The State of Britain

Middlesbrough again the most deprived authority in England and the North East retains the highest unemployment rate in the UK despite a significant improvement

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The Ministry of Housing, Communities and Local Government has published its deprivation index which looks at an area’s levels of income, employment, education, health and crime as well as housing services and living environment. Jaywick in Essex, near Clacton-on-Sea, was previously found to be the most deprived in the last two reports in 2010 and 2015 and it has won this unwelcome accolade again. The Ministry divides England up into 32,844 neighbourhoods averaging about 1,500 residents or 650 households each. The Thorntree area of Middlesbrough was the first area in the NE to be featured and was ranked 46th.

In terms of local authorities, 49% of Middlesbrough was ranked as deprived, the worst in England, and Hartlepool was ranked tenth with 36%, both authorities had the same rankings in 2015. Gateshead and Northumberland were both in the top ten more deprived areas relative to 2015 and Newcastle, Redcar /Cleveland and South Tyneside all moved up the deprivation rankings.

Middlesbrough, Hartlepool and Redcar are some of the NE 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 Ministry found concentrations of deprivation in a number of coastal towns, many of which are in the North East, but there was no new money for the region in the latest tranche from the Coastal Communities Fund. The North East and Yorkshire were, however, awarded £17.2m as part of a £95m pot to revive historic high streets, with Hexham, North Shields and Middlesbrough benefiting.

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.

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. The latest National Rail Passenger Survey of the 25 UK rail companies ranked Northern 23rd and TPE 18th. Last month, popular Virgin Trains, which was ranked second with a 91% satisfaction rating by passengers, lost its franchise to TPE’s parent.

Also on the trains, Newton Aycliffe based Japanese train builder Hitachi, has failed to win an order to supply 42 new trains for the Tyne and Wear metro. Hitachi was in competition with Spanish firm CAF and Swiss train manufacturer Stadler for the £500m contract, the winner will be announced in January. Hitachi’s County Durham plant employs 700 people and built the East Coast Mainline’s new Azuma trains. Recently it won a £400m order for new Midland main line carriages but failed to secure a £1.5bn London Underground contract. CAF has a factory in Newport and Stadler has one in Liverpool.

The Stats
For the first time, the ONS has published quarterly GDP estimates for the North East 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 North East economy grew by 0.9%. This ranked the North East eighth 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 information/communication and construction industries grew by 6.8% and 3.2% respectively and made the largest positive contributions to North East growth. The transportation and storage industry experienced negative growth of 5.8% and was the largest drag on the region’s economy. Within the North East, the services sector contributed positively to GDP growth but output in the production sector contracted. More recent estimates (six months later) for the year ended June 2019, published by ESCoE last month, ranked the North East ninth with growth of 1.3%.

More data from the ONS showed unemployment in the North East fell by 9,000 to 63,000 between May and July, a significant drop of 0.7% to 5.0%. This, however, was still the highest unemployment rate in the country. The South West had the lowest rate at 2.4% with the UK rate at 3.8%. The South West also had the highest employment rate at 80.8% which compared with 71.1% in the North East. UK employment was estimated at 76.1%.

Last month, North East average property prices increased the most in the UK by 1.7%, this was all reversed this month, with prices dropping by 2.1% to £127,466. Annually prices have dropped by 2.9%. In comparison, UK prices grew by 0.5% to £232,710 during July, an annual growth rate of 0.7%.