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On Monday, Centre for Cities published a briefing on the economic impact of Covid-19 on the UK’s biggest cities outside of London – the Core Cities. It shows that their city centres have been particularly affected by Covid-19, and policies aimed to kickstart an economic recovery should include policies to get their centres working again, in terms of public transport and air quality, commercial property, and investment in skills.
The Core Cities – composed of Belfast, Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield – are the largest city economies outside of London, and therefore play key roles in the national economy. However, they also face serious economic and social challenges, and did so before the pandemic. Levelling up won’t be achieved without addressing the relative underperformance of these big cities, and closing the output gap of the eight largest cities would add £47.4 billion to the economy every year.
That said, the economic shock of Covid-19 on the Core Cities’ labour markets was less dramatic than other parts of the country. Figure 1 shows that while the Core Cities accounted for 25 per cent of unemployed workers before the pandemic, they accounted for 22 per cent in October, and 16 per cent of the “furloughed” workforce under the Job Retention Scheme (JRS).
Figure 1: The Core Cities accounted for a lower share of job losses than their prior share of the claimant count
However, where the Core Cities have seen a severe downturn is in city centre spending. Figure 2 demonstrates that while overall consumption in the largest cities recovered to pre-pandemic highs after the initial lockdown in March 2020, city centres remained particularly suppressed as shoppers in the suburbs switched to online or local shops in their neighbourhoods.
Figure 2: City centre spending is lagging other kinds of urban spending
This reflects a public aversion to larger city centres that has persisted throughout the pandemic, as the Centre for Cities High Street Recovery Tracker has shown. Figure 3 demonstrates that while smaller and medium size cites saw a nearly complete recovery in city centre footfall by September and October last year, larger cities only saw a recovery to half of pre-pandemic levels, and London to only a third.
While working from home has allowed many Core City office workers to safely stay in employment over the past year, it has also meant that the spending which supports larger city centre workers in local services such as restaurants, shops, and bars has temporarily vanished.
Figure 3: Footfall within UK city centres has recovered least in the largest cities and London
Note: In this figure, Cardiff and Belfast are both classed as medium-sized cities due to the nature of raw data.
The strength of the Core Cities’ city centre economies is part of the reason why they have found working from home so viable – pre-pandemic they were home to many thousands of high-skilled service jobs that could most easily be done from home. Their recoveries will be determined in the main by how quickly these office workers return to the centre.
However, while public transport usage has fallen over the pandemic as commuting is down, car usage has shot back up to pre-pandemic levels, as people move about but avoid city centres. Unfortunately, Figure 4 shows that this rise has been so rapid that air pollution levels in many Core Cities now meets or exceeds its level in March 2020, despite a period of fresher air during the first lockdown.
Figure 4: Nitrogen dioxide levels have returned to pre-pandemic levels
Source: Defra, CREA, 2020. Note: The scales for each figure are different as cities went into lockdown with different baseline levels.
Note: Some data is missing for Liverpool due to a gap in data reported from monitoring stations.
The briefing proposes a mix of policies to reboot the Core Cities’ city centres now that the Government has published its roadmap to reopening and established the Urban Centre Recovery Taskforce. These include:
Getting the Core Cities’ urban labour markets back to full strength is a crucial step for the Government as it seeks to both recover from the pandemic and achieve levelling up. Doing so matters not just for each local economy in the Core Cities, but the national economy too.
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