CCN launches new economic recovery campaign as research shows the unemployment impact of the pandemic on rural areas

Councils today warn that a narrow focus in the government’s levelling-up agenda which bypasses rural and shire counties risks England’s economic recovery from Coronavirus, with those areas seeing over 1,000 people a day claiming out of work benefits in the 12 months since the outbreak.

The analysis from the County Councils Network (CCN) shows that the number of people claiming out of work benefits has grown fastest in county and rural areas since March 2020,  more than doubling during the pandemic across the 36 county areas it represents – rising by 123% since March 2020. This is compared to a rise of 84% in Northern towns and cities.

The research is published as the CCN launches its new campaign: Counties: Leading Recovery, Delivering Renewal. This campaign aims to highlight that county councils and unitary councils in counties will have the lead role in local economic recovery efforts, particularly in re-skilling individuals, infrastructure, and green growth, and in setting ambitious visions for their areas.

In addition, data shows that their economies are projected to contract by almost £60bn since the start of the pandemic in England.

Those 36 county areas have also witnessed the fastest growth in furloughed employees during the past six months which has seen a national lockdown re-introduced – with almost 1.5 million people in county areas now currently on furlough.

Councils fear that these people and more will not have jobs to return to once the scheme winds down in the Autumn, because there are 5.9m people in county areas who are working in employment at risk of widespread closures, some 53% of the entire workforce and higher than Northern towns and cities.

The CCN says that the analysis shows that rural and large county areas in all four corners of the country have borne as much of the brunt of the economic shock as urban locations. They argue a ‘narrow and simplistic’ focus on northern towns and cities in the forthcoming Levelling-Up White Paper could overlook the needs of their areas, and risks those communities becoming left-behind areas too, devoid of the employment and skills needed.

Analysing the economic impact of coronavirus for the 12-month period to March 2021 reveals:

• The number of people claiming out of work benefits in the 36 county areas the CCN represents has risen by 421,365 people to 762,430 – a 123% increase. This equates to 1,154 new people a day claiming out of work benefits since the pandemic’s outbreak in England. In comparison, the rise in 36 metropolitan boroughs in towns and cities in the North and West Midlands totals 282,235 – an 88% rise.
• Many county areas in England’s regions have seen the amount of people claiming out of work benefits more than doubled, including an increase of 124,000 people in the South East – a 153% rise on March 2020.
  Elsewhere, there was an increase of 94,685 in the East of England – a 135% rise – 54,120 more people in in the South West – a 130% increase, and 40,400 people in counties in the West Midlands – a 117% year-on-year increase. County authorities in Yorkshire and the Humber saw a 115% increase.
• There were 1.5million people on furlough in March in county areas, an increase of 730,000 people in the six months from October 2020, higher than all other areas.
• There are 5.7m people in county areas who are working in employment deemed at risk of widespread closures, such as leisure, manufacturing, and hospitality – 53% of the entire workforce. In addition, economic output, as measured by GVA, has declined by £58bn in those areas, including 17.4bn in the South East, £13.3bn in the East of England, and £6.3bn in the East Midlands, between 2019 and 2020.

The CCN has called on the government to ensure that their levelling up agenda does not bypass county areas, with more powers to councils to address the need to create new jobs and re-skill individuals.

The network is calling on the government to ensure regional investment as part of the levelling up agenda reaches all four corners of the nation. Alongside they say the forthcoming Levelling-Up White Paper must include ambitious proposals for the devolution of new powers to councils to help drive local economic recovery strategies, including powers over skills and employment budgets.

The CCN argues that these county authorities should be given the same devolved powers and budgets on skills and adult employment as metro mayors, which cover large swathes of Northern and West Midlands towns, and to make these powers accessible in the forthcoming Levelling-Up White Paper. This is so those councils can help re-skill their workforce, tailored to what individual economies require.

Watch coverage of the research across regional BBC programmes this morning below.

