Family incomes are on the rise in most of the region, official figures show – but at a slower pace than in most of the country.
Household disposable income per head crept up by just 0.8 per cent in the North-East between 2012 and 2013, below the one per cent rise across the United Kingdom.
And the North-East was left in the slow lane by both Scotland (up two per cent) and the West Midlands (up 2.3 per cent) as the economy bounced back, as well as by Yorkshire (up 1.4 per cent).
But households in London and the South-East (both up 0.6 per cent) saw incomes grow more slowly – even though overall growth was far higher than in the North-East in both areas.
The statistics also reveal striking local variations in the changes in gross disposable household income (GDHI), the amount available for spending or saving after taxes and benefits.
Incomes grew sharply in Darlington (3.5 per cent) and South Teesside (2.6 per cent) and were also up in North Yorkshire (two per cent) and Hartlepool and Stockton-on-Tees (1.9 per cent).
But growth was more sluggish in County Durham (1.3 per cent) – and fell markedly in both Sunderland (3.1 per cent) and York (3.3 per cent).
In Westminster, the average GDHI was £42,221 in 2013 – almost three times the figure of £14,659 in County Durham and the highest of 173 local areas analysed.
And incomes in Kensington and Chelsea/Hammersmith and Fulham (£42,116), Camden and City of London (£37,324) and Wandsworth (£35,237) were not far behind.
Matt Whittaker, chief economist at the Resolution Foundation think-tank, said:
“Regional inequalities have fallen since the crash, but the gap between the South East and the UK is stark.”
Experts believe disposal income – the amount people have to spend after the bills have been paid – is the best measure of the economic confidence of families and individuals.
Children in care will be the next victims of savage cuts to local council funding, North-East leaders warned yesterday.
They raised the alarm over a planned 17 per cent reduction in grants for children’s services buried in the 2015/16 funding settlement – even bigger than the overall cuts.
And they warned it would punish the North-East hardest, as the region has the joint highest number of children in care, after a sharp rise over the last five years.
For every 10,000 youngsters in the region, 81 are in local authority accommodation or the subject of care orders – up from 61 per 1,000 as recently as 2009.
It puts the North-East on a par with the North-West, while the figures are much lower in Yorkshire (65), London (54), the South-East (48) and elsewhere.
In Durham (91 per 1,000) and Newcastle (101 per 1,000) the figures are even higher, according to the Association of North-East Councils (ANEC).
Speaking at Westminster, Simon Henig, Durham’s Labour leader and ANEC’s chairman, said:
“We have seen a big increase in pressures in this area – and the amount of Government funding has been cut significantly – but local authorities have filled the gap, by raiding money from elsewhere.
The warning came as ANEC – in partnership with major urban authorities – launched a fresh blast at the “unfair” 2015-16 funding settlement.
They ridiculed the Government’s claim of an average 1.8 per cent cut in funding, arguing the true figure was close to ten per cent in the North-East – a total grant reduction of around £240m.
“This level of reduction has dramatic and damaging consequences for councils’ ability to fund statutory services such as children’s and adult social care.”
And Kevan Jones, the North Durham Labour MP, said:
“This Government has directed cash to areas not in the dire need that we are in the North-East.”
However, there were signs of future tensions with Labour, which will not halt next year’s cuts if it wins May’s general election and has made only vague promises of a “fairer formula”.
ANEC warned such a scheme “potentially allocates extra resources to wealthy and business-rich parts of the London and South-East”.
Source – Northern Echo, 14 Jan 2015
Emergency cash for the troubled NHS has been diverted away from the region to areas mainly in the South, a new analysis shows.
Health chiefs in the North-East and North Yorkshire have been handed tiny increases in their budgets from the £2bn fund – most receiving just 0.24 per cent more.
In stark contrast, other areas – mainly in London and the South-East – have been given funding boosts of more than 3.5 per cent, for the 2015-16 financial year.
NHS England argues the extra cash is going to areas which are currently underfunded and which have “the greatest health needs, where the population is growing rapidly”.
But the decision has been fiercely criticised by Nick Brown, Labour MP for Newcastle East, who campaigned against a previous attempt to shift health cash from North to South.
