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Statistical bulletin: Regional Gross Disposable Household Income (GDHI), 2010 This product is designated as National Statistics

Correction

9 May 2012

A production error was discovered in the regional GDHI dataset, originally published on 25 April 2012. This affected the per head index values at the NUTS3 local area level and three regions at the NUTS2 sub-region level. The index values were incorrect as they compared regions to a UK total that included the Extra-Regio component. This error has now been corrected.

ONS apologises for any inconvenience caused.

Key points

  • In 2010 GDHI per head was above the UK average (£15,709) in England as a whole and in three NUTS1 regions: London, the South East and East of England.
  • Between 2009 and 2010 the rate of annual growth in GDHI per head increased in all NUTS1 regions except for the North East.
  • In 2010, Wales, London and the South West had the highest annual growth in GDHI per head at 3.3 per cent.
  • Of the 37 NUTS2 sub-regions, in 2010 Inner London had the highest GDHI per head (£23,846) while West Midlands had the lowest (£12,678).
  • Of the 139 NUTS3 areas, in 2010 Inner London - West had the highest GDHI per head (£33,323) while Nottingham had the lowest (£10,702).

Summary

This bulletin presents the latest estimates of Gross Disposable Household Income (GDHI) for regions, sub-regions and local areas of the UK. GDHI is the amount of money that the individuals in the household sector have available for spending or saving after income distributions measures (for example taxes, social contributions and benefits) have taken affect.

The figures are presented for areas according to the European classification of Nomenclature of Units for Territorial Statistics (NUTS) (see background note 1).

In 2010, regional GDHI per head was above the UK average (£15,709) in three regions: London (£20,238); the South East (£17,610); and East of England (£16,392). The lowest GDHI per head was in the North East (£13,329).

Regional Gross Disposable Household Income<1>, 2010

NUTS1 Regions GDHI per head (£) GDHI per head  growth on 2009 (per cent) GDHI per head index (UK=100) Total GDHI2  (£m) Total GDHI growth on 2009 (per cent) Share of UK total GDHI (per cent)
United Kingdom3 15 709 3.0 100.0 979 184 3.8 100.0
North East 13 329 2.8 84.8 34 743 3.6 3.5
North West 14 176 3.0 90.2 98 319 3.6 10.0
Yorkshire and The Humber 13 594 2.7 86.5 72 064 3.5 7.4
East Midlands 14 267 2.8 90.8 63 939 3.5 6.5
West Midlands 14 021 3.1 89.3 76 487 3.5 7.8
East of England 16 392 2.9 104.3 95 597 4.1 9.8
London 20 238 3.3 128.8 158 366 4.2 16.2
South East 17 610 2.9 112.1 150 088 3.9 15.3
South West 15 653 3.3 99.6 82 550 4.1 8.4
England 15 931 3.0 101.4 832 153 3.9 85.0
Wales 13 783 3.3 87.7 41 439 3.6 4.2
Scotland 15 342 3.2 97.7 80 119 3.8 8.2
Northern Ireland 13 554 2.3 86.3 24 390 2.9 2.5
Extra-Regio n/a n/a n/a 1 083 2.7 0.1

Table source: Office for National Statistics

Table notes:

  1. GDHI at current basic prices, based on a weighted 5-year moving average (see background note 2).

  2. Figures may not sum to totals as a result of rounding.
  3. The UK £ per head and per head index exclude Extra-Regio (see background note 1), while the total GDHI £m for the UK includes Extra-Regio.

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NUTS1: Regional GDHI per head UK map, 2010

NUTS1: Regional GDHI per head UK map, 2010
Source: Office for National Statistics

London's GDHI per head was 28.8 per cent above the UK average of £15,709 while the North East was 15.2 per cent below. London moved further from the UK average than in 2009 when it was 28.5 per cent above the average. The North East moved further away from the average, having been 14.9 per cent below the average in 2009.

About this release

1. Gross Disposable Household Income (GDHI) is the amount of money that the individuals in the household sector have available for spending or saving after income distribution measures (for example, taxes, social contributions and benefits) have taken effect.

