Keywords: new regionalism, spatial productivity measures, UK regional GVA per head, UK regional gross value added, UK regional policy, UK regional productivity variations, United Kingdom, regional economics, economic performance, economic growth
The diagnosis and treatment of disparities in United Kingdom regional economic performance: a critique
Regional policy has taken the centre stage in delivering current UK government efforts to promote productivity-driven economic growth. This article considers the validity of the prime indicator being used to assess regional economic performance: gross value added (GVA) per head. Evidence indicates that spatial variations in GVA per head across UK regions are not declining. It also indicates that these variations are composed of a mixture of factors, many of which are unrelated to productivity. Since the model of economic growth presented by the UK Treasury is predicated on a belief that a narrowing of regional variations in GVA per head will boost overall UK economic performance via its effects on productivity, these findings offer cause for concern. They suggest that one of the key elements in the UK government's approach to local and regional economic development is founded on a shaky statistical interpretation of the data.