COUNCIL’S LATEST ECONOMIC BRIEFING NOTE

Please find below a precis of the latest Economic Briefing Note.

Headlines

The discretionary grant scheme for businesses is to launch on Monday 1st June 2020, which will see LCC awarding grants to businesses and charities across the city who have not already benefited from COVID-19 funding. Eligible applicants will need to occupy a property, or part of a property, with a rateable value of below £51,000, or have annual rent or mortgage payments below £51,000. Applicants must have fixed property costs of at least £8,000 per annum. Business and local charities will be able to apply for up to 50% of their fixed property costs, up to a maximum of £10,000, over a six-month period starting from 11th March 2020.

The Council continues to pay out grants to those who qualify either through the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund immediately. The latest figures available (Thursday 28th May) indicate a total of 11,147 grants valued at £137,630,000 had been paid. The Council is continuing to work through the more complex cases ensuring monies are paid as quickly as possible.

 

Third Sector Leeds has been coordinating work to gather intelligence about the impact of COVID-19 on Third Sector organisations. Their sector resilience survey shows that c. 60% of survey respondents report that they may not be able to continue in business past the end of the year.

Traffic flows are continuing to increase across all monitored sites. On average, traffic flows were up 11% on last week, with peak flows (morning and afternoon rush hours) up 9% and 13% respectively. Bank Holiday Monday (25th May 2020) saw traffic down 37% on 2019, but 76% higher than the Easter Bank Holiday Monday earlier this year.

Figures from the Treasury have stated that 8.4 million workers are now covered by the Government’s Coronavirus Job Retention Scheme, up from eight million a week earlier. HMRC also said that one million employers had claimed £15bn for the 8.4million furloughed employees between 20th April 2020 and 24th May 2020. Another 2.3 million self-employed workers have made claims under the separate Self-Employment Income Support Scheme, at a cost of £6.8bn.

The Government has confirmed a new funding package of £300m for local authorities to work with them to support test and trace services in their local communities. The funding is being provided to all local authorities in England for them to develop and action tailored outbreak control plans to reduce the spread of the virus in their area, working with local NHS and other stakeholders. Work will build on the continued efforts of communities to respond to the pandemic locally.

Good News Stories

 

Coordinated by Leeds City Council, a scheme has been set up to provide thousands of free tickets, discounts and special events for NHS and frontline workers across the city as a special thanks for their efforts during the COVID-19 pandemic. So far, 68 of Leeds’ cultural and sporting organisations have joined the scheme, including Leeds United, Leeds Rhinos, Yorkshire County Cricket Club, First Direct Arena, Henry Moore Institute and Phoenix Dance Theatre. Several other local businesses and organisations have also pledged to thank frontline workers, including theatres, museums, cinemas, festival and galleries. When it is safe to open such organisations, thousands of offers will be made available for NHS and frontline workers. To access the offers workers will need to keep an eye out on social media for the hashtag #LeedsSaysThanks. If any other local businesses or organisations wish to pledge their support by sharing offers, they can do so by also using the hashtag.

Swarthmore Education Centre has received £5,000 from the National Lottery Community Fund to promote wellbeing with an Art in Isolation project. The centre, which is in Woodhouse Square, Leeds, will use the funding to provide free art suppliers and art tuition to those experiencing isolation due to the current coronavirus pandemic. It will also host a celebratory ‘Freedom’ exhibition once the centre is allowed to reopen. The centre has been providing education to Leeds communities since 1909, offering a safe and inclusive environment for adults to access a range of courses, including first steps education, arts and leisure, alongside offering affordable city centre room hire and a café.

 

Leeds-based Social has been appointed to lead a national campaign to encourage sewers to make face coverings. The Big Community Sew campaign has mobilised thousands of home sewers following Government advice to consider wearing face coverings in enclosed spaces where social distancing is not possible.

