Economic Inactivity - Post Pandemic Trends in Counties
This analysis charts the rise in economic inactivity in county areas, exploring what is driving this increase and what can be done to address it.
Our analysis examines changes in economic inactivity across county and county unitary areas since the Covid‑19 pandemic.
Using national survey data, it shows that although overall inactivity rates in counties remain lower than in major cities, the post‑pandemic increase in people leaving the labour market has been concentrated in county areas.
The report highlights significant challenges for county councils and unitary councils, particularly linked to long‑term sickness, early retirement and student numbers, and argues that tackling inactivity will require more locally tailored employment, skills and welfare interventions.
The analysis lays bare the impact for county areas:
- The number of economically inactive people in county and County Councils Network (CCN) unitary areas increased by 320,300 between March 2020 and September 2022 – an 11.6% rise, while most other council types saw reductions.
- Counties accounted for 57% of the national increase in long‑term sickness, with 70,000 additional people inactive for this reason.
- Early retirement rose by 100,300 people in counties, representing 68% of the national increase; around 1 in 25 working‑age adults in counties are now retired early.
- County areas saw a 28.5% rise in the number of students – an increase of 181,800 people, while other types of council experienced falls.
Recommendations to government include:
- Devolve greater powers over skills, employment and welfare policy to county and county unitary authorities.
- Expand devolution deals so at least two‑thirds of county areas gain enhanced adult skills and employment powers.
- Transfer Local Enterprise Partnership functions, particularly skills and employment, to all upper‑tier councils.
- Provide long‑term, flexible funding for local growth and skills services to address health‑related inactivity and early retirement./
- Move away from one‑size‑fits‑all national policy, enabling place‑based solutions tailored to local labour markets.