The State of Britain

The gap between the EM’s tax take and public spending shrinks, the region sees the biggest drop in unemployment in Britain and £3m is spent on finding a missing £10m loan

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In the ONS’s estimate of regional public spending and regional tax revenues in 2019, the EM had a deficit of £6.3bn, a smaller shortfall than the £7.5bn recorded in 2018. This compared with London, which had the highest surplus of £38.9bn.

On a per person basis, the EM’s deficit was £1,303, lower than the £1,578 recorded in 2018. London had the highest surplus of £4,369 per person whereas Northern Ireland had the biggest shortfall at £4,978.

The only areas of the UK to run surpluses were London, the SE of England and the East of England. The West Midlands and the North East were the two regions in the UK to increase their net fiscal deficits over the year; all the other regions reduced their shortfalls.

At a national level, the UK had a deficit of £623 per person which splits into deficits of £68, £2,713, £4,289 and £4,978 for England, Scotland, Wales and Northern Ireland respectively.

Public spending in the EM was £56.6bn or £11,784 per head, an increase on the 2018 figure of £55.7bn. London had the biggest spend of £123.9bn or £13,826 per head whereas Northern Ireland had the lowest at £27.9bn or £14,821 per head. Total government spending was £853bn or £12,835 per head.

The EM collected £50.8bn in taxes in 2019. London contributed the most to the Exchequer at £161.9bn, compared with the lowest contribution of £18.5bn which was from Northern Ireland. Overall the state raised £811.3bn or £12,213 per head in taxes, an uplift of £34.1bn or £461 per head compared with 2018.

More data from the ONS showed unemployment in the EM fell by 16,000 to 95,000 between September and November 2019; the decrease of 0.6%, the biggest drop in Britain, took the overall rate to 3.9%. Northern Ireland had the lowest rate at 2.3% with the UK rate at 3.8%.

The South West had the highest employment rate at 79.8% which compared with 77.2% in the EM. UK employment was estimated at 76.3%.

EM’s average property prices increased by 1.1% during November 2019, the uplift to £197,792, increased annual growth to 2.5%. In comparison, UK prices increased by 0.4% to £235,298 an annual growth rate of 2.2%.

Regional governance was again in the spotlight this month after it emerged a law company set up by Northamptonshire county council and two other local authorities has recorded a £1.2m loss. The firm, LGSS Law, is owned by the three councils and offers public sector legal services. A £1m overdraft offered by Northamptonshire County Council has been largely drawn down as has £375,000 of a Cambridgeshire Council overdraft.

Northamptonshire County Council suffered its own cash flow problems in 2018 which led to a scheme to abolish it and seven other district and borough councils. The mismanagement led to roads not being gritted, libraries being taken over by the community and the government giving the council permission to raise council tax by 5%.

The estimated cost of setting up the new authorities is £44m but annual savings of £85m could be achieved. Existing councils will be scrapped and replaced by two unitary authorities, West and North Northamptonshire, under which will sit Northampton Town Council, England’s largest town council.

One of the scrapped councils will be Northampton Borough Council, whose £10.25m loan to Northampton Town Football Club in 2013/2014 to redevelop Sixfields stadium, is still being investigated by the police. The council has already apologised following a report by PwC in 2016 which said the loan was rushed through without sufficient checks.

So far more than £3m has been spent on an inquiry into the missing money. The council has paid out £2.3m and Northamptonshire Police has spent £974,000 investigating allegations including theft and fraud. Most of the council’s spend has gone on external lawyers and accountants.

On HS2, the Department for Transport and HS2 Ltd did not allow for all uncertainties when estimating initial costs, the National Audit Office (NAO) has said. In 2015, HS2 was due to cost £56bn but a leaked government report suggests the total could reach £106bn. At this cost the decision whether to proceed or not will be taken at Prime Ministerial level next month.

Leicestershire based Norton Motorcycles has gone into administration. The iconic British motorcycle brand was struggling to pay a tax bill and faced a winding-up order; 100 jobs at its Castle Donington factory are at risk.