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PSA 7. Improve the economic performance of all English regions and reduce the gap in economic growth rates between regions

Vision

The Government's central economic objective is to raise the rate of sustainable growth and achieve rising prosperity and a better quality of life, with economic and employment opportunities for all. Unfulfilled economic potential must be released to increase the long-term growth rate of the UK. The Government's vision is that every region in England should perform to its full potential and become more competitive in an increasingly global economy.

The Government's vision for employment, skills, enterprise and innovation, where the evidence of persistent regional gaps is clearest, is to achieve the greatest improvements in the regions that are currently underperforming. More specifically the Government's vision includes:

Increased employment in all regions, with more economically inactive people helped and encouraged to find sustained employment
Demonstrable improvements in productivity in all regions, and narrowing the gap in productivity between the regions
A skills supply more responsive to employers and a greater understanding of the value of skills among business, leading to more business investment
A world-class knowledge base in all regions, with good quality business knowledge links, resulting in innovative, globally competitive businesses
More businesses starting, which are able to succeed and grow in all regions
More attractive places to live and work in all regions
Addressing the challenges and opportunities of climate change, ensuring regional economies successfully adjust to a low carbon, low waste economy

Measurement

To monitor the Government's progress in delivering this PSA, a set of four indicators will be adopted that together provide a coherent picture of regional economic performance.

Indicator 1 - Regional Gross Value Added (GVA) per head growth rates
Indicator 2 - Regional Gross Domestic Product (GDP) per head levels indexed to the EU15 average
Indicator 3 - Regional productivity as measured by GVA per hour worked indices
Indicator 4 - Regional employment rates

Target by 2011

The target levels for each indicator have been set as follows:

Indicator 1 - +0.1 per cent in average per annum growth rate for baseline period compared to reporting period.
Indicator 2 - +0.1 per cent in the index for outturn years, compared with the baseline year.
Indicator 3 - Movement greater than the average confidence interval (0.5% - 0.8% in 2006), for the average employment rate in the reporting period.
Indicator 4 - +0.1 per cent in average per annum growth rate for the reporting period compared with the baseline period.