Cllr Barry Lewis, Economic Growth Spokesperson for the County Councils Network, said:

“County areas have not been without their challenges  but historically had low unemployment until the economic devastation of the pandemic, which has led to an explosion in people claiming out of work benefits. This could just be the start: with half of the workforce in counties employed in at risk sectors we fear that thousands of people will not have jobs to go back into once furlough ends.

“To date, there has been an understandable focus on levelling-up Northern towns, but an overly narrow and simplistic focus which bypasses rural and shire counties will hamper the country’s economic recovery. This analysis shows that levelling up needs to happen right across all four corners of England.

“To ensure county areas don’t become left-behind communities, we are urging the government to not forget about these places when it comes to the distributing resources as part of levelling-up. In addition, county authorities should be given the powers and resource to lead economic recovery efforts locally, in recognition that each county area will have individual solutions.”

Launching CCN’s new Counties: Leading Recovery, Delivering Renewal campaign, Acting Chairman Cllr David Fothergill said:

“This analysis vividly illustrates that the economic fallout of the virus is impacting on all four corners of England and if we are to truly unleash the potential of the entire country, government must ensure that counties are at the heart of the levelling-up agenda. That is why this year CCN has launched its new campaign Counties: Leading Recovery, Delivering Renewal.

“This campaign will recognise that local government will need to continue to adapt to reflect the fundamental changes brought about by the pandemic, building on some of the positive changes, as well as increasing resilience, agility and the skills required to be able to overcome economic and social challenges exacerbated by Coronavirus.

“The extraordinary circumstances of 2020 have forced us all to rethink the role of public services, none more so when it comes to economic recovery and green growth. As strategic leaders of place, county authorities are already forging their own local economic recovery plans. But to ensure that the whole country can build back better, they need the powers and resources to match their ambitions, ensuring that levelling up doesn’t neglect their areas and the potential our councils to proactively support the recovery.” 

Jobseekers Allowance change – year since March 2020

Furloughed staff and jobs at risk

CCN councils here are defined as the councils represented by the County Councils Network. A full list is here.

Metropolitan boroughs are defined as 36 local authorities, 7 of which are based in the West Midlands and 29 are based in the North, spanning West and South Yorkshire, Greater Manchester, Merseyside, and Tyne and Wear.

The core cities are defined here as the eight English core cities which make up the lobbying group, Core Cities. They are as follows: Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham, Sheffield.

Notes to editor

• The County Councils Network (CCN) is the national voice for England’s county councils. It represents 24 county councils and 12 county unitary authorities. Collectively, they represent 26 million people, or 47% of the country’s population. For more information click here.
• The claimant count number for individuals claiming out of work benefits (which includes Jobseeker’s Allowance and some Universal Credit recipients who are required to look for employment. The CCN analysis compared the numbers in March 2020 to March 2021, using the government dataset here.
• The figures on furloughed workers at March 2021 and at October 2020 are taken from the government dataset
• The jobs at risk data is taken from the Business Register and Employment Survey from 2019, accessible here.
• The numerical figure is a total of the total workforce in the following sectors deemed at risk by adviser Grant Thornton UK LLP, based on a methodology using the Office of Budgetary Responsibility’s Coronavirus reference scenario which provides output losses by sector in the second quarter of 2020. Any sector with an output loss of over 50% is considered ‘at risk’. These sectors as are as follows: accommodation and food services; manufacturing; construction; retail; motor trades; wholesale; arts and recreation, education. The percentage figure in this section on jobs at risk shows the percentage of employees working in these sectors as a proportion of the entire workforce.

• The percentage and monetary figures on GVA decline are based on Grant Thornton UK LLP modelling using the Office for National Statistics monthly GDP data based on GVA which shows the national percentage change in GDP for 2020 compared to 2019 for each of the Standard Industrial Classification sectors. These percentage reductions were then applied to the latest available GVA data for local authorities (2018) to estimate what the potential impact on GVA may be as result of the pandemic. This projects a GVA lower than what it would have been without the economic impact of the Coronavirus.