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Within: Employment and Economic Activity

Related to: House Prices and Tenure, Socio-economic Inequality, Fuel Poverty, Out of Work Benefits, Food Poverty

Key Facts

  • Despite a range of excellent outcomes,  Bath and Naffordibility_challangeorth East Somerset is one of the more expensive places to live in the country
  • This creates a potential cost of living challenge, as residential wages are below the national average.

Affordability in context

The key cities network provides a means to compare Bath and North East Somerset with some of the other smaller and medium sized Cities and city regions. By comparing metrics with these cities it is possible to demonstrate an affordability challenge for the local area in the context of excellent health and Wellbeing outcomes for the area 1

 

Minimum income Standards

The Joseph Rowntree Foundation have conducted research on minimum income standards for the UK2. Between 2008 and 2013 this has increased by 25%. Based on this analysis a wage of £8.62 an hour is needed for a single person and £9.91 an hour each for a couple with dependent children.

Based on 2012 residental wages and current benefit levels then it is possible to calculate that  

Over 10% don't earn enough for a single person and over 20% don't earn enough for a couple or family

Which is between 21,000 and 36,000 residents3

National Cost of living context (consumer price inflation) 4

Annual inflation was on an upward trend from January 2004 to March 2007. Inflation was 1.4% in January 2004, and the rate had doubled to 3.1% by March 2007. Yet inflationary pressures continued to increase with the rate reaching 5.2% in September 2008. Even though the inflation rate fell over the next 12 months, the rate began to increase once again until the end of 2011. More recently, inflation has been on a downward trend and was 1.9% in January 2014.

  • Housing & household services, such as rent and utility bills, usually make a big (if not the biggest) contribution to inflation in most years.

  • Transport, which includes the cost of private vehicle ownership and use of public transport, also makes a regular big contribution to inflation, most notably in 2010 and 2011.

  • Food & non-alcoholic beverages (i.e. all food types plus soft and caffeinated drinks) has been among the three biggest contributors to inflation from 2007 onwards whereas restaurants & hotels no longer appears in the top three from 2010 onwards.

Wage Levels and Cost of Accommodation

In 2012 average workplace earnings for Bath and North East Somerset were £385per week and residential earnings were £392 per week 5. Both are below average for Unitary Authority areas in England. The disparity in wage levels suggests a notable degree of commuting takes place in the area which can also contribute to travel cost demands.

This can be considered alongside evidence of existing high levels of house prices and high levels of rent (15th highest rents outside London for English Housing Market Areas 6

Household Income after housing costs 7

Figure 1: NET household income (£) after housing costs (equivalised) by local middle super output areas

Click here for larger image

Figure 1 demonstrates the comparative differences in weekly household NET income, after housing costs. It highlights comparatively lower levels of NET income in South Bath, South Keynsham and parts of the Somer Valler (MSN and Radstock).

Note: This measure is the sum of the NET income of every member of a household. It calculates income after NI, council tax, pensions, rent, mortgages and other housing costs. For further details of the methodology see the ONS release notes

Personal Debt

Most major financial lending organisations have started to publish data to a postcode sector (e.g. BA1 1) level of unsecured personal loans.8. Postcode sectors contained within Bath and North East Somerset had at Q3 (Oct-Dec) 13/14 unsecured loans to the value of over £78 million (As postcode sectors do not fit exactly to local authority areas, this number is likely to be an overestimation).

Levels of borrowing were at just under £1000 per household across the district with significant variation by postcode sector (table 1) 

Area

Aggregate

Households

PerHhld

BA1 1

£440,158.93

931

£472.78

BA1 2

£1,974,017.43

3586

£550.48

BA1 3

£2,583,511.81

3121

£827.78

BA1 4

£2,333,664.04

2307

£1,011.56

BA1 5

£1,958,241.49

2146

£912.51

BA1 6

£2,990,446.13

3864

£773.92

BA1 7

£2,788,622.30

2340

£1,191.72

BA1 8

£369,506.98

373

£990.64

BA1 9

£540,763.47

98

£5,517.99

BA2 0

£2,087,686.67

1953

£1,068.96

BA2 1

£4,234,948.97

5346

£792.17

BA2 2

£4,224,683.94

4365

£967.85

BA2 3

£2,258,117.27

3284

£687.61

BA2 4

£1,791,573.11

2710

£661.10

BA2 5

£2,309,467.26

3102

£744.51

BA2 6

£2,168,679.07

2866

£756.69

BA2 7

£1,978,104.10

2063

£958.85

BA2 8

£4,160,471.62

3118

£1,334.34

BA2 9

£829,659.98

649

£1,278.37

BA3 2

£4,722,013.56

4125

£1,144.73

BA3 3

£4,828,809.72

4192

£1,151.91

BA3 4

£3,265,161.86

2840

£1,149.70

BA3 5

£3,413,368.32

2834

£1,204.43

BS31 1

£2,786,592.22

3378

£824.92

BS31 2

£3,531,415.03

3546

£995.89

BS31 3

£1,545,245.37

1680

£919.79

BS39 4

£1,031,899.56

991

£1,041.27

BS39 5

£1,867,362.82

1763

£1,059.20

BS39 6

£1,152,279.74

1186

£971.57

BS39 7

£2,476,198.76

2185

£1,133.27

BS40 5

£1,779,994.61

1858

£958.02

BS40 6

£1,213,370.04

920

£1,318.88

BS40 7

£965,369.97

679

£1,421.75

BS40 8

£1,370,756.70

1552

£883.22

BS41 8

£524,513.41

326

£1,608.94

Table 1 - Unsecured personal loans by postcode sector, total amount and average amount per household, B&NES postcodes.

Per capita, the BA1 9 postcode sector had a balance of £2,311, making it the highest per capita rate in the country. This postcode sector is in the Bathavon North area and contains a relatively small number of properties in villages to the north west of the City of Bath.