2. The household sector comprises all individuals in an economy, that is, people living in traditional households as well as those living in institutions such as retirement homes and prisons. The sector also includes sole trader enterprises (the self-employed) and non-profit institutions serving households (NPISH). Examples of the latter include charities and most universities. It should be noted that these estimates relate to individuals within the household sector for a region rather than to a household.

3. A distinction can be made between the two stages of income distribution:

The allocation of primary income account shows the income of households generated from market transactions. The balance of primary income is equal to total primary resources less total primary uses:

  • Total primary resources: compensation of employees (income from employment), operating surplus (mainly rental, imputed or otherwise), mixed income from self-employment and property income received from financial assets

  • Total primary uses: property income paid (for example, mortgages, rent on land)

The secondary distribution of income account includes government redistribution of income. The balance of secondary income is equal to total secondary resources less total secondary uses:

  • Total secondary resources: social benefits (for example, state pensions, jobseekers allowance, incapacity benefits), other current transfers received (such as financial gifts, non-life insurance claims)

  • Total secondary uses: current taxes on income and wealth, social contributions paid (employee's pension/social security contributions), other current transfers paid (for example, non-life insurance premiums)

GDHI is derived from the balances of primary and secondary income. It includes consumption of fixed capital (the decline in value of fixed assets due to normal wear and tear, foreseeable obsolescence and a normal rate of accidental damage).

GDHI = Balance of Primary Income + Balance of Secondary Income

4. Per head data takes account of the entire population of regions, sub-regions and local areas. The working population and the economically inactive are included. These estimates are produced at current prices which are not adjusted to account for inflation.

5. GDHI estimates in this bulletin are available at three geographical levels, in accordance with the Nomenclature of Units for Territorial Statistics (NUTS). Changes to NUTS areas came into force on 1 January 2012 (see background note 1).

6. Regional GDHI estimates for 2010 are released for the first time with revisions back to 1997 (see background note 5). These estimates update those published in March 2011. Estimates for 2010 are based on incomplete regional data and should be considered provisional until revised next year.

7. These estimates are consistent with the National Accounts Blue Book 2011. National aggregates are allocated to regions using the most appropriate regional indicator. Blue Book 2011 published data for 1997 onwards, with which regional accounts time series are consistent.

8. At component level in 2009 and 2010 there has been a notable reduction across all regions in property income received (resources) and property income paid (uses). This can be traced to the national estimates for the UK (National Accounts Blue Book 2011), where large falls occurred in the national property income received and paid. These falls can be attributed to the impact of the financial crisis upon the FISIM (Financial Intermediation Services Indirectly Measured (109.8 Kb Pdf) ) adjustments applied within the Households & NPISH sector.

Economic commentary

Following a decline in real Gross Domestic Product (GDP) during the recession of Q2 2008 to Q2 2009, the UK economy returned to economic growth in Q3 2009. Growth continued into 2010 with the economy growing in each of the first three quarters of the year before it declined again in the final quarter of the year. Overall, the UK economy grew in real terms during 2010. The main positive influence on GDP growth was a build-up of inventories by businesses, following the large disposal of inventories seen in 2009. A smaller influence was growth in final consumption expenditure by both households and government.

Nominal regional GVA increased in all UK countries and regions during 2010. Growth was highest in the South East where it increased by 4.2 per cent year-on-year. All other areas had growth ranging between 3.2-4.0 per cent with the exception of Scotland (2.9 per cent) and London (1.6 per cent). London had, however, fared better the previous year when it was the only region not to see a decline in its nominal GVA.

Despite the improvement in economic output in 2010, many economic indicators showed a continuation of difficult economic conditions during the year. For example, business deaths exceeded business births for all countries and regions of the UK. Additionally, the number of workforce jobs in the UK fell slightly. This masked some regional variation in job levels with the East Midlands and East of England seeing growth in workforce jobs of over 2 per cent between December 2009 and 2010, whilst Wales, the North East and South West experienced a 2 per cent or more decline over the same period.

