Building back better: How to recover from Covid-19

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.

Report published on 22 March 2021 by Kathrin Enenkel and Tom Sells

Covid-19 has caused significant economic damage. It has triggered the deepest recession on record in the UK and brought the jobs miracle to a halt by increasing the number of unemployed people by 1.3 million up to November 2020.

The jobs miracle refers to the period from 2013 to 2019 which saw the creation of more than 2.7 million net new private sector posts, of which 63.9 per cent were generated within UK cities.

In partnership with HSBC UK, the report examines this period of recent history to see what it tells us about how new jobs are likely to be generated post-pandemic, and to guide us on what types of new jobs they will be.

It examines:

The seven-year jobs miracle

During this period, 19.3 million positions were created to generate 2.7 million net private sector roles. If this pattern persists post-pandemic, an estimated 9.4 million jobs will need to be created across the UK to get 1.3 million people back into work.

The UK’s productivity puzzle

The Government’s goals of building back better cannot just focus on jobs. The UK’s recent ‘productivity puzzle’, in part caused by underperforming cities in the Greater South East, must urgently be addressed if the national economy is to see faster productivity growth in the 2020s than it did in the 2010s.

What the Government must do to build back better

  • Encourage a new wave of job creation to offset the 1.3 million posts lost as a result of Covid-19
  • Tackle the productivity malaise that has affected numerous strong cities and towns located in the Greater South East
  • Address the longer-term productivity challenges of cities and large towns further north that define the levelling-up agenda

The Chancellor’s March budget outlined important measures to protect jobs from the direct impact of the pandemic. Now, steps need to be taken in line with the recovery phase.

This report outlines nine policy recommendations for this to be achieved which broadly cover; support to create jobs, including support for high street businesses and the hospitality sector; targeted support to boost productivity across UK towns and large cities; and institutional reform to empower local government, through reorganisation and devolution, to level up to London powers.

We would like to thank HSBC UK for the support that has made this research possible.