Researchers from the University of Leeds are among a team of academics who have been awarded £618,000 to investigate how the benefits system is responding to the coronavirus pandemic. The project will examine whether people receiving benefits such as Universal Credit get the income and employment support they need as the crisis unfolds. The grant is funded by the Economic and Social Research Council as part of UK Research and Innovation’s rapid response to COVID-19. The project, which will be led by the University of Salford, working in collaboration with the University of Leeds, LSE and the University of Kent, will include a survey of 8,000 new and existing benefit claimants. In-depth interviews will be carried out with c. 80 people who will share their experiences over time, as well as case studies looking at support providers in Leeds, Newham, Salford and Thanet. Dr Daniel Edmiston, Lecturer in Sociology and Social Policy at the University of Leeds, is leading a key stream of work for the project.

Creative agency McCann Leeds, in collaboration with the Ahead Partnership and with support from LCC, Channel 4 and the University of Leeds, has launched a new competition inviting Yorkshire’s young people to come up with an advert to welcome people back to the Leeds once lockdown measures are lifted. The Welcome Back Project is open to those aged 11 to 19 and entrants need to come up with an idea for an advert (e.g. poster, poem or video). The winning work will be displayed around Leeds city centre, including in Millennium Square, for visitors to see over the summer months once restrictions have been lifted. Entrants will be judged by a panel that includes Councillor Judith Blake and Kevin Blacoe, Head of Partnerships at Channel 4. The completion is now open and closes on 12th June 2020

 

Business Intelligence

 

LEP / WYCA analysis

 

The number of West Yorkshire companies with high risk credit ratings continued to increase in early May 2020, rising by 17% from 4,700 on 28th April 2020 to 5,500 on 19th May 2020, according to data from Bureau van Dijk’s FAME business database.

In April 2020 there were 108,000 jobless claimants in Leeds City Region, with 87,900 claimants in West Yorkshire. Between March 2020 and April 2020 the count increased by 41,200 (+62%) across the City Region and by 30,800 (+54%) across West Yorkshire, lower than the increase seen nationally of 66%.

Districts with the lowest unemployment before the crisis saw the biggest percentage increases – Craven (+172%), Harrogate (+158%), York (+141%), Selby (+116%). These are all in York/North Yorkshire and rely more strongly on shutdown sectors like retail and hospitality.

West Yorkshire districts fared better in percentage growth terms, ranging from 44% in Bradford and 61% in Wakefield. However, these districts already had relatively high levels of unemployment and so their increases were the largest in absolute terms, ranging from 2,800 in Calderdale to 10,800 in Leeds.

The impact of COVID-19 on the Third Sector in Leeds

Third Sector Leeds, the strategic body for the Third Sector, has been coordinating work to gather intelligence about the impact of COVID-19 on Third Sector organisations and to capture the key positives.

A sector resilience survey shows that c. 60% of survey respondents report that they may not be able to continue in business past the end of the year. Other key findings include that although the sector has adapted well, smaller organisations and trading organisations may be at particular risk. There has also been a significant (almost two-third) drop in people regularly volunteering with organisations and organisations have sought to retain their employees, reducing their headcount by c. 20%, with around a third of organisations having accessed the furlough scheme. However, many grant funders and commissioners have been extremely flexible and there is appetite in the sector to capture new flexibility and develop new business models.

It is thought that the Third Sector in Leeds may look very different in the future and as a result of this, Third Sector Leeds has set out some suggested actions that could be taken and intend to work with a range of partners to shape the short- and medium-term response to the challenge. Working closely with strategic partners, including Leeds City Council, Third Sector Leeds will be convening a Bronze Group to consider sector resilience which will feed into the Third Sector Partnership and enable tangible actions to be taken forward.

The Resolution Foundation – Macro Economic Policy Outlook

The Resolution Foundation has published its Macro Policy Outlook for quarter two of 2020. In it, they bring together the insights from new research into the impact of the coronavirus on the economy with the latest data on its effects, in order to draw out lessons for policy makers.

There are three key points from the report:

While the Government-imposed lockdown has clearly had an unprecedented effect on economic activity, evidence of concern amongst workers about catching the virus means that even a full relaxation of the lockdown would not lead to a rapid return to business as usual.

