Humber and 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 Yorkshire and The Humber economy grew by 0.6%. This ranked Y&H ninth 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 contracted by 1.1%. UK growth over the same period was 1.5%.

The quarter to Dec 2018 showed the construction and wholesale/retail trade industries grew by 1.8% and 2.9% respectively and made the largest positive contributions to growth but the financial and insurance industry fell by 3.7% and was a major drag on the economy. Overall, the production and services sectors made no contribution to growth with the main driver at sector level being construction. More recent estimates (six months later) for the year ended June 2019, published by ESCoE last month, ranked Y&H second with growth of 1.7%, which suggests the region has had a better 2019 so far relative to other parts of the UK.

More data from the ONS showed unemployment in Y&H fell by 18,000 to 116,000 between May and July, a significant drop of 0.6% 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 74.0% in Y&H. UK employment was estimated at 76.1%.

Y&H average property prices increased by 1.9% to £167,181, which took annual growth to 3.2% which was the most in England. In comparison, UK prices grew by 0.5% to £232,710 during July, an annual growth rate of 0.7%.

Yorkshire & The Humber’s economic growth only beaten by London but South Yorkshire and Lincolnshire defined as ‘less developed’ regions by the EU

Reading Time: 4 minutesGrowth in Yorkshire & The Humber was 2.1% in the year to June 2019 according to estimates from ESCoE. The uplift from the previous quarter’s growth of 1.7% made Yorkshire & The Humber the second most improved region (out of twelve UK ‘regions’) and ranked it second overall. 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 Yorkshire & The Humber compares favourably with most regional economies which have shrunk.

Unemployment in Yorkshire & The Humber increased by 7,000 to 136,000 between April and June, an increase of 0.3% to 5.0%; this was the second highest rate 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 73.3% in Yorkshire & The Humber. UK employment was estimated at 76.1%, the joint highest since comparative records began in 1971.

In June, average earnings in Yorkshire & The Humber increased from to £564 to £574 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.

Yorkshire & The Humber average property prices increased during the month, the 0.6% uplift to £161,997 took the annual growth rate to 0.9%. 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 in Manchester to promise a high speed rail link between Leeds and Manchester. High speed rail is expected to arrive in Leeds and the rest of northern England by 2033. But now the government has launched a review of the 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 over the project 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, which runs under Yorkshire, Lancashire, 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. Ineos and Alpha Energy have shale gas exploration rights in Yorkshire.

On employment, the 3,000 British Steel jobs in Scunthorpe could be safeguarded after Atear Holdings, which owns nearly 50% of Erdemir, Turkey’s biggest steel producer, said it was in advanced talks with the Official Receiver. British Steel was put into compulsory liquidation in May. Atear Holdings is the investment vehicle of the Turkish military pension fund.

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 are likely to slip below the threshold of 75% EU average GDP per head that would qualify them for ‘less developed region’ status. Existing less developed regions like Cornwall and West Wales & the Valleys, will be joined by South Yorkshire and Lincolnshire, as well as the Tees Valley & Durham. These areas would likely have received at least €500 per head in EU regional development funding over 2021-27 which adds up to an extra £950m.

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. North Yorkshire would fall into this category, as well as East Anglia, East Wales, Greater Manchester, Leicestershire, Rutland & Northamptonshire, Outer London South 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.

Regional unemployment the second highest in the UK and concerns continue over Yorkshire & The Humber’s overlapping Local Enterprise Partnerships

Reading Time: 3 minutesUnemployment in Yorkshire & The Humber was almost unchanged at 136,000 between March and May, a slight increase of 0.1% to 5.0%. At 2.6% and 5.6% 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%.

