Gross disposable household income (GDHI) for local enterprise partnerships: 1997 to 2014

Buckinghamshire Thames Valley Local Enterprise Partnership (LEP) had the highest gross disposable household income (GDHI) per head at £23,778 in 2014. The LEPs with the highest GDHI per head were based around London and the South East. The average GDHI per head for England in 2014 was £18,315.

The majority of LEPs had GDHI per head below the average for England in 2014. The LEPs with the lowest GDHI per head were generally based in the Midlands and the North of England. Black Country LEP had the lowest GDHI per head in 2014 at £13,707.

Between 2009 and 2014, the LEPs with the highest average annual growth rate in total GDHI were London (3.9%), followed by West of England (3.4%). The lowest growth rate was in Lancashire (1.7%).

GDHI is calculated as the sum of the primary account (including wages and salaries, investment and property incomes) and the secondary account (including social benefits received and direct taxes and social contributions paid). The impact of the secondary account is to reduce the gap in relative incomes between the LEPs with the highest and lowest income levels.

Local enterprise partnerships (LEPs) are partnerships in England between local authorities and businesses. They were created in 2011 and their role is to help shape local economic priorities and undertake activities to drive local economic growth and the creation of jobs. There are 39 LEPs. Every local authority in England belongs to at least 1 LEP. However, some local authorities belong to more than 1 LEP (see Background notes).

This release provides data on gross disposable household income (GDHI) for each LEP. A time series with data back to 1997 is included, while the latest data available are for the calendar year 2014. The data have been produced to be consistent with our existing regional GDHI data that are published annually for the NUTS geographies. As such, these LEP GDHI data carry the National Statistics badge.

GDHI is the amount of money that all of the individuals in the household sector have available for spending or saving after income distribution measures (for example, direct taxes, social contributions and benefits) have taken effect. It should be noted that these estimates relate to totals for all individuals within the household sector for a region rather than to an average household or family unit. Figures quoted are at current prices, which include the effects of price changes (inflation).

Total GDHI estimates in millions of pounds (£ million) are divided by the resident population of a region to give GDHI per head in pounds (£). This can be a useful way of comparing regions of different sizes. GDHI per head are estimates of values for each person, not each household.

Table 1 presents the LEP areas with the highest and lowest annual growth rate in GDHI in 2014. London LEP had the highest annual growth rate at 3.4%. By contrast, there were 7 LEP areas in the North and Midlands in which total GDHI declined between 2013 and 2014. The average growth rate for England in this period was 1.4%.

Table 2 shows the LEPs with the highest and lowest average annual growth rate in GDHI between 2009 and 2014. The table shows that the average GDHI growth (in current prices) has been positive for all LEPs. The figures show that the LEPs with the highest average annual growth rate over this period were in London and the South, while the lowest growth rates were recorded for LEPs in the North of England.

Table 3 shows the LEPs which had the highest and lowest total GDHI in 2014.

Total GDHI is affected by the population size of the area. GDHI per head data is a useful way of comparing areas of different sizes. It allows us to examine growth in incomes within the household sector over time relative to changes in the size of the population¹.

Table 4 shows the LEPs which had the highest and lowest GDHI per head in 2014. Buckinghamshire Thames Valley LEP had the highest GDHI per head in 2014 at £23,778, with the other LEPs in the top 5 also based around London and the South East.

The Black Country LEP had the lowest GDHI per head at £13,707. The England average GDHI per head in 2014 was £18,315.

Figure 1 shows the distribution of GDHI per head in 2014 across all 39 LEPs in England. There were 14 LEPs with GDHI per head above the England average, mostly based around London and the South of England but also including Cheshire and Warrington LEP and South East Midlands LEP. The lowest GDHI per head in the South of England was in Cornwall and Isles of Scilly. However, there were 16 LEPs in the North and Midlands with lower GDHI per head than Cornwall, with the lowest levels typically found in major urban centres such as the Black Country, Tees Valley and Sheffield City Region.

Notes for GDHI per head

1. For data on economic output by LEPs, ONS has published LEP data for GVA and labour productivity.

The calculation of gross disposable household income (GDHI) can be traced back to its component parts. In such an analysis, GDHI is calculated as the sum of the primary account and the secondary account of the household and non-profit institutions serving households (NPISH) economic sector. In turn, both of these accounts are made up of resources (incomings) and uses (outgoings).

The primary account is mostly made up of resources into the household sector including wages and salaries, income from self-employment, income from the ownership of financial assets and also net rental income from buildings.

The secondary account reflects some of the elements that re-distribute primary income. It includes incomings such as social benefits received and other current transfers such as monetary gifts balanced against outgoings such as direct taxes (for example, income tax) and social contributions (for example, national insurance contributions).

Figure 2 shows the LEPs with the highest and lowest level of primary income per head, alongside each LEPs level of GDHI per head. The difference between the two values reflects the impact of the secondary account, which includes (direct) taxes and social benefits. It should be noted that (by definition) the calculation of GDHI does not include any impact of indirect taxes or of benefits in kind (for example, from consumption of state provision of education or health services). They also do not account for differences in the cost of living between different areas.

Figure 2 shows that the impact of the taxes (direct) and benefits included within the secondary account is a reduction in size of the household income gap per person between the richest and poorest areas. Therefore, while the average primary income per head in London in 2014 was more than double (107%) that of the LEP with the lowest level of primary income (Black Country), the gap between the LEP with the highest GDHI (Buckinghamshire Thames Valley) and lowest GDHI (Black Country) was lower at 73%.

Examining just the resources (incomings) flowing into the household and non-profit institutions serving households (NPISH) sector, Figure 3 shows the LEPs with the highest and lowest proportions of primary resources as a percentage of total resources (primary plus secondary) in 2014, with the England average shown for comparison.

As would be expected, the areas with high GDHI per head also tend to have the higher shares of total incomings from primary income sources. London LEP had the largest proportion at 84.9%, followed by Thames Valley Berkshire LEP at 82.3%. By contrast, for some LEPs, only around 70% of incoming resources where from primary sources as opposed to secondary sources. Liverpool City Region LEP had the smallest share of primary resources as a proportion of total household incomings in 2014, at 70.6%. This was followed by Tees Valley LEP at 70.7%.