By Peter Warrington
In this document I will look at the Cambridgeshire & Peterborough Local Economic Recovery Strategy as referenced by the mayor in his response, where I hope it will be able to shed some insight into how Cambridgeshire has been affected economically and how it has and plans to respond.
The report I explore in this document was but no longer is available at https://mk0cpcamainsitehdbtm.kinstacdn.com/wp-content/uploads/documents/Strategies/LERS/Cambs-Pboro-CA-Local-Economic-Recovery-Strategy.pdf, but is now seen in an updated form with notable differences at https://mk0cpcamainsitehdbtm.kinstacdn.com/wp-content/uploads/documents/Strategies/LERS/Local-Economic-Recovery-Strategy-March-2021-FINAL.pdf.
In the report’s foreword, the report references Cambridgeshire’s pharmaceutical and research industries and the role it has played in the national and international COVID response, for example Cambridgeshire being home to AstraZeneca who have developed an approved COVID vaccine.
Many employers in our region have also been directly involved in the national and international fight against the disease, from the global development and testing of vaccines, to uncovering effective medical treatments, through to the design and engineering of new ventilators for hospitals.
This reflects many of the same sentiments seen in responses to my questions and shows Cambridgeshire has played an important role.
The same section refers to problems that the job market could be faced by coming into the future, with young workers, students and experienced workers who have faced job loss all competing for jobs.
The report defines its core mission as:
“To lead the nation out of recession - by accelerating the recovery, rebound and renewal of our economy and achieving our ambition to double GVA [Gross Value Added] by 2042 - in a new and more digitally enabled, greener, healthier and more inclusive way than ever before.”
The report looks at the immediate economic impact on different areas of Cambridgeshire by looking at ONS national sector impact statistics. It indicates that Cambridge has been affected disproportionately compared to other Cambridgeshire districts, as shown in a graph from the report below.
It makes comparisons to the 2008 financial crisis and how Cambridgeshire was able to recover then, something I want to look at and is very useful in understanding the economic impact comparatively. It notes that the region had a very strong recovery compared to other areas recovering “much quicker”, albeit after 3-4 years of stagnation.
As for the more longer-term effects on businesses, it notes that where consumer demand is down businesses have struggled to grow, having few options but to “try to survive”.
It notes that many businesses, particularly in manufacturing and service industries, have found technological solutions to furloughed workers and will “not look to bring them all back”. This will likely contribute to higher unemployment in our region.
It also reports that 46% of business respondents to “combined local; and national surveys” reported that they had effectively shut down during the lockdown and that 17% reported there was a good chance they would not recover. It is unclear whether this refers to the picture nationally or locally, I presume it is the latter.
It estimates that 17% of jobs being “currently protected by furlough” face the possibility of becoming redundant, with 1,800 manufacturing jobs estimated to be at risk in our region.
Like I have done in my own research, this report looks at benefit claimant rates in the region, where it suggests it might take a while for the increased trend to recover and may rise in future.
It particularly highlights Peterborough’s claimant rate which has “worsened significantly compared to that of Great Britain”, whereas areas in the south of the region have seen “relatively low increases in claimant count compared to the country as a whole” with a “slight worsening” in Fenland compared to nationally. The north of Cambridgeshire was already an area facing “Skills deficits and lower quality employment” according to the report.
Something I found particularly shocking in the report are its estimates for the mental health impacts of the pandemic in Cambridgeshire:
“We estimate that a possible 19,000 adults could develop anxiety and 59,000 develop depression (a 104% increase) from the impacts of social and economic restrictions alone with 18% of people experiencing unemployment developing mental ill health as a result”
It also refers to young people in the job market, warning that they are overrepresented in at-risk sectors in a labour market with less “entry level opportunities and opportunities for progression into higher wage roles”. Additionally, it notes that:
“The numbers of JSA claimants aged 16-24 has risen from 95 by 263% to 290 between March and September, compared to 186% nationally. If we combine this with the number of young people claiming Universal Credit and seeking work then the figure for September was 5,400 claims from 16–24-year-olds, with a growth of 143.8% since March compared to nationally 121.9%.”
It warns that this “will have ramifications for the local labour market for decades to come”
The report indicates a variety of concerns about how Cambridgeshire has been affected economically and how it will continue to be affected into the future. I note some of these in bullet-points below:
Cambridgeshire’s large pharmaceutical and research sectors have seen growth through the pandemic, being “directly involved in the national and international fight against the disease”.
Cambridgeshire faces a competitive job market into the future, with young workers, students and experienced workers who have faced job loss all competing for jobs.
Sector-specific data indicates that Cambridge has been affected disproportionately compared to other Cambridgeshire districts.
During the 2008 financial crisis, Cambridgeshire was able to recover “much quicker” than other areas after 3-4 years of stagnation.
Cambridgeshire businesses have struggled to grow, focusing on trying to survive.
Statistics indicate that Cambridgeshire has seen more unemployment compared to other areas.
46% of Cambridgeshire businesses have effectively shut down, with 17% indicating there was a good chance they would not recover.
17% of jobs protected by furlough in Cambridgeshire are at risk.
Areas in the north of Cambridgeshire such as Peterborough have suffered disproportionately compared to areas in the south, already facing a skills and employment quality deficit.
“19,000 adults could develop anxiety and 59,000 develop depression the impacts of social and economic restrictions”
16-24 year olds are overrepresented in at-risk sectors in this region compared to other areas while facing less opportunities to enter into and further progress in the job market.
18% more 16-24 year olds in Cambridgeshire have claimed unemployment related benefits compared to the picture nationally.
It warns that the effects of the pandemic on young people in the job market will “have ramifications for the local labour market for decades to come”
The report paints a picture of Cambridgeshire as an area that has seen a varied response to the pandemic. It’s one that has seen growth in some industries and has historically recovered well to previous crises, but faces a competitive job market with a high unemployment rate. As people have alluded to in their responses to my questions, Cambridgeshire has experienced the effects of the pandemic in a varied and nuanced way, different industries, demographics and geographic areas facing the effects differently. That being said, I think it can generally be argued that many of the main of the key economic indicators indicate that many Cambridgeshire areas have borne the effects of the pandemic noticeably worse than other areas, where it seems this is likely true for Cambridgeshire as a whole.