Mr Brown said:
“This is highly political. Extra money is being found for Tory-voting parts of the country at the expense of the rest of us. The allocation formulas have been twisted to bring this outcome about.
“Those who die too young are the losers. The big winners are the geographic areas where people enjoy a long-lived, healthy and comfortable retirement.”
Tom Blenkinsop, the Middlesbrough South and East Cleveland MP, said:
“This is yet another clear sign that this Government is consciously and deliberately redistributing funds from our area to Tory political priorities in the south of the country.”
The issue of CCG funding has also drawn criticism from local Conservative MPs, including Vale of York’s Julian Sturdy who told ministers of a “postcode lottery” in a debate last week, saying: “Why does Vale of York CCG, in particular, receive such a poor allocation?
There are 53 CCGs receiving rises of between three and four per cent – covering areas where no fewer than 85 per cent of MPs are from the two Coalition parties.
Furthermore, some – unnamed – CCGs have been forced to revise their plans from April because they are now receiving less money than expected, the HSJ said.
The allocations – slipped out by NHS England late on the Friday before Christmas – divide up the £1.1bn of the £2bn which has been given to CCGs, which ‘buy’ treatments.
Announcing the £2bn injection in November, amid growing talk of an NHS “crisis”, George Osborne said it would “support the day-to-day work of our incredible nurses and doctors”.
But 11 of the 14 CCGs in this region will receive just 0.24 per cent extra, worth just £400,000 to Darlington, for example – and none will get more than 1.99 per cent.
Ten CCGs are gaining 3.7 per cent or more, including in Windsor, Ascot and Maidenhead, Bedfordshire, Bromley, in Kent, and in Slough.
The list is topped by East Staffordshire, which gets a 4.28 per cent increase – an extra £5.8m, for 2015-16.
The row has echoes of the controversy in both 2012 and 2013, when NHS England first attempted a big shift in spending from poorer areas to those with more pensioners.
It was forced to back down after protests that the “fair shares formula” would slash up to £170m of funding from CCGs in the North-East and North Yorkshire
This time, every area is receiving a rise of at least 1.7 per cent from April, but half the extra £1.1bn will go to just 54 of the 211 CCGs.
Announcing its decision, NHS England said:
“Every CCG will get real terms budget increase.
“More of the extra funding for local health services is being used to more rapidly increase NHS budgets for those parts of the country with the greatest health needs, where the population is growing rapidly, and where services are under greatest pressure.”
NHS England is independent of the Department of Health, which means its spending decisions are no longer announced to parliament, nor scrutinised by MPs.
Source – Northern Echo, 13 Jan 2015
Cheap North-East rail fares are a “myth” that should be dispelled, campaigners say as the Government proposes increasing tickets prices to pay for better services.
Train fares in the region are already comparable with other parts of the UK and putting up prices to pay for new rolling stock and more frequent services would be unfair, says rail user group Coastliners.
As part of a consultation exercise ahead of the refranchising of the Northern and TransPennine Express (TPE) services, the Government has asked users for their views on below-average fares being increased to pay for improvements.
But research by Coastliners, which represents rail passengers on the Durham coast, found that many journeys in the Tees Valley were no cheaper than those in the South-East and London.
Peter Walker, who carried out the study, said the South-East had received massive investment in schemes such as Thameslink and Crossrail – and North-East passengers deserved similar levels of funding without seeing substantial price rises.
“We often pay as much for our trains as do those in the Home Counties. It is time to end the double standards of funding so often seen in the years gone by.”
The findings were supported by Martin Abrams, from the Campaign for Better Transport.
“There are many myths about rail in the North of England which desperately need dispelling if passengers are to get a fair deal.
“The idea that northern passengers are getting better value for money than passengers in the south is one of these.
“Not only are standard fares very similar across the regions, but investment per head in the south is around twice that per head in the north.”
In response, the Department for Transport said the consultation on the Northern and TPE franchises asked for views on how services could be improved and how this could be balanced with fares.
“We are very aware of passengers’ concerns over rail fares, and that is why the Chancellor announced a second year’s freeze in real terms on regulated fares, as well as abolishing train operating companies’ ability to flex prices on unregulated fares.”
