DUNDEE and Aberdeen residents have enjoyed the highest growth in disposable income compared with any other city in Britain, according to a new report.
Household disposable income, which is the money left to spend after taxes and mortgages or rent, rose by 18 per cent in Dundee and 16 per cent in Aberdeen compared with the national average of 12 per cent since 2006.
However, the report stated that as both cities benefited disproportionately from public-sector investment they could now be hit hard by cuts.
UHY Hacker Young, the national accountancy group, looked at the growth in average household disposable income in the UK’s top 40 largest towns and cities (by population size) between 1 January, 2006, and 31 December, 2010 – the latest available figures.
The top five towns in terms of growth in average household disposable income over the past five years were: Dundee, up 18 per cent from £12,649 to £14,925; Aberdeen, an increase of 16.1 per cent from £15,308 to £17,777; Blackpool, a 16 per cent increase from £10,826 to £12,553; Birkenhead, up 15.8 per cent from £13,338 to £15,444; and Plymouth, up 15 per cent from £11,603 to £13,338.
As a whole, the UK’s average household disposable income only grew by 12 per cent over the same period, from £14,027 to £15,727.
Marc Waterman, partner at UHY Hacker Young, said: “As a major global energy hub, Aberdeen is the boom town that has become a powerhouse driving the Scottish economy. It has been completely transformed since the 1990s. There is an enormous amount of wealth in the city now, with plenty of millionaires who have built oil services companies from the ground up.”
He added: “Oil prices recovered very quickly from their blip during the financial crisis and have been more or less consistently above the $100-per-barrel mark since early 2011.
“Aberdeen has shrugged off additional North Sea oil taxes and continues to go from strength to strength.”
UHY Hacker Young said that Dundee’s position as the fastest- growing city for disposable income was driven by public-sector investment and warned that public-sector cuts would take a heavy toll on disposable income in some of the places that have seen the biggest growth.
Mr Waterman said: “Combining the public-sector-driven growth in Dundee and the oil-wealth in Aberdeen, the north-east of Scotland has outperformed the rest of the UK in terms of growth in disposable income.”