A major new report, Child of the North, produced by the Northern Health Science Alliance (NHSA) and N8 Research Partnership outlines the inequalities faced by children growing up in the North post-pandemic compared to those in the rest of the country.
Over forty leading academics from across the North of England wrote of the wide range of factors disproportionately impacting our children, including increased chances of poverty, obesity, being in care, and death under the age of one. Children of the North were lonelier throughout the pandemic, and they also missed more schooling throughout this time, which will cost an estimated £24.6 billion in lost wages over lifetime earnings, while the mental health conditions they developed during the pandemic could cost them an additional £13.2 billion. The North also faced more cuts to spending on Sure Start children’s centres — a shocking £412 per eligible child on average, compared to only £283 in the rest of England. In addition, the one in five children who are from an ethnic minority in the North are more likely to live in deprived areas than children from ethnic minorities elsewhere.
The North East stats:
As a result, children growing up in the North “get a bad deal” with worse outcomes “across the board” says David Taylor Robinson, who is co-lead author of the report and Professor of Public Health and Policy at the University of Liverpool, and yet these inequalities are preventable. Kate Pickett, another co-lead author and Professor of Epidemiology at the University of York, states that levelling up the North should be just as much about creating opportunities for children as it is about infrastructure, and that “investment in children creates high returns and benefits for society as a whole.”
This includes “high returns and benefits” for the economy, with the report explaining that the well-known ‘productivity gap’ between the North and the rest of England, which costs the UK around £44bn a year and is predicted to grow, has its origins in poor health care. In essence, the relatively poor health care in the North has a profound impact on child health and development, which then impacts these children’s ability to grow up to be healthy, productive adults in the future, and the pandemic has exacerbated this. Previously, a 2018 ‘Health for Wealth’ report found that improving health in the North would reduce the regional gap in productivity by 30% and generate an additional £13.2 billion in UK GDP.
The authors put forward a large set of recommendations which aim to tackle the inequalities suffered by Northern children over the course of the pandemic, which includes urging the government to invest in early years services and other welfare, health and social care systems that support children’s health, particularly in the most deprived areas and areas most affected by the COIVD-19 pandemic. They state the need for greater support for children’s educational development in the post-pandemic years in order to ‘make-up’ for lost development of both cognitive and non-cognitive skills. The UK is already ranked as one of the lowest (169 out of 182) for its ability to deliver on key areas of children’s rights, prompting the report to advocate for children’s rights to be placed at the heart of COVID-19 recovery plans.
As for what the report says businesses can do to help, they encourage local businesses to pay staff the Living Wage, get involved in multi-component employment interventions to decrease unemployment among young people, and connect with and support educational establishments. The report states that “schools can help businesses to engage and understand places and their people, and help our businesses and enterprise initiatives target investment more effectively, and thereby drive social mobility.”
Read the NHSA and N8 Research Partnership’s full report here and their summary here.
Freya Thompson
Knowledge and Research Executive
Photo by Michał Parzuchowski on Unsplash
The past year has been one of tremendous hardship for many businesses, and huge change for many more. While the public health impacts of the pandemic have been, and rightly remain, as the nation’s number one priority, we have only just begun to feel the real economic impacts.
The furlough scheme, which as of the end of January still supports 14% of jobs in the region, has protected those jobs most vulnerable to the impacts of repeated lockdowns and operational restrictions over the last twelve months.
The North East has been under either high levels of local restrictions or national lockdowns since September, and our hospitality, leisure, accommodation and retail sectors have suffered as a result.
The figures below outline the degree to which the region has relied on business support measures, although not always receiving the same value of support as national averages.
North East businesses are resilient, and have proven their adaptability countless times over the past year, but in order to rebuild our economy successfully as restrictions are lifted they will require continued support.
What’s the jobs situation a year on?
This morning’s labour market statistics put North East unemployment at 6.4%, well ahead of the national average of 5.0%.
That’s 78,900 North Easterners currently out of work but – as I’ve taken to tweeting every month – the definition of unemployment is actually quite narrow, requiring you to be available to start work in the next two weeks, and to have been actively looking for work in the last four weeks.