Unemployment rates across the UK countries and regions were fairly constant during 2010 having risen sharply in 2008 and 2009. The only statistically significant change in the unemployment rate occurred in Scotland, which experienced a small increase in unemployment. Inflation, meanwhile, remained significantly above the Bank of England's target of 2 per cent during 2010. Over the year, the Consumer Price Index (CPI) indicated a rise in consumer prices of 3.3 per cent compared to 2009.

All statistics mentioned in this section can be found on the ONS website.

 

Regional GDHI NUTS1 estimates

GDHI per head of population (NUTS1)

In 2010, the highest growth in GDHI per head was in Wales, London and the South West at 3.3 per cent. The lowest growth was in Northern Ireland at 2.3 per cent, followed by Yorkshire and The Humber at 2.7 per cent.

NUTS1: GDHI per head growth on previous year, 2008, 2009 and 2010

NUTS1: GDHI per head growth on previous year, 2008, 2009 and 2010
Source: Office for National Statistics

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In 2010, the rate of GDHI per head growth was higher than in 2009 in all regions except the North East. The rate of annual growth increased most in Northern Ireland (from -0.4 per cent in 2009 to 2.3 per cent in 2010).

With the exception of Northern Ireland, GDHI per head grew in all of the NUTS1 regions in the years 2008, 2009 and 2010. Northern Ireland decreased in 2009, mainly driven by a fall in wages and salaries.

NUTS1: GDHI per head index comparison with UK average, 1997 and 2010

NUTS1: GDHI per head index comparison with UK average, 1997 and 2010
Source: Office for National Statistics

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When compared with the UK average, in 1997 and 2010, only London, the South East and East of England had GDHI per head indices above the UK value.

Between 1997 and 2010 four regions' per head indices increased compared with the UK average. The largest of these were London, which increased from 122.3 to 128.8, and Scotland, which increased from 93.6 to 97.7. Scotland is the only region in which the per head index has increased in every year since 2002.

Between 1997 and 2010 Yorkshire and The Humber showed the greatest downward movement away from the UK average, with a decrease from 91.1 to 86.5. Yorkshire and The Humber is the only region in which the per head index has not increased in any year since 1998.

Total GDHI (NUTS1)

In 2010, total GDHI increased in all UK regions. The highest percentage growth was in London (4.2 per cent) and the lowest in Northern Ireland (2.9 per cent). These compare with the total UK growth of 3.8 per cent.

In 2010, the rate of annual growth was higher than that in 2009 in each region except for the North East. The rate of growth increased most in Northern Ireland (from 0.4 per cent in 2009 to 2.9 per cent in 2010).

Regional shares of total GDHI (NUTS1)

London had the largest increase in regional share of UK GDHI between 1997 and 2010 (from 14.7 per cent to 16.2 per cent). The largest decrease in share over this period was in the North West, from 10.6 per cent to 10.0 per cent. Extra-Regio (see background note 1) accounted for 0.1 per cent of UK GDHI in 2010.

Sub-regional (NUTS2) and local (NUTS3) GDHI estimates

NUTS2 Sub-regions: Top five and bottom five<1> GDHI<2> per head, 2010

NUTS2 Sub-regions                                                    GDHI per head (£) GDHI per head growth on 2009 (per cent) GDHI per head index (UK=100) Total GDHI (£m) Total GDHI growth on 2009 (per cent)
United Kingdom3 15 709 3.0 100.0 979 184 3.8
           
Top five GDHI per head
Inner London 23 846 3.8 151.8 73 522 4.6
Surrey, East and West Sussex 18 817 2.8 119.8 50 831 3.9
Berks, Bucks and Oxon 18 379 2.6 117.0 41 416 3.9
Outer London 17 892 2.9 113.9 84 844 4.0
Bedfordshire and Hertfordshire 17 830 2.8 113.5 30 708 4.1
           
