Deprived areas in England are suffering a larger economic hit from Covid-19, according to a New Statesman analysis.
The national economic picture is a grim one, with the Office for National Statistics (ONS) recording 650,000 job losses despite more than nine million people being furloughed under the government’s Job Retention Scheme.
The UK’s well-known regional inequalities means the pain is not being felt equally, with a risk that some places will be left behind – just as they were during the 2008 financial crisis.
Local economic data is far less widely available than national figures, but by comparing government support through the furlough and self-employment schemes, as well as unemployment rates and footfall data, a local picture becomes clearer.
The New Statesman’s analysis combines these figures with unemployment claims and Google data showing footfall in retail and recreation areas to generate an economic “damage score” that aims to show which parts of the country are suffering most from the fallout from Covid-19.
Areas with greater levels of deprivation tended to fare worse, with the most-deprived 10 per cent of areas in England seeing an average Covid-19 “damage score” more than double that of the least-deprived 10 per cent.
Newham, east London, came out worst in our analysis, with a furlough scheme take-up rate of 36 per cent and retail footfall still more than 50 per cent down on pre-coronavirus levels. The area is the 43rd most-deprived local authority out of 317 in England.
The ten worst-affected areas are mostly heavily urban, with four London boroughs topping the list and Walsall, Dudley and Glasgow also appearing in the top ten. All but one local authority in the top ten also feature in the top third of the most-deprived areas.
These worst-hit areas also happen to have much higher ethnic-minority populations compared to the areas that have been least affected on our scale.
At the other end of the scale, Richmondshire in North Yorkshire emerged as having the lowest economic damage score in England. It features in the least-deprived 20 per cent of the country.
The areas at the better end of the economic damage scale were more likely to be higher-income areas from the south of England, including areas such as West Berkshire and Winchester.
That people in more deprived areas are being hit harder is also reflected in food bank usage figures, with the Trussell Trust recording an 89 per cent increase in demand for emergency food parcels in April this year compared to last. It has led to concern that the government’s current package of financial aid is not doing enough to help poorer sections of society.
Emma Revie, the chief executive of the Trussell Trust, said: “We have been seeing rises in food bank need for the past five years but this 89 per cent increase – with the number of families coming to food banks doubling – is completely unprecedented and not right.
“People need to be able to put food on their table. The government must put urgent support in place to ensure people already struggling to keep their heads above water can stay afloat.”
The Trussell Trust has formed a coalition with other charities IFAN, Child Poverty Action Group, Children’s Society, Joseph Rowntree Foundation, StepChange and Turn2us during the crisis to recommend a temporary Coronavirus emergency income support scheme.
That different areas of the UK are being hit differently by the fallout from the virus is unsurprising given sectoral differences in how those economies are composed. About 30 per cent of jobs have been furloughed across the UK according to HMRC, while the take-up rate for the self-employment income support scheme stands at 75 per cent.
There is, however, significant variation on a local level in these metrics, with some areas having as many as 40 per cent of employments furloughed and an 80 per cent take-up rate in self-employment support.
In both cases, the most-deprived 10 per cent of England has a higher take-up rate than the least-deprived 10 per cent. In the case of the furlough scheme, the take-up rate in the poorest 10 per cent of England stands at 31 per cent, while in least-deprived areas it is 27 per cent. For the self-employment support scheme, the figures are 77 per cent and 73 per cent respectively.
Blackpool, the most-deprived place in England, came 24th on our scale of economic damage with a 34 per cent take-up of the furlough scheme; one of the highest rates in the UK.
Areas such as Blackpool, with a heavy reliance on tourism, are being heavily sustained by the furlough scheme. South Lakeland and Eden – two areas of the Lake District – have the highest take-up rates, standing at 40 per cent and 39 per cent respectively.
The Highlands, Cornwall and other seaside resorts such as Scarborough are all also currently making heavy use of the scheme.
A government spokesman said: “Levelling up every part of the country remains central to the mission of this government, and is key to helping our communities recover from the impacts of coronavirus.
“We have provided an unprecedented package of almost £28bn to support local councils, businesses and communities in fighting this pandemic while our £3.6bn Towns Fund will help 100 places – including Blackpool – recover through Town Deals worth up to £25m or more in exceptional cases.
“We’re also creating a UK Shared Prosperity Fund, which binds together the whole of the UK, tackling inequality and deprivation in each of our four nations.”
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