While much attention has been paid to the effects on the supply and demand sides of the economy, the reality is that both will be affected and policy makers need to respond in different ways as the crisis unfolds. It is also not just the size of the hit to demand and supply that is important in informing policy, but also its distribution. Given this, it is worrying that workers in the worst-affected sectors are disproportionately on lower pay.

While there are a number of ways the economic crisis could be amplified, the good news is that for the most part those risks do not appear to be crystallising so far. That said, there is already evidence of an unprecedented increase in saving and the extent to which that continues will be a key factor in determining the strength of the recovery. This means that it is crucial that policy makers remain focused on the risks.

London School of Economics’ Centre for Economic Performance – ‘COVID-19 and Social Mobility’

LSE’s Centre for Economic Performance has found that the unprecedented economic and educational shocks of the COVID-19 pandemic could inflict long-term damage to young people’s prospects in life. The ‘COVID generation’ (those currently under the age of 25) face declining social mobility unless bold moves are made to create a fairer society, including a job guarantee scheme for those facing long-term unemployment and catch-up tutoring for disadvantaged children.

The report also highlights that before the crisis younger generations were already facing falling real wages, fewer opportunities and stagnant or declining living standards. Now that the crisis has drastically worsened economic and education inequality, young people are even less likely to fare better than past generations, less likely to climb the income ladder and less likely to fulfil their potential regardless of their background. There is concern that these inequalities could become entrenched for some time.

Employment and Skills Support

The service supported 100 people into work in the period 23 March to 30 April across all sectors with the largest numbers in health and care, food retail, logistics, distribution and transport.

The service has led a successful bid with Bradford Council to secure a £2.91m ESIF funded programme to deliver support across Leeds and Bradford with a focus on young people (15- 24) identified as NEET. Support will be targeted to young people with poor mental health including those with emotional, behavioural and social difficulties to secure training and work. Delivery will commence in July 2020 and run until September 2023.

With social distancing measures still in place for adult learning courses, a smaller number of courses than usual are being delivered on-line. Work will continue throughout term 3 to enhance the capacity of providers to deliver on-line through our established Google Classroom facility with over 200 adult learning tutors undertaking additional training. This will enable a blended delivery of provision when lockdown measure are lifted.

An invitation to tender for the Adult Learning programme in the academic year 2020/21 will be issued in June and preparatory work is now being progressed to respond to the proposed new arrangement for devolved funding in 2021/22 should the Mayoral Combined Authority scheme be approved.

Health and Care sector recruitment

The We Care Academy recruitment programme began in April 2020 and is set to continue into June 2020. The current campaign includes a range of roles within the sector: home care, supported living and residential care. Full training is provided and applications are actively encouraged from individuals whose jobs have been affected by COVID-19. The numbers of applicants to the recruitment programme is to be confirmed, as is the impact of the recruitment programme once this has concluded.

Online skills packages from LCR LEP and WYCA

The LCR LEP and the West Yorkshire Combined Authority have launched the first part of a programme of support to help workers and young people develop new skills during lockdown. The online package includes free digital skills courses through the [re]boot programme and new remote learning resources for parents and teachers to improve the employability of young people through the FutureGoals Remote initiative. Further information can be found here.

Business Support Measures – delivered locally

Grants

The Council continues to pay out grants to those who qualify either through the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund immediately. The latest figures available (Thursday 28th May) indicate a total of 11,147 grants valued at £137,630,000 had been paid. The Council is continuing to work through the more complex cases ensuring monies are paid as quickly as possible.

The discretionary grant scheme for businesses is to launch on Monday 1st June 2020, which will see LCC awarding grants to businesses and charities across the city who have not already benefited from COVID-19 funding.

Eligible applicants will need to occupy a property, or part of a property, with a rateable value of below £51,000, or have annual rent or mortgage payments below £51,000. Applicants must have fixed property costs of at least £8,000 per annum.

Business and local charities will be able to apply for up to 50% of their fixed property costs, up to a maximum of £10,000, over a six-month period starting from 11th March 2020.

