Northern cities and towns face a debt ‘avalanche’ as Government Covid support ends

New research from Centre for Cities in partnership with Clarion Housing Group challenges the idea that people’s finances have benefited from lockdown.

Press release published on 23 June 2021

Approaching crisis risks derailing the Government’s levelling up agenda

  • Hull, Bradford, and Liverpool are Covid debt hotspots
  • People in eight in 10 neighbourhoods in Exeter and York likely to have saved money
  • Calls to extend furlough, and other support measures

People in many parts of Northern England and the Midlands face an ‘avalanche’ of debt as Covid-support is phased out this summer, according to new research from Centre for Cities think tank in partnership with Clarion Housing Group, that challenges the idea that people’s finances have benefited from lockdown.

They warn that the Government’s roadmap for withdrawing Covid support will hit people in the North and Midlands disproportionately hard and, in a blow to the levelling up agenda, risks leaving the UK more divided than ever. Division between homeowners and people in social housing are also likely to increase, with social housing residents and people on low incomes far more likely to have fallen into debt during the pandemic.

During the pandemic people in richer neighbourhoods in predominantly southern cities cut down on luxuries and reduced their outgoings more than people in poorer neighbourhoods in – mostly northern – cities who spend proportionally more on food, bills and other essentials. As a result, for every £1 that people from less affluent areas saved, people in richer areas saved £12.

Because of this, people in around half of neighbourhoods in Hull, Bradford, and Liverpool are likely to have been pushed into debt trying to meet the cost of essentials due to pandemic job losses, furlough and a lack of savings.

On the other hand, cutting non-essential spending has helped people in wealthier places save money. People in Exeter and York are the biggest financial beneficiaries of lockdown, with those living in eight in ten neighbourhoods being more likely than not to have boosted their savings.

Four of the five cities where people are most likely to have saved money during the pandemic are in Southern England while the top five places where people are most likely to have fallen into debt are in Northern England – three in the Red Wall.

Comparing debt and savings during the pandemic

Cities where people are most likely to have saved money Cities where people are most likely to have fallen into debt
Rank City Share of neighbourhoods where people are likely to have saved money (%) Rank City Share of neighbourhoods where people are likely to have got into debt (%)
1 Exeter 80 1 Hull 56
2 York 79 2 Bradford 54
3 Aldershot 67 3 Liverpool 47
4 Reading 66 4 Blackburn 44
5 Norwich 66 5 Burnley 44


Pockets of southern England are also struggling, particularly London and cities reliant on the aviation sector such as Slough, Luton and Crawley where people in both richer and poorer neighbourhoods have seen their financial situation worsen in the last year.

So far people have been shielded from the worst economic effects of this debt crisis by furlough, eviction bans and delays in the court system. But the problem will come to a head later this year when most Government support is withdrawn and the courts clear their case backlog.

The Government needs to get ahead of this problem and unveil a package of support for people facing financial hardship due to Covid-19. It should:

  • Create a specialist debt relief scheme for people who have incurred Covid-related debt. This debt should also not affect people’s credit scores.
  • Keep the £20 Universal Credit uplift. This will support local economies by keeping money circulating. Research shows this measure would also be popular with the public.*
  • Retain the Job Retention Scheme for sectors that still cannot operate at full capacity such as travel and aviation. This will be essential in supporting people in places such as Crawley, Luton and Slough where the local economy depends on their airports.

A failure to introduce further support measures will worsen the North-South divide and set back the Government’s levelling up agenda.

Centre for Cities’ Chief Executive, Andrew Carter, said:

“The pandemic has left this country more divided than ever. While people in mostly prosperous southern cities and towns have accumulated £150 billion of savings, many less affluent people in the North and Midlands will face an avalanche of debt as Government support ends later this year.

“The Government is withdrawing financial support far too quickly for people in places that have been hit hard by the pandemic. Not only will this set its levelling up agenda back significantly, it also risks levelling down many previously affluent parts of southern England such as Crawley.

David Orr, Chair of the Clarion Housing Association Board, said:

“This research confirms that existing inequalities have deepened as a result of the pandemic. Many social housing residents were already in a precarious financial situation before the pandemic and are likely to have been disproportionately affected.

“As the largest social landlord in the country we do a significant amount of work to support our residents, but this needs to be complemented by government action. To ensure a fair and equitable recovery our residents need extra support to get back on their feet and a permanent £20 uplift in Universal Credit would make a significant difference to those in greatest need.”


Notes to editors

*Going with The Grain: How to Increase Social Security with Public Support, Fabian Society, May 2021

About Centre for Cities

Centre for Cities is a research and policy institute, dedicated to improving the economic success of UK cities. We are a charity that works with cities, business and Whitehall to develop and implement policy that supports the performance of urban economies. We do this through impartial research and knowledge exchange.

About Clarion Housing Group

Clarion Housing Group is the UK’s largest provider of affordable housing. We are committed to playing our part in tackling the housing crisis, both as a social landlord and developer of new housing.

More than 350,000 people call a Clarion home their home. Our mission is to provide and maintain good quality housing for our residents and to build communities through high quality design and placemaking.

We are a social business, reinvesting our profits into building new homes and providing support and opportunities to our residents through Clarion Futures, our charitable foundation. For more information about Clarion Housing Group contact Lucy Pond, senior communications manage: 0207 378 5555 /

More on these issues