The RMT has announced that it will hold an event in the House of Commons to lobby MPs on the Northern and TPE franchises.
The transport union said members and supporters from across the country would attend the event on November 4.
Source – Northern Echo , 18 Oct 2014
The full challenge facing George Osborne’s plan to create a “Northern Powerhouse” is today highlighted by a former global banker who points to years of transport failures in the region.
Jim O’Neill, former chairman of asset management at Goldman Sachs, has published a report from his City Growth Commission in which he describes how the UK economy is being held back as officials in Whitehall keep control of local transport and infrastructure decisions.
The call to hand the North a bigger say over its own future comes weeks after the Chancellor said he wants to rebalance the economy away from the South East, with a major new high speed rail network linking up the likes of Manchester and Leeds among the projects proposed.
But without handing city leaders a say over improving outdated infrastructure, the commission says, the Chancellor faces a tough task in matching that ambition with real change.
In his report Mr O’Neill warned that meeting Mr Osborne’s ambition would require “significant change” from Government.
The report, based on hearings in Newcastle and other cities, says Metropolitan areas like Tyne and Wear must be given a bigger say over their own future. The commission found that the UK loses billions of pounds every year as a result of poor, overly-centralised decision-making that fails to encourage greater links between cities.
Plans for a new high speed rail network must be improved so links from the North are prioritised, the commission said.
Talking of the need to strengthen Northern “metro” areas, Mr O’Neil said: “We recommend the Government considers making two bold decisions regarding its infrastructure policy. The first is to provide metros with a strong, powerful voice that can influence and guide decision making at a national level.
“For too long, our cities have not had a seat at the table, and this has been to the detriment of Northern metros in particular, as well as the economic growth of the UK economy as a whole.
“The second is to place connectivity between metros at the heart of any infrastructure investment, in particular via multiple transport links between cities and better broadband technology.
“Whilst the UK is starting to move in the right direction – with the creation of Infrastructure UK and the Chancellor’s recent proposal for a connected ‘Northern Powerhouse’ – there is still some way to go.”
Those transport concerns were last night backed by Gateshead MP Ian Mearns, vice-chair of the All Parliamentary Rail in the North group.
He said: “The difference in spending on transport between London and ourselves is about 520 to one, and even just changing the funding system now will not address the historic deficit we face. Time and time again we have lost out, and will continue to do so while the Government makes spending decisions based on congestion rather than on helping us grow.”
The lack of a Northern advocate in Government has again been highlighted after yesterday’s Government reshuffle.
Former regional minister Nick Brown warned: “The position of the English regions is weaker now than before the reshuffle. The surprise announcement of William Hague and the dilution of Greg Clark’s City Minister responsibilities leaves the English regions even less represented than they were before. This is a Home Counties reshuffle.”
The Government recently went some way to addressing the transport issues facing the region with its local growth fund announcement. With local contributions, the Government decision paved the way for £95m of infrastructure improvements. A “Provisional Allocation” of £78.7m was also announced for a number of further schemes due to start in 2016.
Ministers have also recently signed off on a new North East super council, the Combined Authority, which they say will be used to devolve new powers down to city regions.
Source – Newcastle Journal, 16 July 2014
Fewer pupils in the region are attending fee-paying schools, new figures show.
There are 69,847 pupils at private schools in the North belonging to the Independent Schools Council (ISC), compared with 70,577 pupils in 2013.
Across the country, 7% of schoolchildren are at independent schools. The underlying trend over the last year has been growth, but pupil numbers declined in the region, falling by 1% in the North.
Almost half of the country’s independent schools are located in London and the South East. According to the census, independent schools in different parts of the country have faced different sets of challenges.
Among those schools that participated in the census in both 2013 and 2014 there was a rise in pupils of 1% in London and of 0.5% in the rest of the South East.
Hilary French, headmistress at Newcastle High School for Girls, says the fall in pupil numbers has to be linked to the region’s struggling economy.
“People are doing really well in the South East but we are not feeling those effects yet,” she said. “The Government is trying to save money in public services, which is detrimental, because these services form a really large part of our economy.