The scheme will see £7.795m made available, which equates to 5% of the original amount the Council was given for the initial business grant scheme. 10% of the funds available will be ringfenced for applications from local charities who occupy one property with a rateable value up to £15,000.

All businesses and charities will be required to make an application for a grant via https://www.leeds.gov.uk/coronavirus/apply-for-a-discretionary-grant when the scheme officially launches on Monday 1st June 2020.

The scheme will be open for four weeks and may be closed earlier should the demand and interest from eligible grants outweigh the amount of money the Council has been provided to distribute. The Council will aim to process applications within 20 days, but this will be dependent upon the levels of demand experienced and on the correct information being submitted by applicants.

Business Support Measures – delivered nationally

Government sets out timeline for retail businesses to reopen in June 2020

The Government announced at the start of this week that thousands of high street shops, department stores and shopping centres across England are set to reopen next month once they are COVID-19 secure and can show customers will be kept safe.

Outdoor markets and car showrooms are able to reopen from 1st June 2020, as soon as they are able to meet the COVID-19 secure guidelines to protect shoppers and workers. As with garden centres, the risk of transmission of the virus is lower in these outdoor and more open spaces, where it is generally easier to apply social distancing.

All other non-essential retail, including shops selling clothes, shoes, toys, furniture, books and electronics, plus tailors, auction houses, photography studios and indoor markets, will be expected to be able to reopen from 15th June 2020 if the Government’s five tests are met and they follow the COVID-19 secure guidelines.

Businesses will only be able to open once they have completed a risk assessment, in consultation with trade union representatives or workers, and are confident they are managing the risks. They must have taken the necessary steps to become COVID-19 secure in line with the current Health and Safety legislation.

COVID-secure guidelines have been published for people who work in or run shops, branches and stores, after consultation with businesses, union leaders, Public Health England and the Health and Safety Executive. The guidance can be found here. Local authorities are asked to continue to carry out spot checks and follow up on concerns by members of the public.

As per the Government’s roadmap, hairdressers, nail bars and beauty salons, and the hospitality sector remain closed because the risk of transmission in these environments is higher where long periods of person-person contact is required.

Government launches NHS Test and Trace service

The Government has launched its NHS Test and Trace service, with new guidance meaning those who have been in close contact with someone who tests positive must isolate for 14 days, even if they have no symptoms. Anyone with symptoms will be tested and their close contacts will be traced. The service was launched on Thursday 28th May 2020.

Anyone who tests positive for coronavirus will be contacted by NHS Test and Trace and will need to share information about their recent interactions. This could include household members, people with whom they have been in direct contact, or within two metres for more than 15 minutes. People identified as having been in close contact with someone who has a positive test must stay at home for 14 days, even if they do not have symptoms. If those in isolation develop symptoms they can book a test at nhs.uk/coronavirus or by calling 119. If they test positive, they must continue to stay at home for seven days or until their symptoms have passed. If they test negative, they must complete the 14-day isolation period. Members of their household will not have to stay at home unless the person identified becomes symptomatic, at which point they must also self-isolate for 14 days.

 

£300m addition funding for local authorities to support new test and trace service

 

The Government has confirmed a new funding package of £300m for local authorities to work with them to support test and trace services in their local communities. The funding is being provided to all local authorities in England for them to develop and action tailored outbreak control plans to reduce the spread of the virus in their area, working with local NHS and other stakeholders. Work will build on the continued efforts of communities to respond to the pandemic locally.

 

Work on the plans will start immediately. They will focus on identifying and containing potential outbreaks in places such as workplaces, housing complexes, care homes and schools. As part of this work, local authorities will also need to ensure testing capacity is deployed effectively to high-risk locations. Data on the virus’ spread will be shared with local authorities through the Joint Biosecurity Centre to inform local outbreak planning.

Work will be led by local authority leaders and local directors of public health in charge of planning and will build on their work to date to respond to the coronavirus locally. They will operate in close partnership with local hospitals, GP practices, businesses, religious groups, schools and charities.

