The State of Britain

ONS and ESCoe regional growth figures suggest the EM plummets down the UK rankings over nine months, the economy contracts in Q1, but a good increase in regional pay

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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 Midlands Minister, Robert Jenrick. The Towns Fund prospectus provides information to councils in 100 places chosen to pioneer Town Deals and councils will receive a share of £16.4m funding to shape up their plans.

The 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 place 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.

Thirty towns are in the Midlands Engine area. EM towns include Corby, Mansfield Northampton, and Staveley amongst others.

The region did well on infrastructure investment this month.  Of the £255m Housing Infrastructure Fund spend announced by the Chancellor, £43m was earmarked for the EM.

A bid from Rutland County Council to deliver a new school and infrastructure at St George’s Barracks, North Luffenham, secured £29m. Also Leicestershire County Council was awarded £15m for the Melton Mowbray Southern Distributor Road.

Legislation to create two unitary authorities in Northamptonshire to replace the troubled county council and the district and borough councils has been parked.

The government had already approved the plan, and Parliament was expected to pass it before the election, but it was put on hold after Labour called for a third unitary council in the county, to serve Northampton only.

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 East Midlands, 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 EM’s economy annually grew by 2.0%, down from 3.4% growth the previous quarter. This placed the EM fifth (previous ranking first) 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 Y&H and Wales. The EM economy declined by 0.2% in January to March 2019, following growth of 0.3% in October to December 2018.

In this period, the education industry grew by 5.6% and made the largest positive contribution to growth whereas administrative and support service activities fell by 6.9% and made the largest negative contribution.

Overall, the services sector was the only positive contributor to GDP, while agriculture and production went into reverse and construction made no contribution either way.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked the EM eleventh (previous rank ninth) with growth of 0.7%, which suggests the region has had a poor summer relative to other parts of the UK and has slipped from first to eleventh in nine months.

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

More data from the ONS showed unemployment in the region increased by 6,000 to 101,000 between July and September; the uplift of 0.2% took the overall rate to 4.5%. 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 76.7% in the region. UK employment was estimated at 76.0%.

In September, average earnings in the EM were up by £30 to £584 per week, the second highest uplift in the UK. 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.

EM’s average property prices fell by 1.2% over the month to £194,219, which took annual growth to a meagre 0.1%. In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%.