Often the fluctuations in the unemployment rate can be accounted for by changes in the economic inactivity rate. In the latest set of figures, the unemployment rate has fallen 0.5% for those aged 16-64, but the economic inactivity rate has increased 0.3% and economic activity rate has only increased 0.1%.
So, good news, but not that good.
Over the past year, unemployment hasn’t skyrocketed, and has in fact ticked down since downwards since a high last summer – that high perhaps coinciding with the increase in the employer contribution under the furlough scheme in July, August and September last year.
Economic Inactivity hasn’t skyrocketed either, but it has had a more prolonged period of steady growth, again across the summer.
Looking at these numbers alongside the stepping up and down of furlough scheme take-up in the region, and you can see a clearer picture of the health of the economy.
As of the end of January, there were 150,000 people on furlough in the region. Even at its lowest point at the end of October – just before the four-week national lockdown in November – the scheme was supporting 70,400 people.
What about other forms of business support?
The other main forms of ongoing support have been the self-employment income support scheme, which has tended to mirror (albeit less generously) the ebbs and flows of the furlough scheme.
Another 62,000 North Easterners have received support through that scheme, a total of £157m, and an average claim of £2,500.
It’s worth remembering these scheme is fairly strict in eligibility – you need to have a filed a tax return, so the newly self-employed missed out, and you needed to earn more than 50% of your income via self-employment, so those with self-employed second jobs missed out.
North East Self-Employment Income Support Scheme – claims to 31st Jan 2021
| Total potentially eligible | Total number of claims made | Total value of claims made | Average value of claims | Take-up rate | |
| Male | 64,300 | 43,600 | £120,700,000 | £2,800 | 68% |
| Female | 28,900 | 17,900 | £36,100,000 | £2,000 | 62% |
| All | 93,000 | 62,000 | £157,000,000 | £2,500 | 66% |
Source – HMRC SEISS statistics
In comparison to national figures (Male: £3,100; Female: £2,200; All: £2,800), the region has received less per person.
Next, the two main business loans – the Coronavirus Business Interruption Loan Scheme, announced first, and the Bounce Back Loan Scheme, which had fewer criteria, lower thresholds and did the job the CBILS was intended to do.
You can see in the take-up figures the massive gap the BBLS plugged – with loans valuing two and a half times that of the CBILS in the region, despite launching six weeks later in the height of the pandemic.
North East Coronavirus Business Loan Scheme Take Up (as of 18 Jan 2021)
| Value of Loans Offered | Number of Loans Offered | Average | |
| Bounce Back Loan Scheme | £1,249,741,795 | 44,858 | £27,860 |
| CBILS | £493,314,081 | 1,994 | £247,399 |
National totals
| Value of Loans Offered | Number of Loans Offered | Average | |
| Bounce Back Loan Scheme | £43,643,579,977 | 1,434,730 | £30,419 |
| CBILS | £18,519,653,218 | 72,016 | £257,160 |
Source – British Business Bank
The comparison to national figures here shows again a disparity with national averages – although a fairly small proportional difference.
What’s to come?
It’s safe to assume the economic fallout will be with us for several years after the public health aspects of the pandemic are firmly under control.
The last major economic crisis, and for many of us the one we best remember from our working lives, was the recession following the 2007/08 financial crisis.
In that case, the peak of unemployment didn’t arrive until 2011/12, and took ten years to return to its pre-crisis level. Ten years is a long time to wait, and a lot of lost potential – we need to recover quicker this time.
At our Quarterly Economic Briefing this morning, our Director of Policy Jonathan Walker put up a couple of slides which really caught the eye.
One was a sad picture of the impact of Covid-19 on the region – fourth in cases per 100k population, but second in deaths per 100k.
I’ve written before about the vulnerability of the North East to the virus, including our pre-pandemic public health figures, inequality, and ability to work from home.
I won’t repeat the arguments here, but these fundamental weaknesses are what need to be addressed for the region to rebuild, and be more robust and resilient when the next crisis comes along.
