The State of Britain

Walsall and Worcester see deprivation increase, the Peaky Blinders effect in the West Midlands and the region sees the biggest fall in unemployment in the UK

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The Ministry of Housing, Communities and Local Government (‘the Ministry’) 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. Jaywick is followed by nine areas of the North West as the most deprived in England, the Druids Heath area of Birmingham is the first WM entry and is ranked 45th. The Ministry divides England up into 32,844 neighbourhoods averaging about 1,500 residents or 650 households each.

In terms of local authorities, 41% of Birmingham was classified as deprived which ranked the city seventh worst in the UK, Stoke was 12th. In terms of performance since 2015, two areas of the WM have seen deprivation accelerate the fastest in the UK. Walsall was ranked third and saw deprivation increase by c6%, with Worcester ninth at c5%. In comparison, Wolverhampton and Sandwell are no longer on the list of the 32 most deprived authorities.

Walsall and Worcester are two of the 16 WM towns invited to apply for regeneration funding of up to £25m 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 Midlands were also awarded £21.1m as part of a £95m pot to revive historic high streets, with Stoke, Oswestry and Wednesbury some of the half dozen or so WM towns that will benefit.

The West Midlands Combined Authority (‘WMCA’) will invest £18m in the UK’s centre for battery development in Coventry. This adds to government funding of £108m. The facility is due to open in March 2020 and will initially employ c100 people. In another intervention, WMCA (via Telford and Wrekin Council) will outlay £3.7m to redevelop 14 hectares of brownfield sites – enough for 540 homes.

During a tour in Derby, Midlands Minister Robert Jenrick, announced the government’s commitment to further devolution deals across the region. He also undertook to deliver a new Midlands Engine Strategy this autumn which will be written in partnership with the region.

Construction work continues while the HS2 review is ongoing but if HS2 does goes ahead, the first phase between London and Birmingham will be delayed by up to five years, Transport Secretary, Grant Shapps, has confirmed. That section of the line was due to open at the end of 2026, but it could now be between 2028 and 2031 before the first trains run on the route. HS2’s total cost has risen from £62bn to between £81bn and £88bn.

The West Coast rail franchise changes hands at the end of the year and a report due to go to the WMCA has set out the planned improvements. First Group and Italian state operator Trenitalia will run the franchise between 2019 and 2031 and will refurbish first class lounges at Birmingham New Street; offer free wi-fi at six more stations; provide more direct services to London from Wallsall and Shrewsbury; and install more car parking at Birmingham International.

Also on the trains, plans have been submitted to build two new railway stations, Kings Heath and Hazelwell, on the Camp Hill line south of Birmingham. The line’s stations closed during 1941 and since then the track has only been used for freight and infrequent through-services. A third station at Moseley is also planned.

The WMCA’s economic development offshoot the West Midlands Growth Company (WMGC), has suggested screen tourism, fuelled by the success of Peaky Blinders, has contributed to the 2.6% increase in visitors to the region. The West Midlands had a record 131.4m visitors last year, of which overseas tourists contributed £16.7m to the economy. The gold standard in screen tourism, however, has been set by Game of Thrones. The show is estimated to have brought £251m into Northern Ireland since production began in 2010. Figures from Tourism NI suggest that 350,000 fans visit Northern Ireland every year as a result and spend £50m.

The Stats
For the first time, the ONS has published quarterly GDP estimates for the West Midlands, the eight other 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 WM economy grew by 3.2%. This ranked the WM second 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 declined by 1.1%. UK growth over the same period was 1.5%.

The quarter to Dec 2018 showed administration/support services grew by 8.7% and made the biggest positive contribution to growth but manufacturing fell by 1.5%, information and communication fell by 5.0%, and the human health and social work industries fell by 3.0%. Overall, the construction sector contributed positively to GDP growth, the services sector was flat and the production sector contracted. More recent estimates (six months later) for the year ended June 2019, published by ESCoE last month, ranked the WM eleventh with growth of 1.1%, which suggests the March ‘Brexit’ slowdown has hit the region harder relative to other parts of the UK.

More data from the ONS showed unemployment in the WM decreased by 23,000 to 122,000 between May and July, the fall of 0.8% was the best in the UK and took the overall rate to 4.2%. The South West had the lowest rate at 2.4% with the UK rate at 3.8%. The highest rate was 5.0% which was recorded in the North East. The South West also had the highest employment rate at 80.8% which compared with 74.6% in the NW. UK employment was estimated at 76.1%.

WM average property prices increased by 1.2% to £199,802, which took annual growth to 1.8%. In comparison, UK prices grew by 0.5% to £232,710 during July, an annual growth rate of 0.7%.