Data from this month's update shows a recovery in all cities and large towns, however, significant challenges remain for places.
The postponement of ‘Freedom Day’ by one month kept unexpected restrictions on the economy, and the labour market in particular. The latest statistics from HMRC show how places fared during this period and which cities and towns are still heavily reliant on the scheme – flagging the risks of phasing it out in September.
As of June 2021, 1.9 million people in the UK were still supported by the furlough scheme. That said, June’s data shows a continuation of the previous downward trend, with 580,000 people leaving furlough in a single month bringing it to its lowest level since the scheme began.
All British cities and large towns saw a fall in the number of people supported by the scheme and everywhere apart from Sunderland and Northampton hit their lowest take-up rate last month. This is an improvement on May, when there were still twenty places with a take-up rate above their 2020s minimums.
Despite the overall improvement in outlook for cities’ job markets, some places are still particularly reliant on furlough – namely those with big aviation sectors such as Crawley and Slough, where furlough rates are still in the double digits. They are likely to see a sharp increase in their unemployment rates if the existing government support terminates in September as expected.
Furlough take up rates in London also remained high in June, at 8.7 per cent. Other large cities such as Glasgow and Birmingham also had some of the highest take-ups, at 7.2 per cent for both . This is likely to be due to most office workers remaining at home. As the Centre for Cities recovery tracker suggests, this has negative consequences for the fortunes of local service businesses that previously catered to them, such as restaurants and coffee shops.
The furlough data also suggests that economic activity in tourist hotspots is picking-up, feeding through into job market. Blackpool and Bournemouth are no longer in the top ten places with the highest furlough rates. Those two places saw a sharp reduction in the number of people on the scheme, by 3 percentage points and 2.8 percentage points, respectively.
Nevertheless, the 6.8 per cent take up rate in these places is still relatively high when compared to other places such as Hull, Gloucester or Plymouth, where take up rates are less than 5 per cent (see Figure 1).
Figure 1: Furlough scheme take-up rate, June 2021 (%)
| Ranking | City / Town | Furlough scheme take-up rate, June 2021 (%) | Ranking | City / Town | Furlough scheme take-up rate, June 2021 (%) |
| 1 | Crawley | 11.2 | 54 | Ipswich | 4.9 |
| 2 | Slough | 10.3 | 55 | Barnsley | 4.9 |
| 3 | Luton | 9.6 | 56 | Stoke | 4.8 |
| 4 | London | 8.7 | 57 | Middlesbrough | 4.8 |
| 5 | Sunderland | 8.3 | 58 | Newport | 4.8 |
| 6 | Birmingham | 7.6 | 59 | Swindon | 4.7 |
| 7 | Leicester | 7.5 | 60 | Wakefield | 4.7 |
| 8 | Brighton | 7.5 | 61 | Gloucester | 4.7 |
| 9 | Glasgow | 7.2 | 62 | Hull | 4.5 |
| 10 | Edinburgh | 7.2 | 63 | Plymouth | 4.2 |
Source: HMRC, Coronavirus Job Retention Scheme statistics, June 2021
When comparing the data between the furlough scheme and the growth of job postings in June, Figure 2 shows that places are reacting differently to the gradual reopening of the economy. On the one hand some places, such as Hull and Barnsley have seen strong growth in job postings while the number of people still on the furlough scheme is relatively low. On the other hand, places with the most affected labour markets – such as Crawley or London – still have job postings below their February 2020 levels.
Figure 2: The relationship between take up of the furlough scheme and job postings
Source: HMRC, Coronavirus Job Retention Scheme statistics, Indeed.
This suggests that many cities and large towns in the UK are recovering from the pandemic-induced recession, and they are likely to continue improving now all restrictions are lifted. That said, there are several places where the jobs recovery is lagging even whilst the Coronavirus Job Retention Scheme tapers.
To avoid a sharp rise in unemployment in several cities and large towns as the furlough scheme ends in September, the Government should build a set of policies to protect workers in the sectors that are unlikely to recover quickly in the months ahead.
Centre for Cities tracks the latest unemployment claim statistics across the UK's cities and largest towns.
Just a year ago, Crawley was counted among the most economically successful cities and large towns in the country, but the collapse of the international travel industry has raised concerns about the town's future.
While retail and hospitality account for the largest shares of jobs on furlough across the country, the export base of some places has been particularly affected, raising concerns about their ability to bounce back.
This report examines the pattern of private sector growth within the UK’s seven-year jobs miracle to inform how new jobs can be created as the Government looks to ‘build back better’ and level up the country.
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