The State of Britain

Unemployment in the EM ticks up, continued worries about the region’s suboptimal local government and two key sectors remembered

Reading Time: 4 minutes

Unemployment in the East Midlands increased by 4,000 to 114,000 between November and January; the increase of 0.2% to 4.7% signalled a below average performance in UK terms. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside had the lowest and highest unemployment rate in the country respectively. The UK unemployment rate stands at 3.9%.

In March average earnings in the East Midlands increased to £564 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

More positively, East Midlands average property prices increased by 0.2% to £192,757 during the month which added to the annual growth rate of 4.4% – the highest in England. In comparison UK prices dropped by 0.8% during March which cut the annual growth rate to 1.7%. The East Midlands market was also slower with the latest figures to September 2018 showing volumes down by 2.1%.

The disruption caused by Storm Gareth to road and rail travel compounded by other problems such as repairs to potholes causing hours of traffic delays on the M1 in Leicestershire will affect the economic performance of the Region. Adding this to some disappointing announcements from some key regional employers made for a largely forgettable month for the region.

The Leicester factory – which employs 200 people – that makes Fox’s Glacier mints could close if Fox’s owner Big Bear Confectionery merges with Tangerine Confectionery, operations would move to Pontefract and Blackpool. Big Bear’s other brands include Poppets, XXX mints and Just Brazils. Boots – the largest private sector employer in Nottinghamshire with about 5,800 people at the Beeston site – has announced plans to reorganise its head office; up to 350 jobs are at risk. About 800 employees are now entering a 45-day consultation as the company seeks to reduce costs at the site by 20%. Lidl’s regional distribution centre in Lutterworth is due to close on 31 July 2020, putting another 350 jobs at risk. Staff can transfer to Lidl’s new regional distribution centre but it will mean travelling 50 miles to Peterborough. The company will also offer alternative employment opportunities in Lidl stores or a redundancy package. Also sofa retailer Harveys has said it plans to move its Lutterworth customer services department to Accrington putting 68 jobs are at risk. The firm has decided to consolidate its Harveys and Bensons customer services. Finally Notts County owner Alan Hardy’s design company Paragon Interiors Group has gone into administration.

One of the few bright spots was Toyota’s plans to start manufacturing hybrid cars for Suzuki at one of its UK factories; the plant in Burnaston, Derbyshire, is part of a global deal to share resources. The manufacture of the new model will start at the end of 2020 and will not lead to extra jobs or investment but will strengthen the long term viability of the plant which benefited from a £240m upgrade two years ago.

A bid for funding from the Housing Infrastructure Fund for key regional infrastructure projects will be made this month. Led by Nottinghamshire County Council in partnership with 6 other local authorities the funds are sought for an East Midlands Network of Garden Villages which form part of the overall East Midlands HS2 Growth Strategy. Part of the £76m bid will focus on improving infrastructure in the area around the East Midlands HS2 Hub Growth Zone at Toton and the adjacent Chetwynd Barracks with the remaining £50m split between the future Infinity Garden Village and Chesterfield Town Centre; delivering 9,000 new homes across the two sites. Other regional developments include the approval of a 215,000 sqm warehouse near Isham in Northamptonshire and news that Nottinghamshire County Council has completed its £5m purchase of a company that repairs the county’s roads; Via East Midlands Ltd was previously half owned by Cornwall Council.

On East Midlands transport there was positive news that the electrification of the Midland Mainline up to Market Harborough is now being planned.
Electrification was due to stop at Kettering but the Department for Transport has confirmed that electrification plans will include Market Harborough as part of the £1.5bn Midland Mainline programme. Diesel-only trains currently running on the Midland Mainline are to be replaced with bi-mode trains which can run under electric power where lines are electrified, reverting to diesel where lines are not.

Issues with the region’s suboptimal local government continue with fears that Brexit has rendered HMG too busy to approve plans to form the new West Northamptonshire unitary authority. South Northamptonshire, Northampton Borough, Daventry and Northamptonshire County Councils submitted the merger plans last summer but no decision appears imminent. A second unitary authority – North Northamptonshire – will oversee Corby, East Northamptonshire, Kettering and Wellingborough. Initial estimates were that the two new councils would cost £30m to establish but now it appears a further £14m is needed; revised estimates include £7.9m on redundancies – almost £3m more than estimates in the original PwC report – £1.7m on relocation costs and £5.3m on consultancy. The mergers follow recommendations by a government inspector after a financial crisis at the county council.

Finally two key regional sectors, one past and one present, were remembered this month. Forty years ago Europe’s largest steelworks closed when British Steel said the Corby works – which employed half the town – was no longer viable. Thousands – many from Scotland – were laid off; part of the steel industry still remains but on a vastly smaller scale. Northamptonshire is still the shoemaking capital of the world hailed the British Footwear Association – based in Northamptonshire – which has now represented the industry for 120 years. Northamptonshire has a long history of boot and shoemaking dating back to Victorian times but most mass production moved abroad from the mid-20th Century due to lower costs. Since then the remaining firms which moved up market have benefited from selling luxury handmade shoes globally.