The pandemic has made levelling up four times harder and it risks levelling down otherwise economically successful parts of the country as well.
When the Government was elected at the end of 2019 on a pledge to level up the country, little did we know it would have to spend most of 2020 firefighting an unprecedented health crisis.
Now, 10 months into the pandemic, the vaccine roll out offers hopes that in 2021 the Government will be able to focus again on its domestic agenda. But how have things changed in the meantime?
This is the question we focused on in this year’s Cities Outlook – our annual health check of the economic performance of the UK’s largest cities and towns. To do so, we used the claimant count rate to get a real time indication of the interaction between the health crisis and levelling up.
In less than a year, the pandemic has made levelling up four times harder. The unprecedented increase in the number of people claiming unemployment related benefits since March 2020 means that the number of people that now need to find or improve their job situation to level up the North and Midlands has increased four-fold. Birmingham, Hull and Blackpool in particular are the places with the biggest levelling-up challenges.
But alongside that, Covid-19 has also created a new challenge: the pandemic risks levelling down parts of the country that were economically strong before the pandemic. While the levelling-up challenge is mostly concentrated in the North and Midlands, almost half (43 per cent) of the people who have started to claim unemployment related benefits since the beginning of the pandemic are in economically successful areas further South. And London, alongside its neighbouring towns Crawley, Luton and Slough, feature among the hardest hit economies by Covid-19.
The interaction of these two challenges means that the likelihood of bouncing back in coming years varies a great deal between one place and another. Based on this, the largest cities and towns can be grouped in one of these four categories (see a full list in the table below):
In order to tackle these challenges, they need to be seen as separate. For most places, continuing existing government support until social distancing measures are lifted, combined with a permanent £20 per week increase in Universal Credit will help to shelter them from the ongoing impacts of covid and give them the best chance of bouncing back.
But for many, particularly those in the North and Midlands, bouncing back to where they were in March 2020 will return them back to a position of poor performance. For this to change requires the Government to implement its much vaunted levelling-up agenda, tackling skills, local transport and devolution challenges.
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