Yorkshire & The Humber’s average property prices increased by 0.4% to £162,520 during the month which uplifted the annual growth rate to 1.9%. In comparison, UK prices increased by 0.1% to £229,431 during May 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 overlapping LEPs in the Humber and North Lincolnshire which means these LEPs will be unable to bid for funds from the Government’s proposed Shared Prosperity Fund, which will replace EU structural funding after Brexit. An overlap in Yorkshire will disappear after Chesterfield decided to withdraw from the Sheffield City Region (‘SCR’) LEP next year. The town is currently part of the SCR grouping and the Derby, Derbyshire, Nottingham & Nottinghamshire (D2N2) LEP.

The SCR LEP has received £365m, the 7th most in England, whereas Leeds City Region LEP has received £695m, the most in England. Other Yorkshire & The Humber LEPS awards have been Greater Lincolnshire £155m, York, North Yorkshire & East Riding £146m and Humber £142m. 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 region from ESCoE showed growth at 1.4% 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 only 370 jobs were created in the Aire Valley Leeds Enterprise Zone, with 320 jobs lost in the Humber Enterprise Zone which made it the second 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.

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. North East Lincolnshire could see a fall of 8%, the fourth largest decline in England, with North Lincolnshire and Scarborough eighth and ninth, losing 7% each. 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 11% or £12m in Yorkshire & The Humber. 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 similar to the funding offered to Grimsby.

The North-South divide in focus and the tale of two gas projects

Reading Time: 4 minutesUnemployment in Yorkshire & The Humber decreased by 10,000 to 134,000 between February and April, a drop of 0.3% to 4.9%. 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%.

Yorkshire & The Humber’s average property prices increased by 0.3% to £161,443 during the month which uplifted the annual growth rate to 2.5%. In comparison, UK prices increased by 0.7% to £228,903 during April which held the annual growth rate at 1.4%.

Research by the think-tank, the Institute for Public Policy Research North, showed Yorkshire & The Humber lost 112,000 public sector jobs in the last decade. This represented a 19% drop but the North East saw the biggest percentage cut at 24% and at 133,000 the North West lost most jobs. 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 Yorkshire 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.

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’s report recommended more effective devolution, more integrated national and sub national transport networks and a 25 year £250bn renewal fund.

On the trains, a survey by the Northern Powerhouse Partnership (NPP) found companies believed that 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.

Events like the Tour de Yorkshire and World Triathlon Series are enticing foreign tourists to Yorkshire according to the latest government figures. A record 1.4m overseas visitors arrived in the county – up 4% on the previous year – adding £600m to the local economy. Also on tourism, Kirklees Council has unveiled plans for a new cultural area in Huddersfield, including a new library, art gallery, museum and live music venue, have been unveiled. The £250m development is part of a 10-year strategy to attract more visitors to the town.

Network Rail is interested in buying part of British Steel and other bidders have until the early July to put in offers for all or part of the firm. State-owned Network Rail wants to take over the British Steel division responsible for the welding, finishing and storing of rails for the UK’s train network. More positively, in North Lincolnshire, Wren Kitchens plans to create up to 1,200 new jobs at a new £120m factory at its headquarters in Barton-upon-Humber.

In Hull, electrical engineering company Heeco – which was founded more than 100 years ago – has entered administration with the loss of 47 jobs. Heeco specialised in electrical design for customers like the Ministry of Defence. Also in the city, about 300 council jobs will be brought back into the city centre in an effort to keep the area viable. Workers will have to allow extra time for their commute though, after data collected by navigation technology company TomTom found the city has been ranked the third most congested in the UK, with a 30 minute commute likely to take about an hour during peak times. Only London and Edinburgh were more congested.

In West Newton, a few miles north east of Hull, three firms have discovered what could potentially be the UK’s largest onshore gasfield. Initial analysis suggests the site could house some 189bn cubic feet of gas – enough energy to power 3.4 million homes for an entire year – and would be the biggest land-based hydrocarbon discovery in the UK since 1973. The site is well positioned in infrastructure terms with major pipelines and a North Sea gas import terminal close by. Most onshore gas fields in the UK are in sandstone rock, but the West Newton discovery is in more unpredictable but efficient carbonate.