Finally, a note of positivity from our latest Economic Survey, the full results of which are here.
Despite everything, businesses are anticipating better times on the horizon, and the transition in outlook from the second quarter of 2020 to now is huge – a tribute to their adaptability, the planned lifting of restrictions, and the rapid vaccine rollout.
Over the next few months, we’ll be continuing to campaign on behalf of the region’s businesses and running webinars to help you adjust for the long term, as well as carrying out big pieces of work on the future of the workplace and sustainability.
As always, your views and experiences are crucial to forming this work, so please do get in touch.
Arlen Pettitt
Knowledge Development Manager
Photo by Waldemar Brandt on Unsplash
Last week Oliver Dowden, Secretary of State for Digital, Culture, Media and Sport, wrote an article for Campaign Live titled “Why advertising is pivotal to building back the economy”. The article discussed the £17bn that was contributed to our economy in 2019 as a result of the advertising industry. The article goes on to mention the 190,000 people that were, and still are, employed across the country as a result of advertising and how this sector is a vital cornerstone of our wider, world-leading creative culture. A sorry state of affairs when we compare it to the recent report published in The Drum which was carried out by WPP agency Group M. It stated that “2019 into 2020 saw a shift from 8.6% to -4.4%, the largest variance on record, as well as the largest contraction in the last decade.”
However, it would seem that there is light at the end of the tunnel as Mr. Dowden also highlighted that the golden beacon of hope for many in this industry is that “advertising will be absolutely pivotal in rebuilding our economy and bringing it back to full strength. A strong market economy needs advertisers, and your immense creativity, to help consumers make choices.”
It is clear that this dynamic sector will play a significant part in our economic bounce-back, after all we’re not just relying on one channel to communicate to our audiences – that’s the beauty of advertising, it comes in all shapes and forms.
We’ve predicted the top three themes that companies will look towards, to not only increase their sales and profit, but also help to push the UK out of a recession.
Share of voice is essential
As we mentioned in our previous blog, acquiring or maintaining an excess share of voice is vital for businesses throughout a recession in order to stay front of mind amongst consumers and to position your brand for the highest chance of recovery after a recession. It doesn’t matter about the size or sector of your business; times are increasingly competitive. If you don’t advertise right now you are going to lose out to those brands that keep spending. Social media marketing, paid advertising and email marketing are all ways to get your brand noticed by the consumer and brands that continue their advertising will certainly reap the rewards when they can re-open.
Marketing online making it their time to shine
In our current operating climate, the best way to reach people is through an online presence. Online audiences are the Achilles heel of the UK consumer market and high street footfall is dwindling faster than you can say ‘Coalhouse’. Ensuring that your website’s UX is seamless and considering backlinks from other marketing efforts will help to ensure that you are providing yourselves with the best possible chance of increased sales.
Legacy
In the not too distant future (fingers crossed) this pandemic will become a distant memory and our life will slowly return to normal, whatever that will look like. However, consumers will continue to discuss the marketing and advertising efforts of those during lockdown.
Fine tuning your long and short-term marketing strategy to ensure that you are not a company that is left behind will be more important than ever. Doing things differently and adapting to consumers behavior will ensure that these consumers not only spend, but they become loyal and returning customers.
Hopefully, in 2022 we will be writing a blog outlining the remarkable efforts that were made by companies across the UK that thrived and, in turn, helped to lead the UK out of an economic recession. These companies will be pivotal in the financial success of the country and most of all, will have adapted and molded to the current consumer climate to ensure that their businesses are still thriving.
New job support scheme
This scheme will help to retrain jobs in the region, but this scheme will not cover people on zero-hour contracts or those without regular hours. Heavily impacted sectors such as arts and tourism are also still unable to operate due to public health restrictions which prevent people returning to work. This scheme will provide limited support to those unable to return to a third of their usual hours.
Pay as you Grow
Self-Employment Income Support Scheme
Tourism and Hospitality
Self-assessed income tax
VAT deferral:
We recognise that cashflow is a large issue for businesses so helping businesses to repay loans will be beneficial.
