The State of Britain

Yorkshire & The Humber property prices show the strongest growth in the UK, British Steel worries in Scunthorpe and the Sheffield City Region spins into existence

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Growth in Yorkshire & The Humber increased by a modest 0.2% to 1.4% in the year to March 2019 according to estimates from ESCoE. At 2.7% and 0.7% London and Northern Ireland had the highest and lowest growth rates in the country respectively. The East of England was the most improved region of the UK with growth accelerating from 0.9% to 1.9%. The UK growth rate for the same period was 1.5%.

Unemployment in Yorkshire & The Humber fell sharply by 12,000 to 130,000 between January and March, a drop of 0.5% to 4.7%. At 2.4% and 5.4% the SW of England and the North East had the lowest and highest unemployment rates in the country. The national unemployment rate stands at 3.8%.

In March, average earnings in Yorkshire & The Humber increased to £564 per week. London had the highest average earnings of £762 whereas the Northern Ireland had the lowest of £513. In the UK, average earnings grew by 3.3% or by 1.5% after inflation.

Yorkshire & The Humber’s average property prices increased by 1.8% to £162,129 during the month which meant annually prices were up by 3.6%, the strongest growth in the country. In comparison, UK prices dropped by 0.2% to £226,798 during March which cut the annual growth rate to 1.4% although transactions were up by 1.4%.

In its estimate of regional public spending and regional tax revenues in 2018, the ONS has concluded that Yorkshire & The Humber had a deficit of £11.8bn. This compares with London which had the highest surplus of £34.3bn. On a per person basis Y&H’s deficit was £2,164 whereas London had the highest surplus of £3,905 per person and Northern Ireland had the biggest deficit per person at £4,939. The only areas of the UK to run surpluses were London, the south-east of England and the east of England. At a national level, the UK had a deficit of £636 per person which splits into deficits of £106, £2,452, £4,395 and £4,939 for England, Scotland, Wales and Northern Ireland.

British Steel has been placed into liquidation, putting 5,000 direct jobs and many indirect jobs in the supply chain at risk. Of these there are 3,000 direct jobs at Scunthorpe – from which Network Rail sources 95% of its rails – with an estimated 20,000 indirect jobs linked to the site. The company was transferred to the Official Receiver as the firm did not have sufficient funds to pay for an administration. The Official Receiver has said good progress is being made towards finding a buyer for the company with eighty firms having expressed an interest of which sixty have been sent non-disclosure agreements. The Government provided British Steel with a £120m bridging loan in April to meet EU emission rules but a further non commercial loan is unlawful under EU state aid rules. Greybull Capital, a private equity firm, bought Tata Steel’s ailing long products business in 2016 and (in 2017/2018) returned the now rebranded British Steel to profit until a recent market slump reduced cash flow.

In Yorkshire, the Filmore and Union cafe chain has collapsed with 80 job losses. The firm – which had 17 cafes in Yorkshire – employed c230 people. Administrators have arranged a partial sale of the production kitchen and 10 stores safeguarding 150 jobs.

Bradford College has started a consultation over the potential loss of 131 jobs after it successfully restructured its debt with help from the Education & Skills
Funding Agency’s Restructuring Facility. In Scarborough, coachbuilder Plaxton says there will be no redundancies following a takeover of its parent company Alexander Dennis by Canadian NFI Group for £320m.

The Government has approved a Sheffield City Region Combined Authority deal which will run until at least 2022. Former chancellor George Osborne signed a non-binding agreement with local politicians in October 2015, providing for an elected mayor who would have power over transport, strategic planning and skills plus £900m over 30 years. In September 2017, the leaders of Barnsley and Doncaster council voted down the offer, instead backing a One Yorkshire deal. Barnsley Central MP Dan Jarvis was elected Mayor of the Sheffield City Region in May 2018. Now, the four leaders of Sheffield, Rotherham, Barnsley and Doncaster councils have accepted the latest proposal but any council wishing to leave the Sheffield City Region after 2022 and join a wider Yorkshire deal may do so. Critics of the deal were emboldened by news that a new interim head of communications or spin doctor at the authority will earn £700 per day, almost double the weekly average wage in Doncaster. The head of communications will report directly to Dan Jarvis. Analysis by the BBC and the Chartered Institute of Public Finance and Accountancy (Cipfa) has suggested Rotherham Council is one of 11 councils in England which risks running out of cash reserves within 4 years if recent spending levels continue.

Some significant regional infrastructure projects this month. The five mile £120m Lincoln Eastern Bypass will mean a series of road closures in Lincoln over the next 12 weeks. Further south, the northern and southern sections of the proposed £100m Spalding Western Relief Road were not objected to by South Holland District councillors. Also, over £8m will be spent widening and improving the A630 West Moor Link road in Doncaster; funded by c£5m from the Sheffield City Region and £3.3m from Transport for the North, England’s first sub-national transport body. The project will start in July and finish in March 2020. Two major Environment Agency projects got underway in the region. The first, a £42m scheme to improve flood defences along the banks of the Humber in Hull after properties were flooded in the city in 2013. Secondly, a £7m project to protect homes and businesses on the Lincolnshire coast by pumping 400,000 cubic metres of sand onto several of the county’s beaches.