A public inquiry has begun into plans by energy firm Ineos to drill a test hole for shale gas at a site near Rotherham. The local council turned down an application last year to drill a test hole on a site at Woodsetts. Ineos told the inquiry the initial works were to test the geology and the firm provided details of a planned 270-metre-long earth wall to protect the village from excess noise. Rotherham Council has already faced an appeal from Ineos against its decision to turn down exploratory drilling at nearby Harthill.

On development, the government will not hold a public inquiry into a £650m development in York. The York Central scheme will see up to 2,500 homes and 86,600 square metres of office space built near the city’s railway station. At 45 hectares, the project is one of the largest regeneration sites in England and
involves Homes England, Network Rail, City of York Council and the National Railway Museum. Work is expected to start later this year and take 20 years.

Yorkshire & The Humber property prices show the strongest growth in the UK, British Steel worries in Scunthorpe and the Sheffield City Region spins into existence

Reading Time: 4 minutesGrowth in Yorkshire & The Humber increased by a modest 0.2% to 1.4% in the year to March 2019 according to estimates from ESCoE. At 2.7% and 0.7% London and Northern Ireland had the highest and lowest growth rates in the country respectively. The East of England was the most improved region of the UK with growth accelerating from 0.9% to 1.9%. The UK growth rate for the same period was 1.5%.

Unemployment in Yorkshire & The Humber fell sharply by 12,000 to 130,000 between January and March, a drop of 0.5% to 4.7%. At 2.4% and 5.4% the SW of England and the North East had the lowest and highest unemployment rates in the country. The national unemployment rate stands at 3.8%.

In March, average earnings in Yorkshire & The Humber increased to £564 per week. London had the highest average earnings of £762 whereas the Northern Ireland had the lowest of £513. In the UK, average earnings grew by 3.3% or by 1.5% after inflation.

Yorkshire & The Humber’s average property prices increased by 1.8% to £162,129 during the month which meant annually prices were up by 3.6%, the strongest growth in the country. In comparison, UK prices dropped by 0.2% to £226,798 during March which cut the annual growth rate to 1.4% although transactions were up by 1.4%.

In its estimate of regional public spending and regional tax revenues in 2018, the ONS has concluded that Yorkshire & The Humber had a deficit of £11.8bn. This compares with London which had the highest surplus of £34.3bn. On a per person basis Y&H’s deficit was £2,164 whereas London had the highest surplus of £3,905 per person and Northern Ireland had the biggest deficit per person at £4,939. The only areas of the UK to run surpluses were London, the south-east of England and the east of England. At a national level, the UK had a deficit of £636 per person which splits into deficits of £106, £2,452, £4,395 and £4,939 for England, Scotland, Wales and Northern Ireland.

British Steel has been placed into liquidation, putting 5,000 direct jobs and many indirect jobs in the supply chain at risk. Of these there are 3,000 direct jobs at Scunthorpe – from which Network Rail sources 95% of its rails – with an estimated 20,000 indirect jobs linked to the site. The company was transferred to the Official Receiver as the firm did not have sufficient funds to pay for an administration. The Official Receiver has said good progress is being made towards finding a buyer for the company with eighty firms having expressed an interest of which sixty have been sent non-disclosure agreements. The Government provided British Steel with a £120m bridging loan in April to meet EU emission rules but a further non commercial loan is unlawful under EU state aid rules. Greybull Capital, a private equity firm, bought Tata Steel’s ailing long products business in 2016 and (in 2017/2018) returned the now rebranded British Steel to profit until a recent market slump reduced cash flow.

In Yorkshire, the Filmore and Union cafe chain has collapsed with 80 job losses. The firm – which had 17 cafes in Yorkshire – employed c230 people. Administrators have arranged a partial sale of the production kitchen and 10 stores safeguarding 150 jobs.

Bradford College has started a consultation over the potential loss of 131 jobs after it successfully restructured its debt with help from the Education & Skills
Funding Agency’s Restructuring Facility. In Scarborough, coachbuilder Plaxton says there will be no redundancies following a takeover of its parent company Alexander Dennis by Canadian NFI Group for £320m.