Bottom five GDHI per head
East Yorks and Northern Lincs 13 303 3.0 84.7 12 256 3.4
Tees Valley and Durham 13 156 2.8 83.7 15 460 3.5
West Yorkshire 13 125 2.4 83.5 29 525 3.4
South Yorkshire 13 030 2.6 82.9 17 308 3.5
West Midlands 12 678 2.8 80.7 33 662 3.4

Table source: Office for National Statistics

Table notes:

  1. Data for all NUTS2 sub-regions are included in tables 2.1 to 2.3.
  2. GDHI at current basic prices, based on weighted 5-year moving average (see background note 2).
  3. The UK £ per head and per head index exclude Extra-Regio (see background note 1), while the total GDHI £m for the UK includes Extra-Regio.

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GDHI per head of population (NUTS2)

Inner London had the highest GDHI per head (£23,846), followed by Surrey, East and West Sussex (£18,817). The West Midlands had the lowest (£12,678), followed by South Yorkshire (£13,030).

NUTS2: GDHI per head grouped by NUTS1 region, 2010

NUTS2: GDHI per head grouped by NUTS1 region, 2010
Source: Office for National Statistics

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In 2010, of the 37 NUTS2 sub-regions, 14 were above the UK average GDHI per head (£15,709), including all those within London and the South East. In each of the NUTS2 sub-regions within the North East, East Midlands, Wales and Northern Ireland, the GDHI per head was below the UK average.

Total GDHI (NUTS2)

In 2010, total GDHI grew in all NUTS2 sub-regions, with the highest percentage growth in Highlands and Islands and Inner London, both at 4.6 per cent.

In 2010, the rate of growth in total GDHI increased in 30 of the 37 NUTS2 sub-regions. The largest increases occurred in Northern Ireland (from 0.4 per cent in 2009 to 2.9 per cent in 2010) and North Yorkshire (from 1.8 per cent in 2009 to 4.1 per cent in 2010).

GDHI per head of population (NUTS3)

NUTS3 Local areas: Top five and bottom five<1> GDHI<2> per head 2010

NUTS3 Areas                                                                        GDHI per head (£) GDHI per head growth on 2009 (per cent) GDHI per head index (UK=100) Total GDHI (£m) Total GDHI growth on 2009 (per cent)
United Kingdom3 15 709 3.0 100.0 979 184 3.8
Top five GDHI per head
Inner London - West 33 323 4.0 212.1 37 619 5.0
Surrey 21 501 2.6 136.9 24 239 3.9
Buckinghamshire CC 20 853 3.2 132.7 10 386 3.9
Hertfordshire 19 441 3.2 123.8 21 531 4.4
Outer London - West & North West 19 138 3.1 121.8 35 351 4.1
           
Bottom five GDHI per head
West & South of Northern Ireland 12 130 1.1 77.2 5 026 2.3
Leicester 11 413 2.9 72.6 3 500 3.6
Blackburn with Darwen 11 346 2.9 72.2 1 589 3.0
Kingston upon Hull, City of 11 149 2.8 71.0 2 942 3.4
Nottingham 10 702 1.5 68.1 3 282 3.5

Table source: Office for National Statistics

Table notes:

  1. Data for all NUTS3 local areas are included in tables 3.1 to 3.3.
  2. GDHI at current basic prices, based on weighted 5-year moving average (see background note 2).
  3. The UK £ per head and per head index exclude Extra-Regio (see background note 1), while the total GDHI £m for the UK includes Extra-Regio.

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In 2010, of the 139 NUTS3 areas, 47 were above the UK average GDHI per head. Inner London - West had the highest GDHI per head (£33,323), followed by Surrey (£21,501). Nottingham (£10,702) had the lowest, followed by Kingston-upon-Hull (£11,149). In 2010, GDHI per head increased in each of the NUTS3 areas.

