Definitions ANNEX 1

1. Gross Value Added and Household Disposable Income per Head

Gross Value Added (GVA)

The estimates published here have been calculated on the basis of the European System of Accounts 1995 (ESA95). Under this system the term Gross Value Added is used to denote estimates that were termed as Gross Domestic Product (GDP) at basic prices in previous publications. The GVA estimates included incorporate revisions from previous releases and for all years back to 1989. In addition, the three years 1997 to 1999 are provisional estimates and, as such, may be subject to further revision.

These revisions are described in 'Regional Accounts 1999: Part 1' by Alex Clifton-Fearnside in Economic Trends No 568, The Stationery Office, March 2001.

The Regional Competitiveness Indicators now contain two separate indicators of economic activity which fall within the broad definition of �GVA�. The data termed �Gross Domestic Product� (GDP) in previous publications are taken from the regional economic accounts, produced by ONS, which are calculated based on a series of economic and labour market surveys. The second set of GVA data which appear in Table 4(b) are based on a single survey: The Annual Census of Production/Annual Business Inquiry (ACOP/ABI).

The GVA estimates taken from the regional economic accounts are a much broader measure of a region's economic activity than the ACOP/ABI GVA series. In addition, GVA from regional economic accounts is consistent with the latest annual estimates published in the UK National economic accounts and latest European accounting framework.

Gross Household Disposable Income (HDI)

The Household Sector includes traditional households within the UK in addition to people living in institutions such as retirement homes, hospitals and prisons. This sector also includes the activity of the non-profit making organisations which provide a service to households, for example charities and most universities.

Disposable Household Sector income is defined as total household income less payments of current taxes on income and wealth (such as income and property taxes) and social contributions such as pension and National Insurance contributions. The HDI series is compiled under the latest ESA95 framework. The latest set of Household Sector income estimates included in this release incorporate some further revisions to both the national and regional totals arising for the continual improvement of ONS methods. See 'Regional Accounts 1999: Part 2', Alex Clifton-Fearnside, Economic Trends No 573, The Stationery Office, August 2001.

2. Labour Productivity in Manufacturing and Other Industries

This is calculated by dividing residence based GVA for, by the number of employees within each of these sectors. Estimates of employment in the manufacturing and other sectors are taken from the new Annual Business Inquiry (ABI) employee jobs series whilst the estimates of GVA are drawn from the regional economic accounts produced by the ONS.

The count of employees includes both full and part - time employees within each sector. Temporary employees working during the survey period are included in the estimates. The figures do not include the agriculture, forestry and fishing sectors.

The GVA estimates are residence-based and differ from the estimates included in Indicator 1 as the earnings of employees who commute across regions to work are allocated to the region where they live and not where they work. In practice, residence and workplace based GVA differ only in London, the South East, and the East of England.

Residence - based GVA from the regional economic accounts have the advantage of providing estimates for a range of industries and for a longer time series than the equivalent ABI estimates at the moment. However, the figures contained in Tables 2 (a) and 2 (b) were calculated using a workplace-based measure of employee jobs (see Section 7 for details). Using residence based GVA and workplace based employee jobs means that the estimates for regions with high levels of in commuting, such as London, may be deflated, whilst in areas with net out-commuting such as the East of England, the figure could be overstated slightly.

3. Proportion of Income Support Claimants

Income support claimants can be grouped into elderly, lone parents, disabled and other. Income support can be paid to a person who is aged 16 or over, is not working 16 hours or more a week and also whose income is lower than what is considered necessary to live on.

4. Manufacturing Investment and Output by UK and Foreign-Owned Companies

Net Capital Expenditure is calculated by adding to the value of new building work acquisitions less disposals of land and existing buildings, vehicles and plant and machinery.

At the present time the latest available data refer to 1997.  With the launch of the new Annual Business Inquiry (ABI) in April 2001 (see James Partington, 'The Launch of the Annual Business Inquiry', Labour Market Trends, Vol 109, No 5, Stationery Office, May 2001), it is expected that it may now be possible to update some of these data in the near future.  At the moment, however, regional ABI investment data are still being quality assured by the ONS.

The current data is for manufacturing only. In the future it is expected that information covering the services sector will become available, again from the Annual Business Inquiry

5. Exports of Goods

Regional trade statistics were created to meet the needs of the devolved administrations of Scotland, Wales and Northern Ireland, as well as the nine Government Office Regions and Regional Development Agencies in England. HM Customs and Excise published them for the first time in January 2000 with details of regional exports of goods introduced in February 2000.

Trade data are taken from Customs declarations submitted in respect of trade with countries outside the European Union and Supplementary Declarations submitted under the �Intrastat� system for trade with countries in the EU. Trade is allocated to a region through the postcode associated with a company�s VAT registration. Some adjustments have been necessary, for exports to the EU; to ensure that manufacturing that takes place at branch premises is properly allocated to the region where the branch is situated. Exports to countries outside the EU already contain a regional coding.

