IMPROVEMENTS in Kent's economy have not kept pace with other South East hotspots, according to a new report.

The latest Kent Economic Report reveals that the county's so-called "mosaic economy" compares favourably with the national picture but "continues to fall short of the pace of growth and development set by the south east as a whole".

It raises the question as to how far the county should go in trying to catch up its regional rivals, warning that accelerated development, other than that already planned in the Thames Gateway and Ashford, could harm the Garden of England.

"Is it possible to promote faster growth and still achieve the aim of economic development without environmental damage?" it asks.

While business growth and creation is running at high levels - up nearly 10 per cent in the past decade - skill shortages remain below national benchmarks, the report says.

But it is a mixed picture across the county, with West Kent outperforming Great Britain and the South East.

There are also skills hotspots in East Kent like Canterbury - home to the University of Kent - and Sandwich, where the pharmaceutical company Pfizer is based.

Kent is 29th out of 53 British sub-regions, with a skills and qualifications score just below the national benchmark.

In 2002/3, 36 per cent of the working population in Kent was qualified at below NVQ2, compared with 31 per cent for the South East. Nearly 22 per cent of Kent's workforce was qualified at below NVQ 4-plus, compared with a South East rate of 27.7 per cent.

Around 21 per cent of people have a degree or degree equivalent, compared to 24 per cent nationally.

The Tunbridge Wells council area performs best, with Sevenoaks, Canterbury, Maidstone, Shepway and Ashford all above the national average.

But Gravesham, Dartford, Thanet, Medway, Dover, Swale and Tonbridge and Malling are below. As a whole, Kent and Medway fall below the regional average.

The report concludes: "There are enormous opportunities on the horizon for Kent and if these are to be realised, then it is essential the workforce be trained and developed to something nearer the South East's average standard."

Kent continues to have some of the poorest areas in the country, with an index of multiple deprivation showing Thanet, Swale and Shepway among the most deprived areas. Thanet has the worst score, ranked 85th out of 354 English local authorities.

Despite these reservations, the report shows more people are employed in Kent than ever before. The total rose by 10.8 per cent between 1998 and 2002, putting Kent in the nation's top six sub-regions.

And more knowledge sector jobs are being created, with numbers rising 19 per cent, faster than the 10.4 per cent national rate and the 13.2 per cent regional rate.

Cllr Alex King, Kent County Council's cabinet member for regeneration, said there was concern about skills and qualifications. And "disparities were still evident between the more prosperous and the disadvantaged part of Kent.

"We need to continue to mobilise our resources to ensure Kent's people, businesses and organisations are able to compete successfully for opportunities in both the traditional and the newer, knowledge-based activities."

Launching the report at County Hall, Maidstone, Leigh Herington, county planning officer, said Kent was "a mixed economy, a very diverse economy, a mosaic economy, a middling economy, a middle-ranking economy".

There were signs of a "growth spurt" and, in the words of an estate agent, claimed that the county had "location, location, location".