NUTS3: GDHI per head growth on previous year, 2008, 2009 and 2010

NUTS3: GDHI per head growth on previous year, 2008, 2009 and 2010
Source: Office for National Statistics

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The chart above shows the top and bottom five NUTS3 local areas by GDHI per head in 2010. The recession appears to have had a greater impact upon the five NUTS3 local areas with the highest GDHI per head. Each showed a marked decrease in their rates of annual growth in 2009, followed by a similar increase in 2010. By contrast, with the exception of West and South of Northern Ireland, within the five areas with the lowest GDHI per head there was less fluctuation in the rates of annual growth over the three years.

Of the 139 NUTS3 local areas, the largest increases in the rate of annual growth were in Inner London - West (from 0.9 per cent in 2009 to 4.0 per cent in 2010), East of Northern Ireland (from -0.9 per cent in 2009 to 2.2 per cent in 2010) and North Yorkshire CC (from 0.7 per cent in 2009 to 3.8 per cent in 2010).

The largest decrease in the rate of annual growth was in the Orkney Islands (from 7.9 per cent in 2009 to 5.6 per cent in 2010). However, of the 139 NUTS3 areas, the Orkney Islands had the highest growth in GDHI per head in both 2009 and 2010. The Orkney Islands economy is more self-contained than Scotland and the UK as a whole. It is therefore likely to be affected less by the recession. A relatively large public sector per capita (where wages have remained relatively stable) and growth in the renewable energy sector in Orkney during 2010, may also have contributed.

Total GDHI (NUTS3)

In 2010, total GDHI grew in all NUTS3 areas, with the highest percentage growth in the Orkney Islands (6.5 per cent) followed by the Shetland Islands (5.4 per cent). The lowest percentage growth was in West and South of Northern Ireland (2.3 per cent).

In 2010, the rate of growth in total GDHI increased most in Inner London West (from 1.9 per cent in 2009 to 5.0 per cent in 2010).

Further analysis of the components of GDHI at NUTS1

For more information on the makeup of the primary and secondary accounts, please see the section 'About this release'.

Gross Operating Surplus (GOS), Mixed Income (MI) and Compensation of Employees (CoE)

These three components together make up the bulk of primary resources, which is the income earned by the household sector as a result of productive activity or the ownership of productive assets. They include wages and salaries, rental (imputed or otherwise) and income from self employment.

NUTS1: Percentage of total resources from GOS, MI and COE, UK maps

NUTS1: Percentage of total resources from GOS, MI and COE, UK maps
Source: Office for National Statistics

These maps show the percentage of a region's total income (primary resources plus secondary resources) that was made up of the combined COE, GOS and MI components in 1997 and 2010.

In 2010, of the 12 NUTS1 regions, London and the South East get the greatest proportion of their overall income from these components, at 72.5 per cent and 68.5 per cent respectively. Wales and Northern Ireland get the smallest proportion of their overall income from these components, at 61.3 per cent and 62.5 per cent respectively.

The contribution of these components to London's income has increased by 6.7 percentage points since 1997. In 1997, the South West was the region that received the lowest proportion of its income from these components, at 58.9 per cent, but between 1997 and 2003 it increased by 5.8 percentage points, more than any other region except for London during that period. This can be seen on the following chart.

The chart below shows the NUTS1 regions ranked in order of their proportion of GOS, MI and COE to their total resources. Throughout most of the time series, London has the highest proportion and Wales the lowest.

NUTS1: Regions ranked by percentage of total resources from CoE, GOS and MI

NUTS1: Regions ranked by percentage of total resources from Compensation of Employees, Gross Operating Surplus and Mixed Imcome
Source: Office for National Statistics

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Taxes on Income and Other Current Taxes

Taxes on income and other current taxes is one of the larger components of secondary uses, that is the amount paid by the household sector in the redistribution of income account. They are compulsory payments made by the household sector to the government sector and include income tax and other taxes such as on vehicles, council tax and TV licences.