However, there is a lack of support for start-ups and encouraging newly formed businesses in these measures who will be crucial for the recovery.
Support for businesses to retrain staff especially around digital sills is still needed as many businesses move more online.
We still need to see funding and support for local testing to ensure we have a functioning track and testing system in the region .In order for the education, health and private sector to recover we need local access to quick and accurate tests.
Andrew Bailey, Governor of the Bank of England today (24 September 2020) gave a keynote speech to 130 leading North East business figures.
Organised by the North East England Chamber of Commerce, he spoke about the challenges in the economy at present in the midst of uncertainty due to Covid-19.
He said: There will be an uneven recovery due to the impact of factors such as social distancing on specific sectors. Retail sales, for example, are not that far off their normal trading position but there is a different mix with less social consumption and more sales in areas such as DIY. There is also the major shift to on-line sales. “The patterns of consumption have changed and the return of Covid-19 and the necessary measures will also affect the pattern of recovery.
“We do expect to see Q3 GDP 7-10% lower than last year so that is a big downturn and we have a long way to go to improve that figure. There are hard yards ahead.”
Questions from Chamber members were wide-ranging including whether there was the possibility of introducing negative interest rates. Andrew Bailey said they are in the toolbox of potential measures and work is being done on practical issues of implementation, but this implies nothing about their use in the future.
The Governor was also asked about economic forecasting. His answer was that there were three elements, the central case for the likely path of the economy and inflation, how much uncertainty there was on that path and the distribution of risk’s around it.
At present Andrew Bailey said the risks were in a range of areas, notably Covid but also disruption around the outcome in the EU trade agreement and other world events including US/China trade tensions. These factors led to a downside risk and created uncertainty.
In response to a question on taxation he replied that it was a tool of Government policy and not under the control of the Bank of England.
To close he said: “We have a stable banking system in the UK and it is critically important at this current time so that it can provide credit and support businesses and households.”
James Ramsbotham, Chamber chief executive said: “We are extremely grateful the Governor has taken time to share his views with us at this challenging time for our economy. It was a tremendous opportunity for our members to ask questions about issues that are important to them, now more than ever, such as the effectiveness of Government support measures, taxation and interest rates.”
The speech was a Chamber President’s Club webinar in association with Learning Curve and the event sponsored by Pulsant.
As the Chancellor stands up today to announce measures aimed at securing the nation’s economic recovery from the Coronavirus crisis, we’ve published an in depth look at what the official statistics say about the North East and the effects of the crisis.
This report, Before, During and After? – the North East’s economic outlook, highlights that this national crisis, which has had had largely national response to date, is being felt differently in different parts of the country.
In the North East, nearly three quarters (72.4%) of businesses have seen a fall in turnover as a result of the crisis, compared to 64.8% nationally.
Nearly three in every ten jobs in the region (28.08%) are currently being supported by either the Coronavirus Job Retention Scheme or the Self-Employment Income Support Scheme.
The underlying weaknesses in the region’s economy have been brought into focus by this crisis, and so the response must reflect that, with substantial and sustained investment to narrow the gaps between the North East and the UK on measures like unemployment, growth and pay.
The North East a region of tremendous promise hampered by historic underinvestment, creaking infrastructure and deep socio-economic inequality.
The Chamber is a constant advocate on behalf of North East England and its business community, but it has never been more important to address these underlying issues and make genuine progress towards ‘levelling-up’ the economy and tackling the North-South divide.
Doing this right starts with taking an honest look at the current picture and highlighting where process needs to be made to allow the region to not only weather the storm of Coronavirus but be stronger and more resilient for decades to come.
How is the planning system adapting to the current circumstances? Dominic Crowley of Lichfields explains and introduces their Economic Recovery Framework to help regions get back on their feet.
As we all get used to doing business in these unusual times, the day-to-day reality of the planning process and the way development is brought forward have changed markedly – and with the Government’s decision to extend the ongoing lockdown, there is limited prospect of a return to normality any time soon.
