Crises are never felt equally between people and places.
This was clear during the pandemic when people in deprived places were more likely to die from Covid, and it is true in the current cost of living crisis, with our latest research revealing big differences in vulnerability between areas.
Take Middlesbrough, which is the most vulnerable place in our Cost of Living Vulnerability Index. Here, 17% are already in fuel poverty and 24% of the workforce are on low pay. By contrast, South Cambridgeshire, which is the least vulnerable place, just 10% are fuel poor while 10% have low-paying jobs. Yet the role of place in responding to this latest crisis has been entirely absent from the debate, including during the recent mini-Budget.
Our new report, Hard Up, identifies local and regional vulnerabilities to the crisis and sets out what we can do in response. It finds the North East is most vulnerable region, while seven in 10 former Red Wall places are among the most vulnerable local authorities.
There is a distinction in our analysis between those places where there is a risk of households that were already poor getting poorer – as is the case with many London boroughs, and those places where many are on the cusp of poverty and risk being pulled into it. This is largely the case for rural and coastal areas where two factors – a rising number of workers who are economically inactive, and a greater share of local jobs that are low paid, characterise their vulnerability.
Several vulnerable areas – predominantly in the North and the Midlands, are also heavily dependent on energy-intensive sectors for employment – which means they could face a double hit. In the absence of business-specific support in addition to the temporary Energy Bill Relief Scheme, the economic outlook for places such as Hartlepool, Redcar and Cleveland, Stoke-on-Trent and Sandwell – is bleak.
To better understand what we can do in response, CPP spoke to more than 20 local and combined authority officers from the Inclusive Growth Network. They told us that years of severe cuts, strict spending criteria attached to central Government funds, and the lack of a long-term financial settlement, means their power to respond to the crisis in the short-term and then rebuild over the longer-term is highly limited.
The report sets out a policy package to provide vulnerable places with greater financial assistance to deal with the crisis, allied with stable long-term funding to deliver sustainable inclusive growth.
It is vital that we raise the Household Support Fund, to £5bn annually and remove all spending criteria, throughout the immediate crisis period. To aid recovery, the UK Shared Prosperity Fund should see a significant expansion so that it more than matches previous EU structural funds and on a longer-term, seven-year funding cycle between 2024-30, worth £18bn.
We are also calling for two new funds to enhance local energy security. A Business Transition Fund, to support the transition of energy-intensive firms to decarbonise, while preventing job losses, and a Retrofitting Investment Fund, that would support places to create local markets for retrofitting, putting the responsibility for delivery in local government hands.
Our package, worth £67bn over seven years, would radically transform local government finances and powers, significantly strengthening their role in fighting the effects of rising prices and building the resilient local economies of the future.
Ross Mudie is research analysis at Centre for Progressive Policy
@CentreProPolicy
