Methodology: additional Gross Value Added estimates in northern Growth Strategy: Case for change
Published 14 January 2026
Applies to England
© Crown copyright 2026
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Northern Growth Strategy: Case for change includes an illustrative estimate that increasing the Gross Value Added (GVA) per job filled in the 5 most populous northern Mayoral Strategic Authority (MSA) areas – Greater Manchester, Liverpool City Region, North East, South Yorkshire, and West Yorkshire – to the UK average could add around £40 billion in additional GVA per year and generate roughly £15 billion in additional tax revenue annually.
This analysis should be interpreted as illustrative, rather than as an estimate of the benefits associated with a specific investment or intervention, and includes several simplifying assumptions. It does not include any modelling of the wider macroeconomic effects that might accompany productivity growth. These estimates also assume any increase in GVA in the North is additive and does not displace economic activity elsewhere in the UK.
These estimates have been produced at MSA area level. As an alternative approach, we have also replicated the analysis using OECD Functional Urban Area (FUA) geographies to estimate the GVA uplift if we applied the same assumptions to the 5 most populous northern FUAs.
Estimate the GVA increase if each of the 5 most populous MSA areas in the North of England had UK average levels of productivity
ONS estimates for current price (smoothed) GVA per job filled at International Territorial Level 2 (ITL2) and productivity jobs have been used alongside ONS estimates of UK average productivity. Data from 2023 has been used as the most recently published year. These estimates are taken for the ITL2 areas corresponding to the 5 most populous MSA areas (based on 2024 ONS population estimates) in the North of England – Greater Manchester, Liverpool City Region, South Yorkshire, West Yorkshire and the North East.
The additional GVA of each MSA area is calculated by taking the difference in productivity (GVA per job filled) with the UK average and multiplying it by the number of jobs. The additional GVA MSA totals are then summed into a total across the 5 MSAs, totalling £39 billion (rounded to £40 billion) in additional GVA per year.
Applying the same calculation to OECD Functional Urban Area (FUA) geographies rather than MSAs provides an estimated £34 billion additional GVA per year.
Estimate the additional tax revenues from the GVA increase
To estimate a GDP increase from the ~£40 billion additional GVA, the percentage increase in GVA is assumed to lead to the same percentage increase in nominal Gross Domestic Product (GDP). This implies no inflationary impact. This uses the OBR’s December 2025 public finances databank 2023/24 estimates of nominal GDP and ratio of national account taxes to GDP.
The £15 billion additional tax revenues estimate is calculated by multiplying the increase in nominal GDP by the ratio of national account taxes to GDP (2023/24). This therefore assumes the additional GDP generated has the same composition as the wider economy, and therefore the same tax richness and does not assume there is an inflationary impact of any GDP increase.