A new National Local Government Advisory Board will be established to work with the test and trace service. This will include sharing best practice between communities across the country. Work to share lessons learned will be led by a group of 11 local authorities from across the UK, representing rural and urban areas, who have volunteered to help localise planning. They includes Tameside (lead for Great Manchester Combined Authority); Warwickshire (Coventry and Solihull, connecting to West Midlands Combined Authority); Leeds (lead for Leeds City Region); London (led by Camden, with Hackney, Barnet and Newham); Devon (with Cornwall); Newcastle (with Northumberland and North Tyneside as lead for North of Tyne Combined Authority); Middlesbrough (with Redcar and Cleveland as lead for Tees Valley Combined Authority); Surrey; Norfolk (with Norwich and districts); Leicestershire (and Leicester with Rutland); and Cheshire West and Chester (with councils within Cheshire local resilience forum).

£50m to support the recovery of high streets

The Government has announced the Reopening High Streets Safely Fund worth £50m to help councils across England prepare for the safe reopening of high streets and other retail spaces. The funding comes from the European Regional Development Fund.

The money will support practical measures so businesses can reopen quickly when they are allowed to and to allow staff get back to work and customers return to shops confident it is safe to do so. Measures could include new signs, street markings and temporary barriers to help get businesses ready for beginning to trade again safely – this applies to those in high streets and town and city centres, but also in other public spaces like beachfronts and promenades. Councils could also use the money to develop local marketing campaigns to explain the changes to the public and reassure them that areas are safe.

The fund for Yorkshire councils totals £4.9m.

Government indicate rescue plans for large British companies

The Government has indicated that it is prepared to rescue large British companies severely affected by the coronavirus crisis. The Treasury said “last resort” support could be made available if a firm’s failure would “disproportionately harm the UK economy”. The announcement follows indications that a number of big firms are seeking Government help to survive the crisis, including Jaguar Land Rover which is in talks to secure a £1bn loan.

The plan, named “Project Birch” was mentioned by Transport Secretary Grant Shapps in Parliament last week when discussing the future of the aviation industry. It could involve the State taking stakes in companies, although extending existing loans would be preferable.

Update on the Government’s furloughing scheme

Figures from the Treasury have stated that 8.4 million workers are now covered by the Government’s Coronavirus Job Retention Scheme, up from eight million a week earlier. HMRC also said that one million employers had claimed £15bn for the 8.4million furloughed employees between 20th April 2020 and 24th May 2020.

Another 2.3 million self-employed workers have made claims under the separate Self-Employment Income Support Scheme, at a cost of £6.8bn.

The combination total of 10.7 million workers represents a third of the UK’s 32 million-strong workforce that must stay at home and not work.

The Government has committed to extending the furlough scheme until the end of October in some form and employers are braced for an end to the current £2,500 maximum per month per employee subsidy for non-working staff and its replacement with a smaller subsidy.

Coronavirus sick pay scheme opens for applications

The Coronavirus Statutory Sick Pay Rebate Scheme, announced by the Chancellor at the Budget earlier this year, opened for applications on Tuesday 26th May 2020. Small businesses and employers across the UK, with fewer than 250 staff, who have paid statutory sick pay to staff taking coronavirus-related leave will be able to apply to recover the costs of paying it for two weeks, worth almost £200 per employee. Applications to the scheme can be made here.

9. Key Contact Details Name Contact Details
LCC Business Support https://www.leeds.gov.uk/coronavirus/business
Leeds City Council Intelligence Hub inclusive.growth.strategy@leeds.gov.uk
Leeds City Council Business Rates business.rates@leeds.gov.uk
LEP Business Support https://www.the-lep.com/business-support/covid-19-support-for-businesses/

Email: businessgrowth@the-lep.com

Telephone: 0113 348 1818

Compliance team epteam@leeds.gov.uk
Licencing entertainment.licensing@leeds.gov.uk
LCC commercial tenants CityDevelopmentIncomeTeam@leeds.gov.uk
National helpline for businesses & self-employed Telephone: 0800 0159 559