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Bright Blue, the independent think tank for liberal conservatism, has today published new analysis, entitled Widening chasms, showing that the Covid-19 pandemic is exacerbating geographical inequality in England, with London boroughs and the most deprived local authorities of the country experiencing the biggest rise in Universal Credit claimants, undermining the Government’s levelling up agenda.  

The analysis compares the increase in the working-age population who are claiming UC between February and October 2020 in each English local authority with each local authority’s ranking in both the 2019 Index of Multiple Deprivation and 2019 Index of Education, Skills and Training.

This analysis is unique in two ways. First, it uses the latest available data on UC claimants, which is from October 2020. Second, this analysis goes beyond examining only increases in unemployment by English local authorities, by looking at overall increases in UC claimants, meaning it captures both those who have become unemployed but also those still in work who have lost hours or income and now need to claim UC.

The main findings from this analysis are:

  • The 10% most deprived English local authorities have seen on average an 8.5%-point increase in working age population claiming UC in the first eight months of the pandemic, as opposed to an average 4.8%-point increase for the 10% least deprived English local authorities.
  • London boroughs have seen an average 8.3%-point increase in the working age population claiming UC during the first eight months of the pandemic as opposed to an average 6.3%-point increase in all other English local authorities.
  • 12 of the 20 English local authorities with the highest increases in UC claimants in the first eight months of the pandemic were in London.
  • The English local authorities in the top 20 that have seen the greater increases in UC claimants in the first eight months of the pandemic outside of London include coastal towns and post-industrial communities such as Blackpool, Middlesbrough and Hull.
  • The 10% most educationally deprived local authorities saw an average 7.7%-point increase in the working age population claiming UC, as opposed to a 5.3%-point increase in the 10% least educationally deprived. This indicates that those English local authorities experiencing higher rates of UC claimants are also those less likely to be able to bounce back quickly with increased employment outcomes, since there is a strong correlation between those with higher educational attainment and a shorter period of time spent in unemployment

Anvar Sarygulov, Senior Research Fellow at Bright Blue and analysis author, commented:

“English local authorities that already faced higher deprivation are more likely to have experienced larger increases in the proportion of their working-aged population claiming Universal Credit during Covid-19, widening existing geographic inequalities. The pandemic really has made ‘levelling up’ a lot harder.

“There is also a clear relationship between local authorities experiencing higher rates of UC claimants and having lower levels of education and skills among their population. These English local authorities are therefore less likely to be able to bounce back quickly with increased employment outcomes. This really does threaten to undermine government attempts to ‘level-up’ so-called left-behind areas of the country over the long-term.”