The Government has approved a Sheffield City Region Combined Authority deal which will run until at least 2022. Former chancellor George Osborne signed a non-binding agreement with local politicians in October 2015, providing for an elected mayor who would have power over transport, strategic planning and skills plus £900m over 30 years. In September 2017, the leaders of Barnsley and Doncaster council voted down the offer, instead backing a One Yorkshire deal. Barnsley Central MP Dan Jarvis was elected Mayor of the Sheffield City Region in May 2018. Now, the four leaders of Sheffield, Rotherham, Barnsley and Doncaster councils have accepted the latest proposal but any council wishing to leave the Sheffield City Region after 2022 and join a wider Yorkshire deal may do so. Critics of the deal were emboldened by news that a new interim head of communications or spin doctor at the authority will earn £700 per day, almost double the weekly average wage in Doncaster. The head of communications will report directly to Dan Jarvis. Analysis by the BBC and the Chartered Institute of Public Finance and Accountancy (Cipfa) has suggested Rotherham Council is one of 11 councils in England which risks running out of cash reserves within 4 years if recent spending levels continue.

Some significant regional infrastructure projects this month. The five mile £120m Lincoln Eastern Bypass will mean a series of road closures in Lincoln over the next 12 weeks. Further south, the northern and southern sections of the proposed £100m Spalding Western Relief Road were not objected to by South Holland District councillors. Also, over £8m will be spent widening and improving the A630 West Moor Link road in Doncaster; funded by c£5m from the Sheffield City Region and £3.3m from Transport for the North, England’s first sub-national transport body. The project will start in July and finish in March 2020. Two major Environment Agency projects got underway in the region. The first, a £42m scheme to improve flood defences along the banks of the Humber in Hull after properties were flooded in the city in 2013. Secondly, a £7m project to protect homes and businesses on the Lincolnshire coast by pumping 400,000 cubic metres of sand onto several of the county’s beaches.

Grimsby praised by the House of Lords, Yorkshire and fracking, and the 30th anniversary of the Settle to Carlisle railway line reprieve

Reading Time: 3 minutesUnemployment in Yorkshire & the Humber dropped slightly by 2,000 to 135,000 between December and February; a cut of 0.1% to 4.9% – the third highest in the UK. The SW of England had the lowest unemployment rate in the country at 2.6% and the NE of England had the highest at 5.6%. The national unemployment rate stands at 3.9% and average UK earnings grew by 3.5% or by 1.6% after inflation.

Y&H average property prices fell by 2.5% to £155,685 during the month which meant annually they were flat. In comparison, UK prices dropped by 0.8% to £226,234 during April which cut the annual growth rate to 0.6%.

There were some positive developments in East Yorkshire; first Siemens have submitted an outline planning application for a £200m facility to manufacture new London Underground trains in Goole. The factory could begin operating in 2023, creating about 700 jobs – the project was first unveiled in 2018 as part of London Underground’s £1.5bn ‘Deep Tube’ upgrade programme. Secondly, Grimsby will be the maintenance hub for the 90 turbines at Triton Knoll, a new wind farm off the Lincolnshire coast; more than 70 jobs are expected to be created. The wind farm will produce enough energy to power 800,000 homes; 35 miles of cable is being laid beneath Lincolnshire to connect the turbines to a new power station near Boston. Thirdly, condom maker, Reckitt Benckiser will open a new £105m R&D centre in Hull in June. And finally a House of Lords’ report, ‘The future of seaside towns’ praised Grimsby’s balanced approach to regeneration, highlighting the towns £67m project to improve its dock area and create thousands of homes.

The key tool used by the Government to address deprivation in seaside towns – the Coastal Communities Fund – has been deployed in Scarborough. Seagrown, was awarded £472,000 to establish a seaweed hatchery and hopes for its first crop from the North Sea within a year.

