The State of Britain

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%.