The geographical impact of the Covid-19 crisis for pre-cautionary savings, firm survival and jobs : evidence from the UK’s 100 largest towns and cities

Abstract

In this commentary we trace the economic and spatial consequences of the Covid-19 pandemic in terms of potential business failure and the associated job losses across the hundred largest cities and towns across the UK. The paper draws on UK survey data of 1500 firms of different size classes examining levels of firm-level pre-cautionary savings. On business failure risk we find a clear and unequal impact on poorer Northern and peripheral urban areas of the UK, indicative of weak levels of regional resilience, but a more random distribution in terms of job losses. Micro firms and the largest firms are the greatest drivers of aggregate job losses. We argue that spatially blind enterprise policies are insufficient to tackle the crisis and better targeted regional policies will be paramount in the future to help mitigate the scarring effects of the Covid19 pandemic in terms of firm failures and the attendant job losses. We conclude that Covid-19 has made the stated intention of the current government’s ambition to ‘level-up’ the forgotten and left behind towns and cities of the UK an even more distant policy objective than prior to the crisis.