“We have to be aware that some parents are struggling – the North East is the only part of the country that hasn’t seen a rise in house prices. We have to hope that the London ripple effect is all to come for us.
“But with the severity of the recession and what’s been happening to the economy here, a 1% fall is quite encouraging. All independent schools are businesses and any business has to look at its situation in the economy – how it needs to attract and retain customers. There are lots of excellent independent schools in the North East. Both Royal Grammar School and ourselves have waiting lists for pupils. Those schools which can move with the times and provide what the market wants are doing very well.”
School fees climbed by 3.9% last year, the lowest rise for almost 20 years. The overall average annual fee, excluding nursery fees, is almost £15,000.
The census said 166,268 pupils nationally – 33.4% of the total – received help with their fees. ISC schools provided more than £660m of help with fees in the academic year 2013/14, an increase of 5.1% on last year.
Schools gave more than twice as much help in the form of bursaries as they did in scholarships. The survey said means-tested bursaries were worth an average of £7,894 per pupil a year and were held by approximately 8% of all ISC pupils.
Pupils from overseas helped to buttress numbers during the recession, and last year their numbers rose 1.4% to a total of 25,912. The two regions supplying the largest number of overseas pupils are Europe (38%) and Hong Kong and China (37.2%).
Ms French added: “We are finding that overseas pupils, particularly from China, want to come to us as a day school and stay with either relatives or host families.”
Source – Newcastle Journal 30 April 2014
The Arts Council has distributed more lottery funding to just five London institutions than the entire North East, a funding report today reveals.
Academics behind a new look at how lottery cash is spent on arts say that despite more households in the North of England playing the lottery than in London, regions outside the capital and the South East see nowhere near the same level of investment.
The report comes from the same team who last year revealed how London was soaking up Government arts cash.
Their latest study calls for a new model in how lottery cash is handed out.
In the North East, where some 56% of households play the lottery, the region has received £221m in lottery cash since 1995.
In London, where 32% of households play the lottery every week, some five groups alone – the Royal Opera House, the Royal National Theatre, English National Opera, Sadler’s Wells and the South Bank Centre – have received £315m.
Overall London has contributed £386m to Arts Council lottery cash, but has received back £1.1bn.
The report’s author’s last night said there was “no evidence supporting the claim that ‘lottery funding has traditionally been used to fund projects in areas of the country that lack established arts and culture infrastructure’. The evidence seems to point substantially in the opposite direction.”
The local authority area with the poorest return is County Durham, where lottery players have contributed £34m since 1995 while arts organisations there have received just £12m.
Former director of Northern Arts Peter Stark helped write the PLACE report.
Mr Stark, a chief adviser to Gateshead during its regeneration plans around the Baltic and the Sage, said that while it was clear that Tyneside had benefited from lottery cash, overall there was a need for a fairer funding model.
He said: “There is something fundamentally wrong in the use of lottery funding to prioritise existing organisation, in particular the largest ones when the point of the lottery was that it helps a much wider spread.”
He said that all areas could benefit if, as money taken away for the Olympics returns, there is a new funding model that reflects deprivation, availability of art and distance from London.
“London should have a larger share, but not to this extent,” Mr Stark said. “The Arts Council likes to say that if its fund was increased it could solve this problem, but it can’t just continue with this funding model.
“We are getting to a point where the money being redirected to organisations already receiving pretty substantial funds from the tax payer must lead to a pretty serious look at how we deal with lottery funding and the way in which we fund the arts in this country.”
Last night Bishop Auckland MP Helen Goodman said there was overwhelming evidence that the region’s were getting a bad deal. The shadow culture minister said: “The Rebalancing Our Cultural Capital report revealed the deeply unfair distribution of funding between London and the regions.
“This second report confirms that many citizens, particularly in the North East, aren’t getting access to what they have already paid for through taxation and Lottery tickets.
“Culture and the arts are a vital source of wellbeing and Labour is committed to achieving fair access for all, regardless of where people live or how wealthy they are.”
Source – Newcastle Journal 25 April 2014
Regional economic policy must be revamped if the North East is to get a fair deal in the wake of the Scottish independence vote, a national research director has said.
