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Regions and Cities at a Glance 2018 – UNITED KINGDOM http://www.oecd.org/regional

Economic trends in regions

Regional gap in GDP per capita, 2000-16 Index of regional disparity in GDP per capita, 2016

Top 20 % richest over bottom 20% poorest regions 2016 2000 GDP per capita in USD PPP Ratio 4 80 000 Small regions Large regions Highest region (TL3) (TL2) 70 000 Greater London 60 000 67 455 USD 3 50 000 United Kingdom 40 000 34 911 USD 2 30 000 Lowest region 20 000 Wales 1 10 000 27 892 USD 2000 2005 2010 2016

Country (number of regions considered) Regional disparities in terms of GDP per capita are high and have increased in the United Kingdom over the last sixteen years. In 2016, the GDP per capita in Wales was equivalent to 41% of the GDP per capita in Greater London. The United Kingdom has the 6th highest regional economic disparities among 30 OECD countries with comparable data and recorded the 4th largest increase in disparities between 2000 and 2016. With a productivity growth of 1.3% per year over the period 2000-16, Greater London has not only the highest productivity level among UK regions but also experienced the largest productivity growth. In contrast, productivity in South West England grew by 0.4% per year, widening the gap to Greater London, the productivity frontier in the United Kingdom. While youth unemployment in regions of the United Kingdom has been falling more rapidly than the OECD average since the crisis, large regional differences exist. West Midlands has the highest youth unemployment rate (17.7% in 2017), almost twice as high as the youth unemployment rate in Scotland. Productivity trends, most and least dynamic regions, 2000-16 Youth unemployment rate, 15-24 years old, 2007-17 GDP per worker in USD PPP rate (%) 120 000 Greater London: highest Highest rate 110 000 productivity in 2016 and 25 West Midlands highest productivity 17.7% 100 000 growth (+1.3% average 20 Greater London: highest 90 000 annual growth over OECD productivity growth United 2000-16) 15 80 000 (+1.3% annually) Kingdom United Kingdom S.W. England: lowest 12.1% 70 000 productivity growth 10 (+0.4% annually) Lowest rate 60 000 Scotland 2000 2005 2010 2016 5 2007 2012 2017 9.2% Source: OECD Regional Database. Notes: (1) Figure on regional gap in GDP per capita: OECD regions refer to the administrative tier of subnational government (large regions, Territorial Level 2); the United Kingdom is composed of 12 large regions. (2) Figure on index of regional disparity: top (bottom) 20% regions are defined as those with the highest (lowest) GDP per capita until the equivalent of 20% of national population is reached, this indicator provides an harmonised measure to rank OECD countries, using data for small regions (Territorial Level 3) when available. (3) Productivity is measured as GDP per employee at place of work in constant prices, constant Purchasing Power Parities (reference year 2010).

Updated the 5th of March 2019 Differences in well-being across regions

Top region Bottom region Greater Regions and countries London South East Greater Greater Scotland North East Greater England London England London London North East top top 20% South East England Greater England London

(1 to 402) to (1 Scotland North East England Scotland North East Northern East of

middle middle 60% England Ireland England Northern Northern Greater North East Ireland Ireland London England Scotland Yorkshire and Ranking Ranking OECD of regions The Humber Northern

Ireland bottom bottom 20%

Health Safety Jobs Income Community Housing Environment Education Access to Civic Life services Engagement Satisfaction Relative ranking of the regions with the best and worst outcomes in the 11 well-being dimensions, with respect to all 402 OECD regions. The eleven dimensions are ordered by decreasing regional disparities in the country. Each well-being dimension is measured by the indicators in the table below.

In six out of the eleven well-being dimensions, at least one UK region ranks in the top 20% of OECD regions. Greater London is the British region with the highest well-being outcomes in health, income, education and access to services, but the lowest ones in housing. The largest regional disparities are found in the dimensions health, safety and jobs. In terms of jobs, South East England ranks in the top 5% of OECD regions whereas Northern Ireland is close to the OECD median region. Apart from voter turnout, the high performing UK regions fare better than the OECD median region in all well-being indicators. For example, their disposable income per capita is around 45% higher than the OECD median. In the low performing regions, the percentage of voters in the last election was about 62%, eight percentage points below the OECD median, while the share of households with broadband access is more than ten percentage points above the OECD median.

Country OECD median UK regions and countries Average region Top 20% Bottom 20% Health Life Expectancy at birth (years), 2016 81.2 80.4 82.7 79.7 Age adjusted mortality rate (per 1 000 people), 2016 7.7 8.1 6.9 8.6 Safety Homicide Rate (per 100 000 people), 2016 1.2 1.3 0.7 2.0 Jobs Employment rate 15 to 64 years old (%), 2017 72.8 67.7 76.4 69.8 Unemployment rate 15 to 64 years old (%), 2017 4.5 5.5 3.5 5.5 Income Disposable income per capita (in USD PPP), 2016 20 610 17 695 25 589 17 656 Community Perceived social netw ork support (%), 2013 94.8 91.4 95.9 92.8 Housing Rooms per person, 2016 1.9 1.8 2.1 1.8 Environment Level of air pollution in PM 2.5 (µg/m³), 2015 9.2 12.4 7.2 11.7 Education Labour force w ith at least upper secondary education (%), 2017 83.3 81.7 87.5 79.7 Access to services Households w ith broadband access (%), 2017 93.0 78.0 96.0 88.8 Civic engagement Voters in last national election (%), 2017 or lastest year 66.1 70.9 70.0 62.1 Life Satisfaction Life satisfaction (scale from 0 to 10), 2013 6.9 6.8 7.1 6.8 Source: OECD Regional Database. Visualisation: https://www.oecdregionalwellbeing.org. Notes: (1) OECD regions refer to the first administrative tier of subnational government (large regions, Territorial Level 2); the United Kingdom is composed of 12 large regions. (2) Household income per capita data are based on USD constant PPP, constant prices (year 2010).

