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Levels of Public Investment in the East Midlands, July 2021

The most recent HM Treasury report confirms the region is continuing to lose out in terms of public investment.  Of continued concern are the comparably low levels of infrastructure and economic development funding – with an obvious implication for future rates of local and regional economic growth.

The lack of public investment has been a catalyst for collective work and lobbying by council and business leaders and MPs.  There is growing expectation that the work invested in by councils over a number of years should be reflected by an improvement in investment – but any improvement is difficult to see.  In summary, it remains that the East Midlands has:

  • The lowest level of public expenditure on ‘economic affairs’.
  • The lowest level of public expenditure on transport, in total and per head.
  • The lowest level of public expenditure on services per head.

Between 2014-15 and 2019-20, total expenditure on services has remained consistently below the England average (£725 per head lower in 2019/20).  If the Northern Powerhouse is seen as a primary competitor for investment funds, then it has been given a head start (£1,084 per head better funded than the East Midlands).  And there’s an imbalance within the pan-Midlands partnership with the West Midlands, at a little over £691 per head better off, faring comparably well too. 

The EMC Regional Investment Briefing Note is available from here:

Some Reflections

This is HM Treasury data – official, national statistical analysis.  It is therefore robust and incontrovertible; being consistent, credible, and comparable (and independent from regional and local partners).

The data confirms ongoing underfunding of the East Midlands, both in real terms and when compared to other regions.  Clearly measures taken to increase levels of investment have had little effect over the past few years, even allowing for any time lag in data sets.

The low levels of relative and absolute public investment in the East Midlands, particularly transport spend, remains an important and concerning issue because of the impact that poor transport can have on productivity. 

If the East Midlands was funded to a level equivalent to the UK average, over the 3 years since 2017, the region would have benefited from an extra £3.5bn of funding for ‘economic affairs’, or £2.5bn if matched to the levels of the West Midlands; and similarly, the region would have an extra £1 billion a year to spend on transport if funded at a level equivalent to the UK average.

The region remains at the bottom of the table, and our funding levels are clearly decoupling from other regions, particularly the West Midlands and the North West have seen notable uplifts in levels of investment – perhaps related to the establishment of powerful Metro-Mayors.