British Steel has announced it is to cut 400 jobs from its worldwide operations – the company employs 4,000 people at its Scunthorpe plant – but has not confirmed which locations will lose staff. Most of the redundancies will be in managerial, professional and administrative roles across its European businesses. British Steel was formed in June 2016 after Greybull Capital bought assets from Tata Steel.

The firm which runs the Yorkshire Post, the Sheffield Star and the Wakefield Express has announced up to 60 job losses. It is not clear where the (at this stage voluntary) redundancies will occur.

On retail, the Debenhams store in Lincoln has escaped the axe but M&S is to close in Boston after 100 years; 40% of the 49 members of staff have been redeployed to other sites.

On regional infrastructure, Lincolnshire County Council has awarded the earthworks contract on the £120m Lincoln Eastern Bypass to Amery Construction. The firm takes over from Hawk Plant Ltd which went into administration in January. In York, a £4m project to widen a bridge over the River Ouse has been completed.

On the railways, East Midlands Trains operator, Stagecoach, has been prohibited from bidding for three rail franchises because of a dispute over who carries the liability for pensions. Dutch operator Abellio has won the East Midlands Railway franchise instead. Abellio will run the franchise from August 2019 until 2027.

The UK’s first hybrid tram-train service which started in October 2018 between Sheffield and Rotherham has managed c500,000 journeys in six months. In Sheffield city centre it travels on the city’s tram tracks before switching onto rails before taking passengers to Rotherham. The project was two years late and costs ballooned from £15m to £75m.

On the 30th anniversary of its reprieve, Michael Portillo has explained why the government did a u-turn and kept the Settle to Carlisle Railway line open. An eight year campaign to save the 73-mile-long route across the Yorkshire Dales succeeded in increasing usage, and then an engineer found a way of repairing the Ribblehead Viaduct (pictured above) for a third of the cost, enabling Portillo to sign the reprieve order.

In the air, an extension to the terminal building at Leeds Bradford Airport has started. The project will include larger immigration and baggage reclaim areas, improved departure gate facilities and more bars and restaurants. Not such good news at Doncaster airport after Flybe reduced services as part of its winter schedule and – according to pilots union Balpa – will close its base at the airport.

Prosperity in northern England would be enhanced by a relaxation of the UK’s rules on fracking, says Sir Jim Ratcliffe. Also, the UK’s shale gas tsar – who has resigned after six months – said the industry was being throttled by rules preventing mini earthquakes. Under current rules, drilling must be stopped for 18 hours if it triggers earth tremors above a 0.5 magnitude on the Richter scale. This compares with America where a 4.0 limit is allowed and where, according to Ratcliffe’s energy firm Ineos, c1m shale gas wells have been drilled safely. Ineos has exploration rights in Yorkshire and believes that the UK could emulate the US shale gas boom – most of the UK’s shale gas reserves lie under the north of England. An American energy company, Alpha Energy, is buying Third Energy’s onshore fracking operations, including its planned site at Kirby Misperton in Ryedale, North Yorkshire.

Y&H unemployment the highest in the UK, Channel 4 chooses Leeds and a bright future for East Yorkshire’s renewables sector

Reading Time: 4 minutesUnemployment in Yorkshire & Humberside increased by 16,000 to 144,000 between November and January; the increase of 0.5% to 5.2% was the worst in the UK. At 2.9% the SW of England had the lowest unemployment rate in the country. The UK unemployment rate stands at 3.9%.

In March average earnings in Yorkshire & Humberside decreased to £561 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

Yorkshire & Humberside average property prices fell by 1.0% to £160,420 during the month which trimmed the annual growth rate to 2.9%. In comparison UK prices dropped by 0.8% during March which cut the annual growth rate to 1.7%. The Yorkshire & Humberside market was also slower with the latest figures to September 2018 showing volumes down by 2%.

