Recommendation 1

HM Government Acknowledged

We recognise that the impacts of covid-19 to date have been significant on health, the economy and our society. We accept that the impact of covid-19 is likely to have repercussions for public policy making, both in terms of overcoming challenges which were unanticipated prior to 2020 and then also drawing upon new possibilities that may manifest themselves, for some years into the future. As we are sure the Select Committee will recognise, the immediate focus of policy making in the last eighteen months has been to support individuals and businesses through the pandemic and then to promote the quickest recovery. We believe that strong progress has been made in that regard but, nonetheless, there is no doubt that understanding the long- term implications of covid-19 for our country will be important in future policy-making, including on levelling up. The Select Committee is absolutely right to highlight that the implications of covid-19 may not be known for some time but, nonetheless, at the core of the levelling up agenda is the desire to ensure that the whole of the United Kingdom can benefit from the same opportunities and that policy imperative remains. It is important, therefore, to note the changed base from which we start from as a result of the last eighteen months when considering the development of future policy. We are also closely monitoring any emerging health implications of covid-19. Separately, emerging economic examples of this phenomenon include how covid-19 has catalysed and accelerated some existing trends which will impact the economic geography of the country, notably an increase in home working and a shift to online shopping. For example, the pandemic more significantly affected cities with large travel to work areas, all across the country, given the dramatic loss in commuters. A reduction in tourism also had significant implications for some areas at times during the pandemic although, as we know, many domestic areas were also in high demand at points when the leisure and tourism sector re-opened. While national spending has recovered to pre-crisis levels, a larger share is now going to online and local retailers, whilst many traditional high street locations have struggled. The labour market impacts of this reduced economic activity are being felt, particularly in some of our largest cities, and can be seen by increases in claimant counts in those areas. The long-term impact of covid-19 on cities and urban areas will depend on how persistent these recent changes in business and consumer behaviour turn out to be. We continue to closely monitor the situation and we are undertaking a programme of work to understand the nature and potential extent of structural shifts in the economy to feed into the levelling up agenda. This includes work to understand the non-uniform impacts on different places, people and firms, both in the short-run and potential longer-term impacts affecting the economic geography of the UK. We recognise the importance of factoring analysis of the impact of covid-19 into the planning for, and delivery of, the levelling up agenda, and welcome your recommendation on this matter. That is why the Cities and Local Growth Unit within BEIS and the Department for Levelling Up, Housing and Communities (DHLUC) has been, and will continue to, work closely with the joint DLUHC-Cabinet Office Levelling Up Task Force to ensure the planning and delivery of the levelling up agenda takes the impact of covid-19 into consideration.