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Business Intelligence

Luton Gross Disposable Household Income

June 2018

This information is issued by:

Business Intelligence, Luton Borough Council

You can contact us in the following ways:Edward.holmes@luton.gov.uk By telephone: +44 1582 54 7093

Visit our information observatory: Information Observatory Visit our Council website: www.luton.gov.uk

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Luton Gross Disposable Household Income

Gross Disposable Household Income (GDHI) is the amount of money that individuals have left to spend

after deductions such as taxation, property and social contributions. The Office for National Statistics

(ONS) published the latest GDHI (2016) for the regions and sub-regions of the UK in May 2018. These data

run from 1997-2016 and are not adjusted for inflation. All data in this report are from the Office for National

Statistics.

Luton’s GDHI increased by 4.2 per cent between 2015 and 2016

In 2016 Luton’s GDHI per head was £14,889, which increased by 3.1 per cent between 2015 and

2016.

Luton’s GDHI per head is 23 per cent lower than the UK average

Luton has the lowest GDHI per head of the local authorities of the East region

Luton is ranked 156th out of 173 local (NUTS) areas in the UK, this ranking has been falling as

Luton was ranked 135th in 2002

Luton’s household income has generally been falling in relation to the national average since 2002.

Kensington & Chelsea has the highest and Nottingham the lowest.

Luton’s wage level was falling in relation to the UK average with a rise in 2016.

Earnings from self-employment have risen in relation to the national average in recent years.

Table 1: Gross Disposable Household Income, Luton 2011-2016

2011 2012 2013 2014 2015 2016 2015-16 growth

GDHI (£ million) 2,623 2,746 2,819 2,940 3,086 3,215 4.2%

GDHI Per Head (£) 12,879 13,364 13,592 13,987 14,448 14,889 3.1% GDHI Per Head Index (UK=100) 77.5 77.0 75.9 76.3 74.8 76.6 2.4%

UK GDHI per Head 16,621 17,354 17,910 18,323 19,304 19,432 0.7%

Chart 1: Gross Disposable Per Head Index, Luton 2011-2016

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Table 2: Gross Disposable Household Income Per Head, Local Authorities, East Region 2010-2016 LBC

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The Office for National Statistics now publish GDHI data for local authority areas as well as NUTS regions.

Luton’s GDHI per head is the lowest in the East region at £14,889. St Albans have the highest GDHI per

head at £25,098.

Table 3 Luton in Comparison to the Top Ten Highest and Lowest Local Authorities by GDHI per

Head 1997 & 2016

Table 3 compares Luton in relation to the top 10 and lowest 10 local authorities for 1997 and 2016. Luton

was ranked 315th of 391 local authorities in the UK in 1997 and 363rd in 2016. The top 10 are dominated

by London and the south with the Kensington & Chelsea having the highest GDHI per head in both 1997

and 2016. GDHI per head for the City of London grew by 112 per cent between 1997 and 2016. Luton’s

growth was 61 per cent which was slower than the national rate of 80 per cent (these data are not adjusted

for inflation). The data shows that London had the fastest levels of growth and these figures indicate that

inequality is growing with substantially higher growth of GDHI in London and the South East.

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Regional GDHI NUTS Regions

Regional GDHI are also produced for the Nomenclature of Territorial Units for Statistics (NUTS) regions.

These are European area classifications. Luton is a NUTS3 region which is part of the NUTS2 region

Bedfordshire and Hertfordshire and part of the NUTS1 region East of England.

Chart 2: Luton in Comparison to the Highest and Lowest 10 NUTS Regions, GDHI per Head, 1997

Chart 3: Luton in Comparison to the Highest and Lowest 10 NUTS Regions, GDHI per Head, 2016

In 1997 Luton was ranked 132nd of 173 NUTS3 regions and in 2016 Luton was ranked 156th. Luton’s

GDHI per head index was 85.6 in 1997 and 76.6 in 2016 which indicates that average incomes in Luton

have fallen in relation to the national average. The areas with the highest incomes are in London and the

South East with the lowest in the midlands and the north. In 1997 Hackney and Newham had the lowest

average income but in 2016 Nottingham had the lowest average income. Average incomes have increased

in London with the highest income in Kensington & Chelsea index increasing from 255.4 in 1997 to 302.7 in

2016. The increase in GDHI per head indices in London indicates growing wealth and also increasing

income inequality in the UK.

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Luton’s GDHI Components

Table 4: Components of GDHI, Luton 2011-2016

Chart 4: Per Head Indices of Components of GDHI for Luton 1997-2016

Table 4 shows the components of GDHI. The largest component for Luton is ‘compensation of employees’

i.e. wages. The per head index in relation to the national average of compensation of employees has fallen

from 100.5 in 1997 to 81.0 in 2016 indicating that wage levels in Luton have been falling in relation to the

national average. Mixed Income which is earnings from self-employment per head index has increased in

recent years and the level of benefits received has remained stable. The GDHI component figures show

that income levels in relation to the national average have been falling in recent years driven by a fall in

wage levels. However there has been an increase in 2016.

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Methodology

Gross disposable household income (GDHI) is the amount of money that all of the individuals in the

household sector have available for spending or saving after they have paid direct and indirect taxes and

received any direct benefits. GDHI is a concept that is seen to reflect the “material welfare” of the

household sector.

The 2016 Regional and Sub Regional GDHI data was released in May 2018 by the Office for National

Statistics (ONS). These are the latest data available and include revisions to previous years. All estimates

in this release are in current price terms and have not been adjusted for inflation.

Data is available using the European Classification system called NUTS (Nomenclature of Units for

Territorial Statistics) to provide a breakdown of UK regions and countries, allowing a comparable view of

economic activity across the European Union. Luton is a NUTS3 region which is part of the NUTS2 region

Bedfordshire and Hertfordshire and part of the NUTS1 region East of England. In the latest publication

GDHI data are available from 1997 to 2016. GDHI is also published using local authority geography.

The full data-set and methodology can be found in the following link: GDHI

For further information on this topic, contact the Business Intelligence Team at:

Research.Intelligence@luton.gov.uk

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