Vibrant economy index

Building the Vibrant Economy Index

Our ambition is to create the 'gold standard' measurement for the UK economy which benefits all parts of society. The methodology is transparent and we welcome constructive comments on how to improve it.

The Vibrant Economy Index ranks the 324 English local authority areas according to their average score across six different categories (baskets) that we believe are required to create a vibrant economy.

Each basket is effectively an index in its own right, based on a set of specifically selected economic, social or environment data sets (indicators) that are nationally available and aims to answer a specific question:

  1. Prosperity – are we producing wealth and creating jobs?
  2. Dynamism and opportunity – are we developing an entrepreneurial and innovative culture to drive future growth?
  3. Inclusion and equality – is everyone benefiting from economic growth?
  4. Health, wellbeing and happiness – are our people living healthy, active and fulfilling lifestyles?
  5. Resilience and sustainability – is our economy having a negative impact on the natural environment?
  6. Community, trust and belonging – are we embracing the community, and living lively and creative cultural lives?

Technical method
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What our Vibrant Economy Index measures

Prosperity

What does a Vibrant Economy look like?
What does a Vibrant Economy look like?

We have an economy that is producing wealth and creating jobs.
 

What does a Vibrant Economy measure?
What does a Vibrant Economy measure?
  • Total GVA (£m)
  • GVA per job (£000)
  • Mean workplace weekly pay (£)
  • Knowledge-driven employment (%)
  • Businesses turning over >£1 million (%)
  • Businesses turning over >£100 million (%)
  • Foreign owned businesses (%)

Dynamism and Opportunity

What does a Vibrant Economy look like?

Our economy is entrepreneurial and innovative, with a skill sets that can drive future growth.

What does a Vibrant Economy measure?
  • Business formation rate (%)
  • High level skills (%)
  • Knowledge workers  (%)
  • Patents granted (per 100,000 pop)
  • GCSEs A*-C achieved (%)
  • Higher education employment (%)
  • R&D employment (%)

Inclusion and equality

What does a Vibrant Economy look like?

Everyone benefits from economic growth. The gap between richest and poorest narrows, regional disparities reduce, and there are opportunities for all.

What does a Vibrant Economy measure?
  • Deprivation (score)
  • Inequality (score)
  • Average income (£)
  • Child poverty (score)
  • Housing affordability (score)
  • Employment rate (%)
  • Benefit claimant rate (%)
  • Homeless households (per 000 households)
  • NEETs (%)
  • Housing benefit claimant rate (% of all households)
  • Long-term unemployment (%)
  • Fuel poor households (%)
  • Unemployed inequality (ethnicity)

Health, well being and happiness

What does a Vibrant Economy look like?

People are healthy and active, leading fulfilling lives which provides individual prospects.

What does a Vibrant Economy measure?
  • Sports participation (adults) (%)
  • Adults overweight or obese (%)
  • Life satisfaction (score)
  • Life worthwhile (score)
  • Happiness (score)
  • Anxiety (score)
  • Diabetes prevalence (%)
  • Average life expectancy (yrs)
  • Child obesity (Year 6) (%)
  • Mean hours worked differential

Resilience and sustainability

What does a Vibrant Economy look like?

Our economy has a neutral impact on the natural environment and our built environments are resilient places we want to live in.

What does a Vibrant Economy measure?
  • Air quality (score)
  • Recycling rate (%)
  • Co2 emissions per capita (Kt Co2)
  • Energy consumption (GWh)
  • New residential addresses created in National Flood Zone (%)
  • Previously developed land usage (addresses per ha)
  • Dwellings completed (no.)
  • Households on LA waiting list (%)
  • Planning applications (no.)

Community, trust and belonging

What does a Vibrant Economy look like?

Vibrant communities have a lively and creative cultural life, and a clear identity that all its people are proud of. People feel safe, engage in community activities and trust the integrity of businesses and institutions.

What does a Vibrant Economy measure?
  • Community assets (per 1,000 pop)
  • Cultural amenities (per ha)
  • Living alone, aged over 50 and over (%)
  • Valid voter turnout (%)
  • Violent crimes (per 1,000 pop)
  • Ethnic diversity (score)

Selecting the indicators

The indicators, drawn from national available data sets, were proposed by our Place Analytics researchers and refined following discussions with the Vibrant Economy Commission, Grant Thornton UK people and feedback from the general public.

In some cases proxies have been created. For example, there is no measure for entrepreneurialism, so we've included 'business formation rates' and likewise for innovation so we have included 'patents granted' as the nearest closest measure.

In a few cases we've used proprietary tools and algorithms to combine data sets to provide a proxy. An example would be our ‘affordability score’, which is based on a ratio of annual house prices to resident earnings.

There are things that we would like to measure, but can't, because either the data sets are not collected (for example local volunteering levels), or they're not collected consistently across all local authorities for example community engagement.

Normalising the data

Once selected, each indicator value was normalised to adjust the values measured on different scales to a notionally common scale and indicators that would have a negative impact on an area – such as the unemployment rate, mortality rate, or air pollution – were given an inverse score. 

As in the usual construction of index building, a benchmarking principle was used. Each score was transformed to benchmark itself against a national average of 100 (for any indicator) and standard deviation of five.

A mean score for each basket was created. 

Calculating the Vibrant Economy Index

The Vibrant Economy Index is calculated as the arithmetic average of all six scaled basket scores

Get involved

Our ambition is to create a ‘gold standard’ measurement for the UK economy which benefits all parts of society. As part of this we will be developing the index to include Scotland and Wales. We will also be seeking contributions from individuals, academics, business, the third sector and public sector.

If you have comments, please let us know.