Brexit and the pandemic have set back years of progress to develop the North East economy, a new report reveals.
The annual state-of-the-region report from the North East LEP reveals the area’s economy suffered ‘profound impacts’, with the pandemic and Brexit resulting in challenges “that will take many years to address”.
The LEP has also revealed that the impacts of the pandemic have fallen most heavily on those that were already disadvantaged, including young people, the unemployed and people in low pay jobs, and women.
Read more: go here for more North East business news
The report reveals how a number of measures tracked by the LEP to show the region closing the economic gap on the rest of the UK have gone into reverse during the pandemic. Areas such as productivity, business start-ups and the number of firms scaling up have all fallen back in the last year.
Officials at the LEP produced a special report on the impacts of the pandemic and Brexit to sit alongside its regular annual review of the economy, saying the economic shock caused by Covid has been ‘unprecedented’ in terms of rising unemployment and hardship felt by many households.
The report says: “The current livelihoods and future prospects of these people have been impacted most by rising unemployment and reduced incomes during furlough. There is a need to support these most disadvantaged groups by supporting people back into work, and by providing help to improve skills to secure better paid work in growing sectors of the economy.
“There in an important role for the VCSE (voluntary, community and social enterprise) sector and for local authorities in particular in helping to address these issues. As well as local support and intervention, this will require lobbying UK Government to provide additional targeted investment to support the most deprived target groups and communities in the region to improve opportunity and prosperity, delivering on the levelling-up agenda.”
The LEP review highlights that the decline in the economy during the pandemic had not been as severed as first feared and that business activity is beginning to bounce back.
But it warns that recent difficulties in supply chains and increasing costs for businesses are providing a new problem for businesses looking to recover from the last 18 months.
In 2014, the LEP set itself the target of bringing 100,000 more and better jobs to the region by 2024. Having been ahead of that target pre-pandemic, the number of jobs in the region’s economy declined by 9,500. Numbers of higher-paying jobs were more resilient, however.