NUTS1: Percentage of total uses paid out as tax, UK maps

NUTS1: Percentage of total uses paid out as tax, UK maps
Source: Office for National Statistics

The maps show the percentage of total uses (primary uses plus secondary uses), or outgoings, that the household sector in a region pays out as tax. In 2010, London and the South East had the highest proportion of their outgoings as tax at 44.1 per cent and 42.2 per cent respectively. Northern Ireland had the lowest proportion of its outgoings as tax, at 34.7 per cent, followed by Wales at 36.3 per cent.

The South West again saw the largest increase in its proportion over the time series, from 33.4 per cent in 1997 to 39.1 per cent. Most of this increase occurred in 2008 and 2009. Yorkshire and The Humber had the smallest increase, from 35.2 to 38.2 per cent.

The chart below shows the NUTS1 regions ranked in order of their proportion of tax paid to their total uses. Throughout the time series, London has the highest proportion and Northern Ireland the lowest.

NUTS1: Regions ranked by percentage of total uses paid in taxes

NUTS1: Regions ranked by percentage of total uses paid in taxes
Source: Office for National Statistics

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Social Benefits and Imputed Social Contributions

Social benefits (other than social transfers in kind) and imputed social contributions is the main source of secondary resources, the amount received by the household sector in the redistribution of income. They include national insurance fund benefits, such as state pensions and unemployment allowance, and non-contributory benefits such as child benefits and tax credits. Imputed social contributions are those paid directly by employers to current and former employees.

NUTS1: Percentage of total resources from Social Benefits and Imputed Social Contributions, UK maps

NUTS1: Percentage of total resources from Social Benefits and Imputed Social Contributions, UK maps
Source: Office for National Statistics

These maps show that in 2010, of the NUTS1 regions, Wales and the North East were the regions in which the household sector received the largest proportion of their total resources (primary plus secondary resources) from social benefits, at 25.9 per cent and 24.6 per cent respectively. London and the South East received the lowest proportion of their income from social benefits with 13.8 per cent and 18.3 per cent respectively.

London is the only region where the contribution of social benefits to total income has reduced since 1997, from 14.7 to 13.8 per cent. The West Midlands has seen the greatest increase in its proportion of this source of income, from 18.7 to 22.8 per cent.

In all regions, the proportion of household sector resources that consisted of social benefits rose in 2008 and 2009.

The chart below shows the NUTS1 regions ranked in order of their proportion of social benefits to their total resources. Throughout the time series, Wales has the highest proportion and London the lowest.

NUTS1: Regions ranked by percentage of total resources from Social Benefits and Imputed Social Contributions

NUTS1: Regions ranked by percentage of total resources from Social Benefits and Imputed Social Contributions
Source: Office for National Statistics

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Domestic (UK) use of regional GDHI estimates

These statistics provide an overview of economic diversity and social welfare at regional, sub-regional and local area levels. They supply information about the availability of disposable income throughout the UK. Disposable income is a concept which can be used to approximate the 'material welfare' within the household sector, although the term 'welfare' is commonly used in ways that go beyond financial wealth and, as such, cannot be measured by a single statistic.

These estimates are used by the UK Government and the devolved administrations of Northern Ireland, Scotland and Wales to formulate and monitor economic policy and allocate resources.

The Scottish Government uses these statistics within the Scottish National Accounts Project (SNAP) system, in modelling quarterly estimates of Household Distribution and Use of Income and also in the compilation of a Household Saving Ratio. The resulting SNAP outputs are widely used by economic commentators and academics in Scotland.

These estimates are not currently used in any of the Scotland Performs National Indicators, however there is an increasing demand for the Scottish Government to provide a wider range of socio-economic indicators alongside Gross Domestic Product. The Scottish Government is considering including Household Income and Households Saving Ratio in this suite of national indicators.

The Welsh Government regards the GDHI statistics as a key economic indicator. A current example of this is through the Programme for Government. This identifies the Welsh Government's commitments and the means by which progress will be measured over the five-year term. Within the Programme for Government, and in relation to Growth and Sustainable Jobs, Gross Disposable Household Income (GDHI) per capita and Primary Income per capita are identified as two of four key outcome indicators for Wales.