The quarterly totals of the value of Regional Trade in Goods Statistics do not equate to the totals already published as the UK-wide Overseas Trade Statistics. Certain goods, such as North Sea crude oil, ships and aircraft stores, and those not in free circulation, that are shipped to EU countries using traditional Customs declarations, cannot be allocated to a UK region. Exports relating to overseas companies, registered for VAT in the UK, but with no place of business in the UK have been excluded. Also trade below the �Intrastat� reporting threshold cannot be allocated to a region. In addition, some exports to countries outside the EU cannot be allocated to a region because the VAT registration numbers have not been properly declared.

These statistics refer to goods that have crossed the UK frontier. Customs and Excise do not receive information in respect of goods that move wholly within the UK.

Exports of goods by employee job are a DTI estimate using Customs and Excise data for value of exports of goods and employee jobs as a denominator. The employee jobs data were drawn from the workplace - based Short - Term Employment Survey (STES) produced by the Office for National Statistics.

It should be noted that the STES series was revised by ONS when the ABI employee jobs series was introduced in April 2001. Because of this the estimates provided in Chart 5(b) and in Table 5(a) are not directly comparable with those published previously.

6. Average Earnings

Estimates of average earnings are drawn from the New Earnings Survey and include remuneration for overtime worked during the survey period, but not other payments such as profit shares and annual bonuses.

7. Employment and Employee Jobs

Tables 7(a) and 7(b) cover the number and percentage of people in employment who are resident in each region or country. The data contained in both tables are drawn from the Labour Force Survey and are seasonally adjusted.

Table 7(c) shows the number and percentage of employee jobs on a workplace basis, i.e., where jobs are counted at the place of work, rather than where the employee lives. The data are provided by the STES, which measures the number of employee jobs within each region (not including self�employment), by quarter.

The STES series is now benchmarked to the ABI employee jobs series introduced by the ONS on the 11th April 2001. These data supersede the Annual Employment Survey (AES) estimates in England, Scotland and Wales but not Northern Ireland. For an account see Partington (op cit.).

It is important to note that revisions to the AES series and introduction of ABI employee jobs are not yet reflected in either national or regional GVA and Household Sector income totals. The ABI/AES revisions will be included in these series from 2002 onwards.

8. Unemployment Including Long-term Rates

The ILO definition of unemployment includes as unemployed all those who are out of work, want a job, have actively sought work in the last four weeks prior to interview and are available to start work within the next fortnight; or out of work and have accepted a job they are waiting to start in the next fortnight.

The claimant count is based on the number of people claiming unemployment related benefits before October 1996 and the Jobseekers Allowance (JSA) thereafter at Employment Service offices on a particular day each month who were out of work, available for, capable of and actively seeking employment.

From April 1999 onwards, the long-term claimants series consists of computerised claims only, and excludes clerically processed claims that amount to less than 1 per cent of all claims.

9. National Learning Targets (England only)

There are five National Learning Targets for England, created by the former Department for Education and Employment and the National Advisory Council for Education and Training Targets. These aim that by 2002 (those used in these Indicators are in bold):

1. National Targets in Literacy and Numeracy

75% of 11 year-olds will reach at least level 4 in the Key Stage 2 Mathematics tests, and
80% of 11 year-olds will reach at least level 4 in the Key Stage 2 English test.

2. National Targets for 16 year-olds

50% of 16 year-olds will achieve 5 GCSEs at grades A* - C or equivalent, and
95% of 16 year-olds will achieve at least one GCSE grade A* - G or equivalent.

3. National Targets for Young People

85% of 19 year-olds will be qualified to at least NVQ level 2 or equivalent, and
60% of 21 year-olds will be qualified to at least NVQ level 3 or equivalent.

4. National Targets for Adults

28% of economically active adults will be qualified to at least NVQ level 4 or equivalent,
50% of economically active adults will be qualified to at least NVQ level 3 or equivalent, and
To reduce non-learners by 7%.

5. National Targets for Organisations

45% of organisations with 50 or more employees will be recognised as Investors in People, and
10,000 organisations with 10-49 employees will be recognised as Investors in People.

10. Investors in People

The baseline for calculating the proportion of organisations with IIP recognition was calculated by the former Training and Enterprise Councils (now Learning and Skills Partnerships) who estimated the number of organisations with 50 or more and 200 or more employees in their areas of coverage.

11. Business Registration and Survival Rates

VAT registrations are not synonymous with business start-ups; some registrations are the results of changes in ownership or legal status of a business. In Great Britain the total number of business start-ups is estimated to be around twice the number of registrations for VAT. It is estimated that between 1995 and 1999 there were around 530,000 businesses created.

