North East Devolution and Levelling Up

Covid Brings New Levelling Up Challenge – Report

North East England faces new competition for the resources needed to level up, at least in the short term, as the Covid-19 pandemic has hit some previously economically successful parts of Britain hard, a new report suggests. 

It warns: ‘If the long-termlevelling-up task is predominantly a challenge for the north and Midlands, the same cannot be said about dealing with the economic impact of the pandemic. Covid has created a new challenge in the south and added significantly to the scale of the existing challenge in the north and Midlands’. 

The economies of nine cities and large towns including London and several towns in its commuter belt as well as Aberdeen, Edinburgh and Leicester, which were strong before the pandemic, have suffered badly, according to the Cities Outlook 2021 report from the Centre for Cities. 

These nine join 36 other cities and large towns that went into the pandemic already in need of levelling up, of which 15 – none in the North East – face an extra challenge because Covid has eroded their export base. 

But 21 cities and towns, including Middlesbrough, Newcastle and Sunderland, which went into the pandemic in need of levelling up, have seen their export base relatively sheltered from Covid and are better placed to recover. 

The implication is that in the immediate aftermath of the pandemic these 21 could find themselves in competition for assistance from London and the other previously prospering places whose economies have suffered particularly badly from Covid as well as from those places that both went into the pandemic in need of levelling up and were further badly damaged by Covid.

However, unlike levelling up, bouncing back from Covid is likely to be a shorter-term challenge for many places, according to the Centre for Cities. But it also warns that for the North East cities and towns and others in a similar position ‘their longer-term challenge is that even a full recovery to where they were before the pandemic will return them only to a position of relatively weak economic performance, something which levelling up policies will need to tackle’. 

Latest figures from the Office for National Statistics confirm the devastating effect of Covid on London. The capital has displaced the North East as the region with the UK’s highest unemployment rate. In the September-November 2020 period, London’s jobless rate was 6.9% compared with 6.4% in the North East. The UK figure was 5.0%.