The hardest hit towns and cities in the East Midlands are expected to come back from lockdown faster than other parts of the 海角视频, according to a new study.
Leicester has been among the worst hit places after finding itself in a local lockdown for much of 2020.
Along with Nottingham and Derby it is predicted to start its recovery sooner – despite still being worse off at the end of the pandemic than more resilient places.
The PwC-Demos Good Growth for Cities report suggests the make-up of the region’s economies, and variety of different industries there, will help in the fight to get back to normal over the coming years.
Leicester and Leicestershire, for instance, have a reputation for smaller, family-owned businesses propping the local economy up – rather than a handful of big businesses with further to fall when things go wrong.
The region’s position on the main motorway networks has also helped it become an important area for warehousing and logistics – a sector that has benefited from people shopping at home through the lockdown.
And while passenger flights have been grounded, East Midlands Airport has seen big growth in cargo flights going in and out of it.
The PwC-Demos report suggests Nottingham and Derby both saw their economies contract by more than 11 per cent during 2020, but are expected to have the best levels of growth in 2021 – at around 5 per cent and higher.
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Leicester’s economy shrunk by about 12.2 per cent last year, and while performing okay according to the PwC Good Growth Index, it will be one of the cities hardest hit economically, after stricter restrictions last summer hit things like city centre retail.
Even with a return to normal trading conditions – something that has not even been guaranteed with the vaccine roll-out – the city economies will still be smaller in 2021 than they were in 2019.
It says that as politicians plot the course out of the downturn they should learn from cities such as Oxford, Leicester, Leeds and Edinburgh, which had been performing more strongly over the longer term pre-pandemic, in areas such as jobs, health and skills.
The report calls for even more to go into addressing structural issues post-lockdown – improving skills, jobs for young people, new business development and addressing environmental challenges – whilst directing effort and resources to the towns and cities that need them the most.
Other key findings of the report show Derby has one of the lowest rates of workers on furlough, with 6.4 per cent of its workforce on the job retention scheme during 2020.
Nottingham, meanwhile, had the lowest increase in the take-up rate of Universal Credit at 2.6 per cent between January and November, 2020, compared with Birmingham which had the third highest increase at 4 per cent.
Ali Breadon is the East Midlands market senior partner and Midlands government and health industries lead at PwC.
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She said: “As a whole, cities in the East Midlands have performed well on the environment, owner occupation and income distribution measures on the index.
“However, this positive performance is also coupled with lower scores in skills, health and work life balance.
“High unemployment rates especially for young people entering the labour force in one of the toughest economic environments will make employment opportunities even more competitive and potentially undermine social mobility efforts in the region.
“Leicester is expected to suffer more economically in comparison to other cities in the Midlands, with a growth rate of minus-12.2 per cent in 2020 compared with other cities such as Derby at minus-11.7 per cent.
The high infection rate in the early parts of the summer has caused Leicester’s economic activity to stagnate over this period.
But as we’ve seen in this year’s Good Growth for Cities Index, Leicester has performed well on health, work life balance, owner occupation, income distribution and the environment measures.
“The pandemic has led to people living their life much closer to home and the likelihood is some of these lifestyle changes will stay for the medium-term.
“Citizens will value different things and those places that meet those needs will be the ones that bounce back quicker.
“This opens up opportunities for places that have advantages in terms of liveability and community, and where ‘price of success’ factors, such as housing affordability, are less of an issue.
“The report sets out a series of recommendations for leaders from across the region and local government, as well as the private and third sectors, as they plan their recovery strategies.
“Taking a broad approach to economic wellbeing and building resilience will be essential to create liveable vibrant places where people want to live, work and visit.
“The wider regions’ significant growth over the past five years and long-term growth ambitions and investments in HS2, Coventry City of Culture and the Birmingham 2022 Commonwealth Games will also encourage the right conditions for a recovery.”
The Demos-PwC Good Growth for Cities Index ranks 42 of the 海角视频’s biggest cities based on the public’s assessment of 10 key economic wellbeing factors, including jobs, health, income and skills, as well as work-life balance, house affordability, travel-to-work times, income equality, environment and business start-ups.
PwC’s GVA analysis took into account the main industries in each city, the use of the furlough scheme to protect jobs, rates of Universal Credit claims, Covid infection and mobility rates to project GVA growth rates for 2020 and 2021.
It said the cities performing well include Edinburgh, Aberdeen, Norwich, Swindon, Southampton and Oxford.
Poorer performing cities include Liverpool, Southend, Medway, Doncaster and Bradford.
Ali Breadon said: “The pandemic has made us more acutely aware of existing economic and social inequalities and why it is so important to ‘level up’ across the 海角视频.
“It reinforces our view in Good Growth for Cities of the necessity to look beyond GDP and headlines about the North-South divide to focus efforts on tackling the issues that really matter to the public - and local economies – such as skills, sustainable income and health and wellbeing.”
PwC is one of the Big Four accounting firms and Demos is a cross-party think-tank.