Updated the 5th of March 2019 Metropolitan areas in the national economy

OECD population is concentrated in cities* Percentage of population in cities, 2016 UnitedUnited KingdomStates OECD average people outside cities people 21% outside cities people in cities 30% 1.2 billion 65.4 million with population people in cities with people - 79% people in cities people - 70% 55% 11% 53% with population above 500 000 population between live in cities live in cities 50 000 and 250 000 above 500 000 people in cities with 6% population between 15% 9% people in cities with 50 000 and 250 000 population between people in cities with population 250 000 and 500 000 between 250 000 and 500 000

Source: OECD Metropolitan Database. Number of cities: 47 in the United Kingdom and 1 138 in the OECD.

In the United Kingdom, 79% of the population lives in cities of more than 50 000 inhabitants. The share of population in cities with more than 500 000 people is 53%, in line with the OECD average (55%).

Importance of metropolitan areas Contribution of metropolitan areas to GDP growth Cities above 500 000 people, 2016 Cities above 500 000 people, 2000-16

% United Kingdom OECD average % United Kingdom OECD average 80 80 68% 70 63% 70 65% 59% 56% 58% 60 53% 55% 60 50 50 40 40

30 30 areas 20 20 10

10 327metropolitan London 0 0 % of national % of national % of national 1 2 All metropolitan areas Largest contributor GDP employment population Metropolitan areas in the United Kingdom account for 59% of national GDP and 56% of employment. Between 2000 and 2016, the UK metropolitan areas generated 65% of national GDP growth. The metropolitan area of London contributed 38% to national GDP growth. In terms of GDP per capita, London is among the richest 20% of the 327 OECD metropolitan areas. Kingston upon Hull and Sheffield are among the bottom 20% of OECD metropolitan areas. When considering levels of PM 2.5, Edinburgh is in the 20% least polluted OECD metropolitan areas. OECD Metropolitan areas ranking Cities above 500 000 people, 2016

USD PPP 100 000 80 000 GDP per 60 000 40 000 capita, 2016 20 000 0 Top 20% richest Bottom 20% poorest metropolitan areas metropolitan areas

Lev el of air pollution in PM 2.5 (µg/m³) 30 Air pollution 20 (PM2.5), 2017 10 0 Top 20% least polluted Bottom 20% most polluted metropolitan areas metropolitan areas

Source: OECD Metropolitan Database. Number of metropolitan areas with a population of over 500 000: 20 in the United Kingdom compared to 327 in the OECD. * Note: Cities are defined here as functional urban areas, which are composed by high-density urban centres of at least 50 000 people and their areas of influence (commuting zone). For more information, see: http://www.oecd.org/cfe/regional-policy/functionalurbanareasbycountry.htm.

Updated the 5th of March 2019 Subnational government finance

Subnational government expenditure by function As a share of total subnational government expenditure, 2016

United Kingdom 00 OECD average

Social protection 36% 11 14% Social protection

Education 27% 22 25% Education

Other 19% 33 15% Other

Economic affairs 9% 44 14% Economic affairs

General public services 7% 55 14% General public services

Health 2% 66 18% Health

Subnational expenditure per capita: USD 4 283 77 USD 6 817

Subnational government expenditure amounts to USD 4 283 per capita in the United Kingdom compared to an OECD average of USD 6 817. In the United Kingdom, this is equivalent to 24.2% of total public expenditure and to 10% of GDP. In comparison, across the OECD, subnational government expenditure accounts for 40.4% of total public expenditure and for 16.2% of GDP. Social protection and education are the two largest spending items for subnational governments in the United Kingdom. Together they represent 63% of subnational expenditure compared to 39% in the OECD area. In United Kingdom, 34.8% of total public investment was carried out by subnational governments compared to an OECD average of 56.9%. Role of subnational governments in public investment Subnational government public investment per capita, 2016

USD per capita United Kingdom OECD average 1 400

1 200

1 000 Total public investment USD 1 057 per capita 800 2.5% of GDP Total public investment USD 1 278 per capita 600 3.0% of GDP

400 Subnational government Subnational government investment 200 investment USD 367 per capita USD 727 per capita 0 34.8% of public invest. 56.9% of public invest.

Source: OECD Subnational Government Structure and Finance Database. Note: The function ‘Other’ includes housing and community amenities, recreation, culture and religion; environment; public order and safety.

OECD Regions and Cities at a Glance 2018 The 2018 edition of OECD Regions and Cities at a Glance shows how regions and cities contribute to national growth and the well-being of societies. It updates its regular set of region-by-region indicators, examining a wide range of policies and trends and identifying those regions that are outperforming or lagging behind in their country. Consult this publication on line: https://oe.cd/pub/2n9

Updated the 5th of March 2019