Pandemic has dealt a ‘body blow’ to the UK economy

The current COVID-19 crisis has dealt a ‘body blow’ to the UK economy, which will take many years to recover, according to a new report out today (1 October).

The report by the UK2070 Commission warns the pandemic has ‘not been a leveller’ and has reduced access to job opportunities, tested basic services to the limit, and exposed and reinforced existing patterns of inequality.

It argues deprived communities have experienced the worst consequences of the pandemic.

Nine of the ten worst affected local authorities are in the Midlands or the North West, while high-performing local economies, like Oxford, Milton Keynes, London and Edinburgh, tend to be less exposed.

The report also claims the government’s current recovery programmes are ‘short term and not sufficient’ to deliver the change required.

Instead, it calls for a £375bn 25-year ‘New Deal’ strategy for Just Recovery to help disadvantaged communities get access to good jobs.

It also warns the lack of strategic regional governance in England is a ‘serious barrier to economic growth’.

It says new locally-based powers are needed to invest in the social and physical infrastructure for city regions and rural county areas.

Local and central government should collaborate on strategic thinking for the four ‘provinces’ of London and the South, the Midlands, the North and the Southwest, it argues.

‘Our new Post-Covid Action Plan sets out a proposed programme of action which unlocks capacity and delivers action at scale through local democratic leadership. We are calling on the Government to go big, go local,’ said commission chair, Lord Kerslake.

‘We’re saying what is missing is a clear plan setting out the scale and form of levelling up, the actions required to deliver it and measures and milestones to success.

‘Covid-19 may have changed the path to delivery of levelling up but not its urgency and importance. The temptation of the government will be to rein in their ambitions and spending. This would be a serious error. To have any meaningful impact, what is needed now is a New Deal for Levelling Up,’ added Lord Kerslake.

Responding to the UK2070 Commissions report, Mike Hawking, policy and partnerships manager at the Joseph Rowntree Foundation said: ‘This government was elected on a promise to level up parts of the country that have been locked out of prosperity for too long. As the pandemic evolves from a health crisis to an economic one, many of those same areas are now being hit hardest. 

‘We are facing the second deep recession in a decade. If the government truly wants to build back better, our economic recovery and levelling up must go hand in hand.’

The full report – Go Big. Go Local – is available to read here.

Photo Credit – Geralt (Pixabay)