The Northern Ireland Executive uses these statistics in conjunction with other economic measures and surveys to give an overall picture of the economy.

Local authorities use these statistics to facilitate evidence-based policy-making. These statistics inform the general public and provide insight into the relative socio-economic picture of the UK and issues such as the 'North-South divide'. They are used in the House of Commons library to answer enquiries from MPs about regional differences in the income of households.

The ONS Regional Accounts team also receives general enquiries relating to these estimates from a diverse range of bodies including other government departments, local authorities, business analysts, consultancy firms, financial institutions, economists and the media (provincial and national). These statistics also facilitate academic research by individuals and universities within the UK and abroad.

The countries and regions of the UK have differing demographic characteristics, industrial structure and economic performance. There is also a wide variation in the size and population of the regions which makes comparison difficult using cash totals. Estimates on a per head basis allow for the comparison of regions significantly different in absolute size.

NUTS3: GDHI per head highest and lowest NUTS3 area within each NUTS1 region, 2010

NUTS3: GDHI per head highest and lowest NUTS3 area within each NUTS1 region, 2010
Source: Office for National Statistics

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European use of Disposable Household Income estimates

The production of regional disposable income of households is a legal requirement under the European System of Accounts (ESA 1995). Whereas Gross Disposable Household Income is compiled for UK domestic use, the estimates provided to Eurostat (the statistical department of the European Commission) are net of consumption of fixed capital (see section 'About This Release') at a NUTS2 level.

Consumption of fixed capital (CFC) is included in the Gross Operating Surplus/Mixed Income (GOS/MI) components of the Primary Income Account. The CFC element is estimated and removed from the regional GOS/MI, to derive the Net Disposable Household Income (NDHI) estimates.

The European Union (EU) uses these NDHI estimates to inform regional policy and analysis, monitoring the development of regional disposable income of households in order to identify disparities in regional welfare across the member states.

Member states provide estimates of NDHI in their national currencies. Eurostat then convert these using specific purchasing power standards for final consumption expenditure, called Purchasing Power Consumption Standards (PPCS). This process enables meaningful comparisons to be made between the Member States.

The following chart illustrates variation in the range of disposable income of private households (per inhabitant), at NUTS2 geography, within the EU in 2008. Inner London has the highest disposable income per head in the EU, expressed in PPCS.

Disposable income of private households per inhabitant (in PPCS), highest and lowest NUTS2 region within each country, 2008

Disposable income of private households per inhabitant (in PPCS), highest and lowest NUTS2 region within each country, 2008
Source: Eurostat

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Future work plans

  • ONS plans to publish estimates of regional Gross Value Added (GVA) for 1997 to 2011 and sub-regional and local GVA for 1997 to 2010, in December 2012.
  • The publication of Regional Gross Disposable Household Income (GDHI) estimates for the period 1997 to 2011 is currently planned for spring 2013.

  • A project is underway to develop estimates of real regional GVA growth using a production approach. A report of progress (237.3 Kb Pdf) to date and plans for these statistics was published in March 2012.

  • Regional Accounts plans to publish updated Quality Methodology Information reports for Regional GVA and Regional GDHI outputs during 2012, detailing methods used to produce these statistics.

  • ONS Methodology Directorate is reviewing the methods used to produce smoothed (headline) GVA and GDHI estimates and to take account of commuting in the workplace based GVA estimates. It is planned to publish the findings of these reviews during 2012 and consult users prior to implementing any changes.

Background notes

  1. The Nomenclature of Units for Territorial Statistics (NUTS) provides a single uniform breakdown for the production of regional statistics for the EU. These regional GDHI estimates are compiled at three levels of NUTS geography:

    • NUTS1: Wales, Scotland, Northern Ireland and the nine English regions

    • NUTS2: 37 areas - mainly groups of counties and unitary authorities; can be referred to as sub-regions

    • NUTS3: 139 areas – principally individual counties and unitary authorities; also known as local areas

    • Some areas appear at more than one level, for example Northern Ireland appears at NUTS1 and NUTS2 level

    The changes to NUTS areas proposed by the UK during the 2010 NUTS Review were accepted by the European Commission and came into force on 1 January 2012. There are seven changes to the NUTS3 areas in England. One of these changes impacts upon the NUTS2 level, with Halton moving from Cheshire to be included within Merseyside.

