08 July 2021

Our Strategic Economic Plan, Gatwick 360°, found that in 2016 the Coast to Capital Local Enterprise Partnership (LEP) economy was worth £50.7 billion, making it the 7th largest economy of 38 LEP areas in England. The Office for National Statistics (ONS) recently released updated Gross Value Added (GVA) figures for years up to and including 2019. A significant release as it is the first set of national GVA figures to take account of LEP boundary changes in 2018  providing a pre-COVID-19 baseline of our economy. For Coast to Capital, this meant that the local authorities of Croydon and Lewes were no longer part of our formal economic area.


Coast to Capital economy becomes smaller without the economies of Croydon and Lewes


The latest ONS release shows that the Coast to Capital economy was worth £46.6 billion in 2019, an 8% decline compared with the 2016 figure, moving us down two places to 9th out of 38 LEPs. This is a significant lowering of our position and precedes any impact of our withdrawal from the EU and the pandemic. If Croydon and Lewes were included, our economy would have been worth £58.3 billion, a 15% increase from 2016 figures.


Boundary changes impacted the positioning of several LEPs


National GVA trends between 2016 and 2018 show the top ten performing LEPs maintained the same positions. However, by 2019, following the boundary changes, all but the top two LEPs change position (figure 1 below). London and South East LEPs remained at 1st and 2nd place respectively, whereas four saw their positions fall and five moved up in the rankings. Coast to Capital and Leeds City Region experienced the biggest decline, moving down two places, where Greater Birmingham and Solihull was the only LEP to move up two places to 6th displacing South East Midlands from that place. Where in 2016 Greater Birmingham and Solihull LEP was ranked below Coast to Capital in 8th place, they are now three places ahead, suggesting boundary changes impacted the positioning of several LEPs.




Productivity growth in Coast to Capital remains slow and below the national average


Productivity per head of the population in 2019 (figure 2 below) shows a similar trend of lower than average performance. GVA per head for Coast to Capital was £29,896, the 11th most productive LEP on this measure, but performing below both the south east and national averages. Our position lowers even further when looking at year on year growth. GVA per head only grew by 2.3%, compared to a national average of 2.8%, ranking Coast to Capital 28th out of 38 LEPs. Lowering our position by two places when compared to our 2016 growth rate. Crawley remains the local authority with the highest GVA per head at £53,880, however this is likely to be negatively impacted by COVID-19 restrictions and EU withdrawal, as Crawley currently has the highest claimant count and furlough rates in Coast to Capital.




The Coast to Capital workforce has been disproportionately impacted by the pandemic


If businesses are not able to bounce back once restrictions are relaxed and unemployment spikes after the furlough scheme ends in September 2021, future GVA releases are expected to show a significant decline in the Coast to Capital economy. As of May 2021, 19% of our workforce were on some form of work related benefits compared to 13% for England. The Bank of England predicts Gross Domestic Product (GDP) growth in the UK could grow by 7% in 2021 returning to pre-COVID-19 levels by the end of 2021, but there is still two years of lost economic growth, exposing the potential for long term economic scaring. 


Targeted interventions will be required to support our current and future labour market


Understanding our labour market is another crucial element and we will continue to monitor claimant counts and job postings to understand skills demands and re-training needs. Data from the 2021 Census survey, becoming available in 2022, will support our understanding  of how the pandemic impacted our demographics, in particular our working age population as historically we had an older workforce who were at higher risk of COVID-19 infection.


Diversifying the region’s economy and making it more resilient will be important to our future recovery


We are committed to providing up to date information on the state of our regional economy and will continue to monitor a range of socio-economic metrics. We will forecast future GVA impacts by monitoring the lost labour input in our sectors. This will provide insight into our most impacted sectors and where we can provide targeted interventions of support through our Growth Hub to help with business resilience and diversification.


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