Levelling up: here's why Covid has made the task four times harder for Boris Johnson's government

The coronavirus pandemic has made the task of levelling up the UK’s regions four times harder than it was before.

That’s according to analysis by Centre for Cities, an independent think tank dedicated to promoting the economies of the nation’s largest cities and towns – especially those outside the South East of England.

It follows a doubling in the number of people claiming unemployment-related benefits across the nation.

The coronavirus pandemic has led to a blurring of the north-south divide in the UK, with economies up and down the country feeling the pinch.

But the think tank says that more than 600,000 jobs – more than four times as many as before Covid – are now needed in poorer parts of the country if Boris Johnson is to meet his 2019 election pledge to level up the nation’s regions.

How to measure the scale of the task

The Office for National Statistics releases monthly figures on the number of people claiming benefits primarily because they are unemployed.

This is not an exact measure of unemployment because some people claiming unemployment-related benefits – either Job Seeker’s Allowance or Universal Credit – will be in work but with a low income or few hours.

But it is a good way to monitor short-term changes to the labour market in real time – such as those seen during the pandemic.

Only Universal Credit claimants who are required to search for work – because they are unemployed or have very low earnings – are included in the ONS claimant count.

That should limit the number people who are on furlough but claiming wage top-ups being captured in the data, although the ONS says Covid-driven changes to Universal Credit eligibility could still be behind some of the increase in claimants in the past year.

What was the picture before Covid?

To assess the task of levelling up, Centre for Cities looked at the proportion of the working age population (those aged 16 to 64) across the country who were claiming unemployment-related benefits. This was at 3 per cent before the pandemic.

The analysis showed that the north and midlands were home to 47% of claimants, but only 39% of the UK’s working age population.

The think tank then assessed how many jobs would have to be created in the economically weaker regions, to bring them in line with the national average claimant rate.

This showed at least 200,000 jobs were needed nationwide to level up, including new jobs for people out of work and better jobs for low earning claimants.

Of these, 170,000 were needed outside of the Greater South East region – London, the South East and the East of England.

How do things look now?

As of November – the most recent figures available when Centre for Cities did its analysis – the number of claimants had increased to 2.6 million, or 6.3 per cent of the population.

But an additional 740,000 people were claiming unemployment benefits in the areas that already had an above-average claimant count in March 2020.

Outside the Greater South East, over 634,000 people now need secure jobs to level up to the former national average – almost four times as many as before.

Some of the cities and towns facing the biggest levelling up challenge are Birmingham, Hull, Blackpool, Bradford and Liverpool.

However, with formerly prosperous places in London and parts of the South East also suffering severe economic damage from Covid, Centre for Cities says the Government also now has to prevent these powerhouses levelling down.

What does Centre for Cities say?

Chief executive Andrew Carter says the Government needs to entrust local leaders to make decisions to help their economies recover and level up, calling for more powers for directly elected mayors.

He said: “Too many of the Chancellor’s announcements in his recent Budget – Towns Deals, freeports, other centrally-controlled funding pots – suggest that he intends to maintain the overly-centralised Whitehall-knows-best way of running the country that has come under so much criticism during the pandemic.

"Unfortunately, I have so far seen little from the Government to suggest that they have thought seriously about how to increase the prosperity of places outside London and the South East.”

You can read more from Andrew here.

What does the Government say?

A spokesperson for the Department of Housing, Communities and Local Government said: “Levelling up all areas of the country remains at the centre of Government’s agenda, empowering our regions by devolving money, resources and control away from Westminster.

“Our £3.6 billion Towns Fund, £4.8 billion Levelling Up Fund, £220 million Community Renewal Fund and eight new Freeports will support and regenerate communities across the country, including rural areas.

“We intend to bring forward the Devolution and Local Recovery White Paper which will set out how the UK government will partner with places across the UK to build a sustainable economic recovery and our plans for future devolution arrangements to build on the success of the directly elected combined authority mayors.”