    The NUTS classification was established by Eurostat in the early 1970s as a single, coherent system for dividing up European Union territory in order to produce regional statistics for the EU. Since 2003, any changes to boundaries to account for local changes in, for instance, local authority boundaries, have needed to go through a formal process of application to the EU, with any changes being implemented at the end of pre-set periods of enforced stability.

    Economic activity that cannot be assigned to any specific region is allocated to Extra-Regio. This includes the contribution to GDHI of UK embassies abroad and UK forces stationed overseas.

  2. The headline regional GDHI series have been calculated using a five-year moving average technique. These adjusted series remove some year to year volatility in the unadjusted series.

  3. The GDHI estimates presented here are on a residence basis. This means that incomes of individuals are allocated to the region in which they live.

  4. Quality

    As with the national accounts, regional GDHI estimates are calculated as reliably as possible. There is no easy way to measure the reliability of the estimates but ONS carries out consistency checks on data inputs, applies methods consistently and makes use of local knowledge for England, Scotland, Wales and Northern Ireland through consultation with key users in the devolved administrations and other government departments. The estimates are partly based on sample surveys and the quality of the results therefore varies according to sample size. This means that the results for smaller regions are subject to a greater degree of uncertainty than those for larger regions.

  5. Revisions

    Revisions to GDHI estimates in this statistical bulletin cover the period 1997 to 2009. No revisions will be applicable in areas affected by the NUTS geographical changes (see background note 1) because the areas are not directly comparable.

    Very few statistical revisions arise as a result of errors in the popular sense of the word. All estimates, by definition, are subject to statistical error but in this context the word refers to the uncertainty in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques or the incorporation of new information which allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable errors such as human or system errors and such mistakes are made clear when they are discovered and corrected.

    The main reasons for updates since the March 2011 publication are revisions to the national estimates for the UK (National Accounts Blue Book 2011) and updates to source data. Revisions to the total GDHI estimates for 2008 and 2009 are shown below:

    Percentage revisions to workplace-based headline GVA in 2009 and 2008 by NUTS1 region

    Per cent
    2009 Total revision Revision due to national estimates Other revision
    UK -0.6 -0.6 0.0
    North East -0.4 -0.1 -0.3
    North West -0.5 -0.2 -0.3
    Yorkshire and The Humber -0.7 -0.3 -0.4
    East Midlands -0.9 -0.4 -0.5
    West Midlands -0.9 -0.4 -0.5
    East of England 0.0 -0.6 0.6
    London -0.3 -1.3 1.0
    South East -1.0 -0.7 -0.3
    South West 0.1 -0.5 0.6
    Wales -1.1 -0.2 -0.9
    Scotland -0.3 -0.4 0.0
    Northern Ireland -2.0 -0.6 -1.4
           
    2008 Total revision Revision due to national estimates Other revision
    UK -0.5 -0.5 0.0
    North East -0.5 -0.3 -0.3
    North West -0.5 -0.3 -0.2
    Yorkshire and The Humber -0.6 -0.3 -0.3
    East Midlands -0.7 -0.4 -0.4
    West Midlands -0.7 -0.4 -0.3
    East of England -0.1 -0.5 0.3
    London -0.3 -0.9 0.6
    South East -0.7 -0.6 -0.1
    South West 0.0 -0.4 0.4
    Wales -0.9 -0.3 -0.6
    Scotland -0.4 -0.4 0.0
    Northern Ireland -1.0 -0.2 -0.7

    Table source: Office for National Statistics

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Statistical contacts

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Trevor Fenton +44 (0)1633 456083 Regional Accounts, Office for National Statistics trevor.fenton@ons.gsi.gov.uk
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