Dr Angus Armstrong, director of macroeconomic research at the National Institute of Economic and Social Research, said the Treasury does not prioritise the North East and politicians must form a strong and unified voice to correct the imbalance.
At a debate on how September’s vote will impact on the region, regional leaders also heard of a “growing realisation” Scotland may not lower corporation tax, allaying fears the country would suck business from its neighbours.
It comes as all seven North East councils, from Durham to Northumberland, agree a Combined Authority which will allow it to bid for more Government funding.
Dr Armstrong said regional policy is not a priority for the Treasury when it calculates how to spend Government cash and the North should look to reconsider a regional assembly to be heard above its southern counterparts and in Europe.
He said: “I used to work for the Treasury during the crisis and regional policy does not register. I hate that that is the case, but I really don’t think it is part of Treasury policy. I think the whole concept of regional policy needs to be re-thought.”
He added: “People in the South East underestimate the extent to which power is centralised, so, although they have a feeling there is something of an imbalance, that imbalance is greater than that feeling would suggest.
“The reason I say that is because of the financial crisis. The only reason they could support the City of London is because of the taxpayers of the rest of England.
“When it goes wrong we pay, it is quite remarkable and I find it amazing that places outside of the South East don’t have more to say about that. I do think the degree of imbalance is extremely significant.”
Pat Ritchie, chief executive of Newcastle City Council, said the region’s airports and universities could lose out due to a possible relaxation in border controls which might see students flock to Scottish universities.
She added there were fears changes to the Air Passenger Duty tax could see carriers opt to begin routes from Scottish airports.
Ms Ritchie, however, said there was an opportunity for the region to export goods to the country and, with Edinburgh closer to the region than London, collaborate with Scottish national leaders.
She said: “We should and can be confident in our strengths. This is a region which exports more than any other region and it is already used to working with different markets.
“Whilst not wanting to marginalise what is an important debate, we should not get too hung up on what Scotland might or might not do.
“We need to really develop the strongest possible economic offer that we can for the North East and collaborate as local authorities and businesses and be confident.”
Professor David Bell, professor of economics at the University of Stirling, also spoke at the debate, organised by the Institute for Public Policy Research (IPPR), and said Scots are keenly aware of the need to collaborate with the North.
“I don’t think that the North East is particularly disadvantaged because for Scotland to get anywhere with these negotiations there would have to be a cluster of compromises, and it would make no sense to have poor relations with its near neighbours.”
He added the North East faced being drowned out by the South East but there was a “growing realisation” that Scotland could not drive down corporation tax as it risked becoming a tax haven for businesses.
He said: “I go to talk about independence on a regional basis and the elephant in the room is the lack of political impetus, particularly in the North East.
“It is just not there and it isn’t part of the issue.
“If Scotland votes yes or if it votes no and gets more powers, you will have a heavily asymmetrical system in England which cannot continue to be stable.”
Source – Newcastle Journal, 28 March 2014
Arts organisations have hit out at the London bias which is starving cultural bodies outside the South East of funds – and demanded a better deal for the North East.
Theatres, local authorities and actors’ union Equity told MPs that the concentration of resources in London and the south had to stop, not only because it was unfair but because it damaged the economy.
They issued the demand in submissions to a Commons inquiry looking at the work of the Arts Council.
It follows the publication last year of a hard-hitting report backed by senior arts figures including Melvyn Bragg and producer David Puttnam which warned that London receives £563.9m a year in culture funding from the Government and the Arts Council while the rest of the country gets £205.1m.
Latest Arts Council figures showed that arts organisations in the North East received £5.59 per head a year, compared to £21.33 per head in London.
And the study also found that the North East had received £86.22 per head in arts lottery funding since 1995, while Londoners received £165.
The report’s authors included Peter Stark, professor of cultural policy and management at Northumbria University.
Speaking at Westminster, he told the Commons Culture, Media and Sport Committee: “We have an enormous potential out there and the resources are in the wrong place.”
He added: “There is just something wrong that Westminster is benefiting to the tune that it is while County Durham is benefiting to the extent that it is, and something must be done about it.”
