Leader Views


Posted on:
10th March, 2021

Deep seated challenges face worst hit towns post pandemic

Cities worst hit by COVID-19 are set to make faster economic recovery but the UK needs to think local to level up, according to the latest Demos-PwC 'Good Growth for Cities' report. Here PWC's Head of Regions, Carl Sizer, takes a closer look at what the report is telling us.

Deep seated challenges face worst hit towns post pandemic

Our recently published analysis PwC-Demos Good Growth for Cities report shows that the UK cities and towns hardest hit by the economic fallout from the pandemic are likely to make the fastest recovery, but are expected to be worse off than at the beginning of the pandemic compared to more resilient places.

Cities and towns hardest hit during the pandemic, such as Bradford, Liverpool and Southend have seen their economies decrease by more than 12.5% in 2020, yet are among those with the strongest projected GVA growth rates for 2021. These cities are predicted to recover faster than others in 2021, with growth rates of 5.3% and higher.

As the business sectors most impacted by restrictions reopen, the cities most negatively affected due to their sectoral mix will see faster recoveries. However, a return to pre-pandemic conditions will not necessarily instigate a dramatic upturn in economic activity and these city economies will still be smaller in 2021 than they were in 2019.

The report also highlights the deep seated challenges facing many of the worst hit towns and cities which in many cases are those traditionally vulnerable to volatile economic performance.

As the UK looks to ‘build back better’ from the pandemic, ensuring that the recovery lays the foundations for building resilience against future shocks will be vital. Learning and embedding lessons from cities, such as Oxford, Leicester, Leeds and Edinburgh, which have performed more strongly over the longer term pre-pandemic, in areas such as jobs, health and skills, is key to driving more balanced and sustainable economic growth across the UK.

The report calls for a doubling-down on efforts to address structural issues - such as improving local skills, encouraging new business development and addressing local environmental challenges - whilst directing effort and resources to the towns and cities that need them to achieve longer-term sustainable growth. Creating employment opportunities and improving skills levels should be top priorities nationally and locally - particularly for younger people.

The pandemic has made us more aware of the existing economic and social inequalities and why it is so important to ‘level up’ across the UK. It reinforces a view of the necessity to look beyond GDP and the headlines about the North-South divide to focus real efforts on tackling the issues that matter to the public - and local economies - such as skills, sustainable income and health and wellbeing.

Good Growth for Cities suggests a better way ahead that accounts for the strengths and needs of individual towns and cities to build more resilience and drive a fairer recovery across the UK.

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