Since the announcement of the lockdown, the national focus for the planning system has been to ensure business continues as usual, with planning applications continuing to be validated, processed and determined by the relevant Local Planning Authority (LPA). There has been a particular emphasis on ensuring the decision-making element of the process is not unduly delayed given its important role in supporting the function of the economy. This has been highlighted at the highest levels of Government decision-making, including through the most recent update from Steve Quartermain (Chief Planner at the Ministry of Housing, Communities and Local Government (MHCLG)). In his update, Mr Quartermain highlighted the importance of LPAs continuing to “provide the best service possible in these stretching times” noting that they should “prioritise decision-making to ensure the planning system continues to function, especially where this will support the local economy.” [1]
The key messages are therefore clear; work within the lockdown restrictions but keep the planning system moving, retain transparency in the decision-making process and ensure that a sufficient supply of flexible and high-quality planning permissions is in place to assist in addressing the economic fallout of the pandemic.
To allow business to continue as usual, one of the key measures introduced by the Government is the Coronavirus Act 2020. The Act gained royal assent on the 25th March 2020 and provides temporary legislation to help the country deal with the unprecedented demands brought about by the coronavirus outbreak. It contains a wide range of provisions including matters relating to food supply, emergency volunteers and NHS/local authority care and support. In terms of matters directly relevant the planning system, the Coronavirus Act and subsequent Regulations make provision for remote decision-making by Planning Committees. This will assist in overcoming the previous barrier set by legislation which required Councillors to be physically present at Planning Committee to determine planning applications.
LPAs are also being challenged to consider how they can continue to meet their publicity and consultation requirements on planning applications whilst working within the lockdown parameters.
The temporary legislation and measures in place seek to ensure planning applications can be validated, processed and determined without undue delay – and should effectively mean business as usual. Questions remain, however, as to how each LPA is responding to the ongoing crisis and what specific measures have been (or are being) put into practice at a local level to ensure that the planning system can continue to function.
As part of our ongoing response to the COVID-19 crisis we have been liaising with LPAs across the North East region to understand how they are implementing the new powers provided by the legislation. In summary, the majority of Councils in the North East are considering implementation of ‘Virtual’ Planning Committees to ensure key decisions can continue to be made. Some authorities, including North Tyneside, have also extended delegated powers to allow the Head of Planning to determine planning applications usually decided by planning committee. Almost all North East authorities also have measures in place to ensure that requirements to publicise and consult on planning applications will not unduly delay determination or result in a backlog once the lockdown ends [as of 20/4/20].
The position is rapidly changing, however, and it is important to remain live to the changing circumstances and associated opportunities and constraints.To assist with this, Lichfields has prepared a range of practical advice on how to maintain momentum in the planning system. This includes a live map for LPA COVID-19 planning responses across the country, an Economic Recovery Framework (designed to support local areas in developing their economic and policy response to COVID-19), guidance on consultation and engagement during lockdown and advice on Local Plan site promotion and Site Finding/Appraisals. Further information on these resources can be found here and our live LPA COVID-19 planning response tracker can be found here.
We remain in uncertain and challenging times, and the economic implications of the COVID-19 crisis are yet to be fully understood however, mechanisms are now in place to allow the planning system to continue to operate as normal.While challenges remain, and will continue to emerge, these mechanisms should be helpful to all businesses with development aspirations.
Please get in touch with Lichfields directly if you have any queries in relation to the current planning arrangements.
This blog has been prepared by Dominic Crowley, a Senior Planner at Lichfields’ Newcastle Office.
According to the Office for National Statistics, the North East employment and unemployment rates fared better in the year to April than the national average. This is not yet evidence of green shoots. Our regional businesses and the economy at large will continue to face the tests that a recession throws at all economies, and all labour markets. However, today’s labour market statistics lend weight to the argument that the North East economy has fared better than others in the UK during the course of the recession. This in turn reflects well on the resilience and resourcefulness North East businesses have needed during exceptionally tough times. This is something we must all take time to appreciate once the green shoots really do begin to show.