In a written submission to the inquiry, the North East Cultural Partnership, a body backed by 12 local councils and North East Chamber of Commerce, warned that unfair funding “has led to networks of artists and organisations in some parts of England, which, for all their strengths, are smaller and less powerful than we need”.
Funding bodies such as the Arts Council should look for ways to make funding decisions locally instead of in London, it said.
The Touring Partnership Ltd, which represents nine theatres across the country including the Theatre Royal in Newcastle, said: “The gulf between the current per capita investment of the nation’s funds for culture in London … compared to the rest of England … is unacceptable by anybody’s reckoning.
“Even when the funding to those key national institutions is removed from the analysis, the inequity remains extreme and, in the interests of basic democratic fairness, should be redressed.”
Actors’ union Equity highlighted the economic importance of the arts, telling MPs: “An independent Economic Impact Assessment of ten of the North East’s leading cultural organisations showed that £4.06 of GVA is generated within the region for every pound of subsidy received.”
However, it said it would have concerns about simply cutting funding for the south to shift the money north.
But the Association of British Orchestras, which represents Royal Northern Sinfonia at Sage Gateshead among others, warned: “We would respectfully point out that criticisms of the perceived imbalance between Arts Council funding in London and the regions is a distraction from the more critical issue of maintaining local authority investment in arts organisations when this funding is so under threat.”
The inquiry continues and MPs will present their findings later in the year.
Source – Newcastle Journal, 26 March 2014
he Chancellor has been told his Budget today must address the North East’s unemployment record.
Businesses, house builders and unions have said the Government needs to start growing all parts of the UK economy, not just the South, and urged George Osborne to use his Budget to tackle the number of people out of work in the region.
At 10%, the region’s unemployment rate stands as the highest in the UK, remaining around that level even as unemployment falls in large parts of the rest of the country.
The North East Chamber of Commerce has already written to the Treasury calling for a renewed focus on tackling job creation in all parts of the UK.
Policy director Ross Smith said: “We have seen the recovery really accelerate over the past year. We now need to see measures that will sustain this for the longer term and make it better balanced – not a series of pre-election gimmicks.
“North East businesses are making a huge contribution to that recovery, but doing so within an economic system that is still skewed towards the South East. We need to see measures that will capitalise on the region’s export success, energy expertise and capacity for growth.
“That includes taking better account of the regional implications of taxes such as fuel duty and air passenger duty, better balanced delivery of infrastructure, and greater scope to ensure skills training matches the labour market needs in this region.”
The need for a regional focus was repeated by Beth Farhat, regional secretary of the Northern TUC.
She said: “Most people in the North East aren’t experiencing a real recovery and in fact for many here it’s getting worse, with unemployment for women rising 20% in the last year alone.
“We need a Budget focused on creating more North East jobs, with better quality work alongside with fairer pay. Ministers should end their ideologically obsession with cuts and privatisations to public services and focus much more on a thought-out approach to developing the economy, particularly in regions like ours.
“When eight out of 10 private sector jobs are being created in London it’s clear the current plan isn’t working and the economy is still geared towards London and the South East at the expense of everywhere else.
“There is a consensus across the region about what we need to do, so I’d urge the Chancellor to hand us the economic tools, powers and investment needed to enable us to contribute to regional success and balanced national growth.”
Newcastle Council leader Nick Forbes said house building was a key way of kickstarting the North East. He said: “What we need is a tax break to incentivise house building on brownfield development sites – this would help deal with the chronic shortage of housing and make it financially viable for construction companies to take on more apprenticeships.
> Would it ? Or are we just talking about more housing that the majority of us couldn’t afford even if we are working ?
“The Government has announced their intention on building a New Town at Ebbsfleet, but a tax break like this would help us rebuild areas like Scotswood and Walker Old Towns.”
And the North East-based Home Group has also had its say, calling on the Government to force through better use of public land, making it easier for firms to build.
The affordable housing group called for the creation of special Housing Zones in which, like the business-led enterprise zones, incentives would be offered to kick start the building process.
Source – Newcastle Journal, 19 March 2014