Chancellor must avoid a one-size-fits-all Treasury-led approach to recovery

By Andrew Carter | 10 February 2021
  • Andrew Carter

As more of us are vaccinated we can begin to hope that this pandemic is nearing its end. Unfortunately, the beginning of the end of the health crisis enables us to focus our attention more sharply on the scale of the economic crisis that we face.

COVID-19 has had a devastating effect on the economies of many of the UK’s largest cities and towns. Traditional north-south divides have blurred as prosperous places such as London and Crawley join Birmingham, Hull and Blackpool as some of the cities hardest hit by the pandemic.

It is hard to underestimate the consequence of this. Centre for Cities’ annual Cities Outlook found that COVID-19 makes the Government’s already difficult levelling up agenda four times harder to achieve, and risks levelling down many of the economically successful cities and towns of southern England that the country relies on for taxes to fund public services.

We will not know the true scale of the pandemic’s economic damage until the economy reopens, the furlough scheme is wound up and business support programmes end. However, the Government cannot afford to wait until then to set out a place-based recovery plan that responds to the different ways that cities have been affected.

In London and Edinburgh, where shops and restaurants are still closed but many higher-skilled jobs have been done from home, policies must be designed to strengthen city centre economies and give people the confidence to return when it is safe to do so. This may include a version of the Eat Out To Help Out scheme – ‘Spend Out To Help Out’ – for hospitality and bricks-and-mortar retailers.

However, for the places struggling before the pandemic hit, the recovery plans must be more fundamental. Sustained investment in skills to get people into jobs is needed, as is a plan to encourage more high-skilled businesses to locate and grow in cities in the North and Midlands.

The chancellor is currently developing his recovery plan. He must avoid a one-size-fits-all Treasury-led approach to recovery that will further entrench our pre-COVID economic divides, and instead give local leaders the powers and resources to they need rebuild their areas.

Andrew Carter is chief executive of Centre for Cities


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