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New Centre for Cities report shows unequal post-pandemic savings and debt in cities across the UK

COVID-19, Poverty and Inequality · 30 June, 2021

A report published last week by the Centre for Cities demonstrates widening inequalities between richer and poorer areas of the UK. Many in less affluent areas, especially in the North and the Midlands, are facing a disproportionately large debt burden, meaning bounce-back from the pandemic will be uneven.

The report, An Uneven Recovery, highlights the geographical inequality in the way that so-called ‘Covid-savings’ and Covid-related debt have fallen across the UK. Urban areas throughout the UK have seen widening inequalities, but Covid-related debt is disproportionately clustered in the North and Midlands. Fewer than 3% of neighbourhoods in Exeter have been pushed into debt, whereas in Hull, almost one in two neighbourhoods have taken on new or increased debt. And, for every £1 decrease in spending in less affluent areas, there has been a £12 spending save in richer areas, sharpening pre-existing inequalities in savings across the UK.

In Liverpool, more than 70% of neighbourhoods are among the poorest in the country. Almost 50% of neighbourhoods in Liverpool have been pushed into debt during the pandemic. To contrast, Milton Keynes is made up of predominantly affluent neighbourhoods. Fewer than 20% of its neighbourhoods have taken on new debt. This report once again makes it clear that the poorest have been hit the hardest as a result of the pandemic.

These areas in the North and the Midlands are vital to a post-pandemic levelling-up agenda. It will be impossible to secure an equal and just recovery which addresses regional inequalities in the UK without a solution to the debt which has clustered in less affluent areas in the North and Midlands.

The Bank of England is predicting a surge in spending as a result of Covid-savings. But given that savings and new debts are so unevenly spread throughout the country, this recovery will surely be geographically uneven. Some of our communities will benefit from the ‘champagne cork’ effect of clustered savings, but others will be locked into pandemic finances by long-term debt.

If we’re going to ‘level up’ our communities and neighbourhoods across the UK, we need to address the burden of debt which is disproportionately weighing on some communities. It’s not right that inequalities in the UK have widened so dramatically during the pandemic.

Supporting people to pay off debts incurred as a result of Covid-19 is vital in securing an equal and long-lasting recovery, and one which addresses the geographical inequalities exacerbated by the pandemic. That’s why we’re calling for a debt jubilee – a write-off of Covid-related debt to give families a stable platform from which to face the future. It’s the only solution to Covid-related debt which addresses the seriousness and magnitude of the issue.

Read the full Centre for Cities report

Filed Under: COVID-19, Poverty and Inequality

Hannah Brown

I am the Campaigns and Church Engagement Officer for JPIT. My role involves working with the team to ensure that our campaigns are run effectively, and helping to empower local churches to engage with social justice and effective change-making. I have a background in local church partnership and engagement, and enjoy exploring how we communicate for effective change. I am particularly excited to see how JPIT can empower the church to be a voice of hope and transformation, particularly for those marginalised and disempowered by the systems of society.

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