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It’s not so grim up north after all, national statistics suggest

It’s not so grim up north after all, national statistics suggest

🕔06.Aug 2015

Families in the ‘Northern Powerhouse’ cities of Liverpool, Manchester, Newcastle, Leeds and Sheffield enjoy disposable incomes up to 10 per cent greater than households in Birmingham and the West Midlands, the latest Government figures show.

After paying bills and buying food, people in the West Midlands have an average £13,834 a year to save or spend. The England average is £17,842 while the figure for London is £22,516.

Average household disposable income in Liverpool is £15,140. In the north-east it is £14,940, in West Yorkshire it is £14,822, in Nottingham it is £14,707, in Greater Manchester it is £14,515 and in Sheffield it is £14,345.

A detailed report by the Office for National Statistics suggests the West Midlands economy is continuing to lag behind the city regions of the north in terms of jobs and wealth creation.

A special ONS study looked at the existing combined authority boundaries for West Yorkshire, Liverpool, Manchester, North East, and Sheffield as well as the boundaries for the proposed West Midlands combined authority, Nottingham, Nottinghamshire and Bristol.

The research reinforces the existence of a north-south economic divide, which the Government says it is determined to narrow through devolving powers and budgets to city regions.

The report shows that while the north-west and north-east regional economies are out-performing the West Midlands, the north of England and the Midlands together share productivity rates and household income significantly below the national average.

And on almost every conceivable economic measure, Bristol outstrips the midlands and the north.

Average Gross Disposable Household Income (GDHI) per head in the city regions in the north and the Midlands in 2013 was 15-22 per cent lower than the England average of £17,842.

Growth in GVA, the Government’s preferred measure of economic value, was 4.1 per cent in Greater Manchester in 2013, adding £19,905 to the UK economy for each resident. The West Midlands saw an increase of 2.8 per cent, although the metropolitan councils of Birmingham, Coventry, Solihull, Sandwell, Walsall, Dudley and Wolverhampton outperformed the rest of the region with a four per cent GVA increase.

Average productivity across the north of England and Midlands was 13 per cent below the England average. Productivity levels in Bristol were higher than in the other city regions, and were the same level as the England average.

This means that an average West Midlands worker generates £8.96 an hour against the average for England of £10 an hour.

The report notes:

The differences in the data between the seven Midlands and northern city regions are generally quite small. However, they all lag behind the England average across each of the key economic indicators.

The West Midlands has an employment rate of 64.9 per cent. This is below the England average of 72.9 per cent.

A lack of workplace skills and qualifications in the West Midlands is highlighted as a problem.

Bristol and Greater Manchester lead the way with 41 and 32 per cent of people aged 16-64 having degree level qualifications. In the West Midlands the figure is 27 per cent. The average for England is 36 per cent.

Fifteen percent of 16-64 year olds in the West Midlands have no qualifications against an average for England of nine per cent.

The figures are stark but hardly a surprise. They reflect at least two decades in which the West Midlands economy has been out-performed by most other English regions.

Government Ministers have begun referring to the proposed West Midlands combined authority as an ‘Engine for Growth’, but the ONS report suggests there is much to be done if the title is to live up to its promise.

West Midlands council leaders will submit a formal combined authority proposal to George Osborne by September 4. They will ask the chancellor to outline two separate devolution packages – one if the region does not have an elected metro mayor, and one with a mayor.

Pic: Spinningfields, Manchester, Foster and Partners

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