Rural areas most vulnerable to economic impact of coronavirus

A new report has found that rural areas are most vulnerable to the economic impact of coronavirus, with almost six million people in county areas working in ‘at risk’ job sectors.

The report from Grant Thornton UK LLP for the County Councils Network concludes that county areas are potentially more vulnerable to the economic impact of the virus compared to England’s major cities, arguing that the pandemic will exacerbate this divide without quick targeted investment and major new powers for counties to drive recovery plans in the longer-term. The vast majority are projected to have an GVA decline greater than the national average.

With 3.5 million employees in the 36 counties featured in the study currently furloughed, county leaders fear that a significant number of those people will not have jobs to go back to once the scheme ends in October and have called on the government provide them with devolved powers to protect employment.

The report, ‘Place-Based Recovery: How counties can drive growth post COVID-19’, reveals that seven out of the top ten areas with the highest percentage of roles in sectors at risk are ‘red wall’ places, including Cumbria (62 per cent of all jobs), Derbyshire (60 per cent), and Durham (58 per cent), areas which they government has focused on.

However, the report’s analysis warns against a narrow focus on these areas, with 34 out of 36 counties above the national average for jobs in sectors at risk including those with a heavy reliance on tourism and retail such as Cornwall (60 per cent), Dorset (58 per cent), and Devon (56 per cent).

The paper recommends that targeted investment needs to focus on the county areas identified to help narrow the gap between high-growth areas and those with lower growth, otherwise the pandemic will exacerbate the divide between the major cities and England’s shire counties that the government’s ‘levelling-up’ agenda sought to address.

David Williams, chairman of the County Councils Network, and leader of Hertfordshire County Council, said: “The scale of the economic challenge posed by coronavirus cannot be overstated and today’s research illustrates how exposed county areas are with over half of those areas’ workforces currently in sectors ‘’at risk’. We fear a significant number of those furloughed will not have employment to go back to unless we act now. There is a real risk the pandemic simply exacerbates the longstanding economic divide between county areas and the major cities, with urban metro mayors having more powers and resources at their disposal to address the impact of coronavirus.

“County authorities must be a central part of the economic growth jigsaw, alongside the Government’s ‘Plan for Jobs’ and efforts from business and the education sector. Each area will have differing needs, and we know our residents and businesses well. Restructuring councils with devolved powers to new and ambitious unitary authorities will allow us to grasp the ‘levelling-up’ nettle and provide hope to our communities.”

Paul Dossett, head of local government, Grant Thornton UK LLP, said: “Covid-19 has had profound and significant social, health and economic impacts across the country; impacts that have changed behaviours, disrupted markets and placed enormous pressure on public services. The scale of the economic disruption has demanded a fundamental rethink around economic development and growth.

“Our research shows the critical leadership role that county authorities can play in driving UK economic recovery, but also outlines the ongoing and unique challenges that these areas face. While Covid-19 has affected all parts of the country, the impact plays out very differently across different demographics and geographies. How particular vulnerabilities are managed and mitigated, and economic opportunities maximised, will look very different around the country.

“Effective recovery therefore demands an intimate knowledge of place. Covid-19 initially required a central response to managing the spread of the virus but, as we move from managing the crisis to managing the recovery, powers and decision making need to filter back to local places enabling them to take action on those issues or opportunities most pertinent to their area.”