New businesses with turnover below the VAT threshold (�53,000 during 2000) may decide not to register for VAT and so would not be included in these data.

The data are compiled from the Inter-Departmental Business Register (IDBR). The IDBR is a structured list of nearly 2 million units in the UK available for the selection, mailing and grossing of statistical inquiries. It is supplied by the ONS and is mainly used as a sampling frame for official business surveys.

The estimates refer to the location of the head office or main centre of business activity. If a new factory owned by a business is located elsewhere in the UK then it does not appear as a new registration.

The �survival� rates contained in the Table 11(b) are not �actual� business closures. Firms can be removed from the VAT register for a variety of reasons including: falling turnover, mergers, take - over and relocation in addition to the business actually ceasing trading. However registrations and deregistrations are a strong correlate of the underlying trends in business �births� and �deaths�.

12. High Technology Industry and R&D Activity

The survey of Business Enterprise Research and Development is conducted by the ONS annually. It is based on a sample of around 4,000 businesses across the UK who are known to perform research and development activity. This includes all of the �large� R&D performers, plus a sample of smaller businesses who are deemed as �likely� R&D performers. Government organisations, higher education establishments and registered charities are not included within the survey sample.

It is important to note that this survey assesses the value of R&D performed by businesses in the UK, irrespective of where the funding for the R&D activity came from (i.e. business, government or foreign funding). It also covers the R&D activity by UK firms on UK territory outside of the mainland (i.e. North Sea oil exploration).

The sample size and response rates (around 94% for the latest survey) are sufficient to allow dissemination of R&D activity within businesses down to regional and sectoral level. This source is included in the Regional Competitiveness indicators for the first time whilst ABI estimates of regional investment by firms are still undergoing quality assurance.

High Technology Industry Employee Jobs

These estimates are now drawn from the ABI/Revised AES employee jobs series, and Northern Ireland Census of Employment. The estimates for Great Britain are not comparable with estimates published in previous editions.

Estimates of high and medium high technology jobs for Northern Ireland are included in the Regional Competitiveness Indicators for the first time.

The definition of high technology industry itself is based on that specified by the OECD (1997).

The following table shows the sectors that are covered by the definition �high-tech� and �medium high-tech� and which Standard Industrial Classification 1992 (SIC92) class or sub � class corresponds to each.



High Tech



Office machinery and computers






Medium High Tech

Scientific Instruments


Motor Vehicles


Electrical Machinery



24.0 (excluding 24.4)

Other Transport Equipment

35.2, 35.4, 35.5

Non-Electrical Machinery


13. Transport

Chart 13(b) on the mode of transport used to travel to work is defined as follows:

Private - car, van, mini-bus, motorcycle.

Public - bus, coach, national rail and underground.

14. Industrial Property and Office Rental costs

Information is available for the following types of industrial property:

Type 1 - Small starter units, 25 sq.m - 75 sq.m. Steel framed, concrete block or brick construction, often built in terrace layout and let on weekly terms.

Type 2 - Nursery units, 150 sq.m - 200 sq.m. Steel framed on concrete base, concrete block or brickwork to 2 metres with metal PVC covered cladding above. Eaves height 3.75 to 4.5 metres with lined roof. Limited or no office content and common parking and loading areas.

Type 3 - Industrial / Warehouse units, circa 500 sq.m. Steel framed on concrete base, concrete block or brickwork to 2m, metal PVC covered cladding above. Eaves height 4.3-5.5m with lined roof. 10-15% office content. Detached on own site with private parking & loading facilities.

Type 4 - Industrial / Warehouse units, circa 1000 sq.m. Steel framed on concrete base, concrete block or brickwork to 2 m, metal PVC covered cladding above. Eaves height up to 7.6 metres with lined roof. 10-15% office content. Detached on own site with private parking & loading facilities.

Type 5 - Converted ex-mill units. Ground floor unit converted from 19th century multi - floor ex-mill or similar building of 4-5 storeys. Brick construction with tile/slate roof. Unit of circa 150 sq.m with heating from central piped water system. Electric goods lift to upper floors and sprinklers all levels. Tenant responsible for internal repairs and insurance. Type 5 found only in certain areas of the country.

Type 3 is used as the indicator.

Information is available on three types of Office accommodation:

Type 1 - Town Centre location. Self contained suite over 1,000 sq.m in office block erected in last 10 years, good standard of finish with a lift and good quality fittings to common parts. Limited car parking available.

Type 2 - As Type 1 but suite size in range of 150 sq.m - 400 sq.m.

Type 3 - Converted former house usually just off town centre. Good quality conversion of Georgian/Victorian or similar house of character. Best quality fittings throughout.

Self contained suite in size range 50 sq.m - 150 sq.m with central heating and limited car parking.

Type 1 is used as the indicator.

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