The State of Britain

Electric Jaguars will be built in the region and no evaluation is being made of the impact of £1.1bn of taxpayers’ money on West Midland’s economic growth

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Unemployment in the West Midlands decreased by 13,000 to 140,000 between March and May, the decrease of 0.4% to 4.8% was the best in England. 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 West Midland’s average property prices increased by 0.2% to £196,489 during the month which uplifted the annual growth rate to 2.7%. 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 two overlapping LEP areas in the West Midlands which means that 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. Greater Birmingham and Solihull (‘GBS’) LEP overlaps with Worcestershire LEP in the south of the region and with Stoke-on-Trent and Staffordshire LEP in the north.

The GBS LEP has received £433m, the 5th highest in England since 2015, whereas Worcestershire LEP has received £72m, the second lowest in England. Other West Midland’s LEPS awards have been Black Country £218m, Coventry and Warwickshire £132m, Stoke-on-Trent and Staffordshire £121m and The Marches £105m. 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 1.2% 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 2,680 jobs were created in the Birmingham City Centre Enterprise Zone, the third best performing zone in England, and 146 jobs in the Hereford 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 are plans to expand one of the newer areas at the 140 hectare Ceramic Valley enterprise zone in Stoke-on-Trent.

On jobs, Jaguar Land Rover (JLR) is to build a range of electric vehicles at its Castle Bromwich plant in Birmingham securing 2700 jobs. In January, the firm said it would cut 4,500 jobs, with the majority coming from the UK. That followed 1,500 jobs lost in 2018. Initially the plant will produce an electric version of the Jaguar XJ replacing the petrol and diesel versions which have been made since 1968.

German food processor, Muller, has spent £50m upgrading its site at Donnington Wood, Telford, allowing it to produce 500m pots of yoghurt a year. By doubling the size of its factory and reducing its dependence on imports it has created 65 new jobs. Three new production lines have been built, alongside a new cooling facility and a new warehouse. Three existing lines have also been upgraded. Muller said if demand continued to grow it would consider expanding further in the future, to produce 700m pots a year.

More positive news in Stoke. In January, insurance firm Ageas announced it was closing a call centre at a leased office at Trentham Lakes. The Atlanta Group, which owns insurance firms Autonet and Swinton, says it’s taking on the lease from September and will offer work to most of the 220 staff.