Show Hide image Economy 4 December 2020 The vulnerabilities of tier three England: more deprived, more at risk Two-thirds of tier three councils have suffered cuts to their spending power since 2015. By Ben Walker Follow @BenNHWalker Sign UpGet the New Statesman’s Morning Call email. Sign-up The government’s new tiering system for England has received mixed reviews from voters, and has sharply divided those living under tier three – the parts of England considered most susceptible to the spread of Covid-19. In a recent poll taken by Savanta ComRes, 46 per cent of voters living in the local authorities caught in tier three say they regard the new system as fair, while 44 per cent think it unfair. This is a stark difference to those in the less strict tier two areas, where the proportion who believe the system to be unfair is 27 per cent. The resentment from a great many tier three residents about the new measures is understandable when, in some instances, a tier two restaurant or pub serving sit-down food and alcohol is a 20-minute ride away. The impact of the tier three measures – as both a break on the spread of coronavirus, and as a drag on the local economy – is yet to be determined. However, we do know something about the characteristics of tier three areas: the kind of places they are, and the things they have (or don’t have) in common. It should be no surprise that Covid-19 has a greater chance of spreading in densely populated regions, and the parts of England in tier three are as a whole marginally more crowded than their tier two counterparts. But many of them are not; and conversely many of them score surprisingly low for Covid prevalence and severity, according to a New Statesman analysis. We do know that in many ways tier three local authorities are more likely to have pre-existing economic and social challenges than their tier two counterparts. Residents are more likely to self-report bad health and to suffer from a range of serious health problems, and at an earlier age. Many of these are lifestyle-related – and a stricter lockdown, bringing with it reduced personal mobility and an increased consumption of junk food, is hardly likely to help. Tier three local authorities are also disproportionately likely to have high levels of deprivation, be that through education or poor job opportunities, according to the latest Indices of Multiple Deprivation, published by the Ministry for Housing, Communities and Local Government (MHCLG). Overall, the average tier three local authority faced more social and economic challenges than the national average even before Covid struck. At the same time, local authorities in those areas have less money – and therefore scope to help their residents – than before. Two-thirds of tier three councils have suffered cuts to their local spending power since 2015, leaving local leaders with fewer services and resources in a time of national crisis. Burnley and Hyndburn, two local Lancashire boroughs that still have above-average Covid case rates, have had their spending power cut by 12 per cent and 13 per cent respectively. The amount of money these councils have been able to spend on their residents, according to MHCLG data (comparing 2015 to 2019), has been cut by over and above the national average. The overall economic hit caused by the new Covid restrictions will vary between areas, and is dependent on a number of factors. One of these is the employment mix of the local authority in question. Those that are more dependent on the accommodation and hospitality sectors, for example, are likely to see greater suffering. While there are currently 680,000 people working in those industries in tier three areas – and these people are particularly vulnerable – on average tier three areas are less reliant on accommodation and hospitality jobs than tier two areas. One striking aspect of this chart is that there is a huge variance among tier three authorities. Some are highly reliant on jobs in accommodation and food, while in others it is a very small part of the employment mix. Take Leeds and Nottingham. The part of the economy forced to remain closed in these areas represents between just 5 and 6 per cent of those currently in work. But in the coastal towns of Blackpool and Skegness, it's a different story. More than one in ten jobs in Blackpool, and nearly one in five in East Lindsey (which includes Skegness, Louth, and the East Lincolnshire surrounds) is geared towards food and accommodation. (It should be noted in passing that these figures are seasonally adjusted.) [See also: How fair are the new Covid-19 tiers?] At this point we might reason that, while things are very tough for businesses in places such as Skegness and Blackpool, the extension of the furlough scheme and other government support should mean that most individuals in most tier three areas get through this period. Unfortunately, it isn’t that simple. It isn’t only whole sectors like food services and accommodation that are vulnerable to Covid restrictions; the individual jobs are vulnerable, too, and not only in coastal towns. A huge proportion of workers in the hospitality sector work part-time, particularly in places such as Teesside, Tyneside, the Black Country, Hull and South Yorkshire. Overall, tier three areas are more likely than tier two areas to have a higher proportion of part-time (rather than full-time) service sector jobs. Why does this matter? A part-time worker is more likely to be on a zero-hours’ contract than someone on full-time hours, particularly in the hospitality sector. And because zero-hours workers can only be furloughed for one job, the likelihood is that they will move on from their place of work to look for an immediate alternative route to employment. Just look at the evidence from the original national lockdown: of the industries to see a drop-off from their payroll between April and August, the hospitality sector was one of the worst hit. Some 15 per cent of those who were on a pub or restaurant’s payroll in April had, by the time their furlough ended in July, left their job, either voluntarily or through redundancy. This compares to just 8 per cent for those working in retail. So while some tier three areas may have relatively small numbers of people employed in highly exposed sectors, these individuals are disproportionately likely to be part-time, and therefore more vulnerable. And these relatively small numbers add up: as we said, 680,000 people work in accommodation and food services across the UK’s tier-three areas. Life was already hard for much of tier-three Britain; it’s about to get a lot harder. [see also: “I’ve never relied on anyone in my life”: Covid-19 and the new Universal Credit claimants] Ben Walker is a data journalist at the New Statesman. Subscribe For daily analysis & more political coverage from Westminster and beyond subscribe for just £1 per month!