More positively there was a potentially game changing regional development this month with a boon in particular for Leeds city centre. Last year Channel 4 announced it was moving its headquarters from London and transferring 200 of its 800 staff. The broadcaster has chosen the Majestic building, the former cinema and nightclub which inspired the Kaiser Chiefs song ‘I predict a riot’ as its new HQ. Leeds beat shortlisted Birmingham and Greater Manchester to win the project; the second half of 2020 has been pencilled in for the move in date. The relocation could add £1bn and 1,200 jobs to the Leeds economy as other TV firms – UKTV, Wise Owl Films, Workerbee, Simplestream and PACT – have subsequently announced moving some or all of their operations to the city. In economic development terms the pump priming project could be significant. More generally Channel 4 aims to increase regional programming by £250m over the next five years.

There was also good regional news when Big 4 accountancy firm PwC said it had taken on 60 staff at its new Bradford office and that headcount could rise to 225. The full service firm which offers advice domestically and internationally took over office space on Godwin Street. There was also a positive development for Humberside after HMG announced that 30% of the UK’s electricity will be generated by offshore wind turbines by 2030. Siemens in Hull produces blades for the world’s largest wind farm under construction – off the East Yorkshire coast – and other firms in the city and in Grimsby are major suppliers to the industry.

Despite the positive renewable sector news, an unwelcome development in Hull came when a manufacturer of bedroom and dining furniture went into administration. Kingstown Group employed 280 people – on an 11 acre site in Leads Road – who were told there was insufficient cash to make redundancy payments. Setbacks to the region’s food manufacturers have come with reports that Freshcook is set to close a site in Lincolnshire. The firm said about 520 employees could be offered roles at other sites in the county. This month also saw more than 450 jobs at risk at Tulip’s Boston meat processing plant after it lost its deal with Marks & Spencer. More positively in the food retail sector there are plans for a £250m food and leisure attraction at Future Park near Knaresborough that will create 1,000 jobs. The attraction will be operated by Eataly ‘Eat Italy’, which runs a similar park in Bologna. It could open in 2022 and attract 3.5m visitors a year.

On regional rail transport, the blame game as to why six-carriage long trains at Leeds station have been delayed by two years continues between Northern and Network Rail. The longer trains were to be introduced at the end of this year but will now not enter service until late 2021. The delay is because longer platforms at Leeds will not be ready in time. Northern still plans to start phasing in its £500m fleet of new short trains from this spring, aiming to replace its thirty year old Pacer trains by the end of this year. The unsatisfactory state of the region’s railways has been highlighted in a report from the West Yorkshire Combined Authority (WYCA) which has claimed journey times on some routes are no better than in the early 1980s. Meanwhile Hull Trains – which operates services to London – hopes its £60m investment in Japanese-built Hitachi Class 802 will improve its service. The latest ORR figures for the last quarter of 2018 showed that 68.8% of journeys with Britain’s smallest rail company arrived on time, the lowest figure of any train operator.

On regional regeneration, a £1.5m grant from Scarborough Council will complement a £4.7m lottery grant which supports a £7m project to upgrade Scarborough’s South Cliff Gardens. The gardens are at South Bay which claims the title of the country’s first seaside holiday resort. The £4.4m grant which Wakefield Council won from HMG’s Cultural Development Fund in January will be deployed in turning the city’s market hall into a hub to help establish creative businesses. The market hall site – which closed last year – was going to be demolished but will now, the Council hopes, create 600 new jobs. It’s not quite Dallas yet, but Rotherham Council has dropped its objection to test drilling for shale gas at Ineos’s site in Woodsetts.

The British Library is planning a new base in Leeds and improvements to its site near Wetherby. The Wetherby operation is the home of the UK’s national newspaper collection; more than three centuries of local, regional and national newspapers.

The Northern Powerhouse Minister, Jake Berry, speaking at the Great Northern Conference in Leeds late last month, warned of creating a second ‘North-South divide’ between rural and urban areas if too much focus was put on cities. After the One Yorkshire devolution deal was ended by Communities Secretary, James Brokenshire, earlier in February, he said it was time for local leaders to rise to the challenge of brokering a new arrangement for transferring powers from Whitehall.