Coronavirus: How Peterborough and Cambridgeshire’s economy has been devastated - and the bold strategy to ‘bounce back’

The economy of Cambridgeshire and Peterborough declined by an estimated £1.39 billion from April 1 to June 30 - a 21.9 per cent annual drop.
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During this time, around one in four workers were on furlough, while the number of people claiming Universal Credit increased by 107 per cent between February and July.

With the Government’s furlough scheme coming to an end at the end of October (with new support for workers being introduced), local lockdowns being implemented and winter still to come, the picture is bleak.

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But thoughts are already turning ahead to the future and how Peterborough and Cambridgeshire can not only just ‘bounce back’ but thrive going forward.

Queues outside QueensgateQueues outside Queensgate
Queues outside Queensgate

A new Local Economic Recovery Strategy has now been endorsed by the Cambridgeshire and Peterborough Combined Authority - the area’s mayoral body - and is now being presented to local authorities in the county for endorsement.

This is on top of the authorities producing their own recovery strategies.

The LERS is a bold set of proposals centred on huge sums of investment to transform the economy, and there is no holding back from the combined authority when it describes the impact it could have on the county.

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It believes the strategy will “set the Cambridgeshire and Peterborough economy as a trailblazer and exemplar of sustainable and sustained economic recovery and renewal for the rest of the UK.”.

It adds: “This strategy sets out a clear and shared vision for a more inclusive, digitally enabled and greener recovery that leads to much greater future resilience, more evenly felt, across our economy.”

As part of a three piece feature, the Peterborough Telegraph has analysed the strategy in depth, picking out the key details to summarise what the future for Peterborough and Cambridgeshire could look like.

Among the findings are:

. Approximately 17 per cent of jobs being protected by furlough could become redundant when the scheme ends

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. In Peterborough, a third of workers aged 16 to 64 were on furlough in August

. Peterborough has “avoided the worst of the recession so far,” however, it faces risks from a slow retail recovery

. Growth in Peterborough will be centred around more than £600 million planned for redevelopment in the city centre (much of it private investment), boosting skills and protecting and enhancing the city’s natural environment

. Businesses want to invest or expand in Fenland but are being hamstrung by a lack of commercial property

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. Fenland’s recovery will include major investment in transport.

Moreover, plans to boost the Cambridgeshire and Peterborough economies include:

. A new £29 million Rebound And Grow Coaching Service

. A new £4 million scheme to target national firms and foreign investors which is expected to generate more than 1,200 new jobs

. Support of £13.1 million for the regeneration of city centres

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. A new head office in Peterborough for 3D printing company Photocentric which will create 1,000 jobs over the next four years and 50 apprenticeships

. Establishing the first independent research and development centre for Peterborough

. The potential for three new garden towns, each delivering approximately 6,000 new houses

. An £80,000 pilot to retrain adults, which includes working with health trusts to create 300 to 400 new jobs

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. A £2 billion Kickstart Scheme to cover 25 hours a week at the minimum wage for workers retraining.

The first part of our series looks at how badly the local economy has been affected by the pandemic and the broad outline for recovery, using reports commissioned by Metro Dynamics and Hatch Regeneris:

How the coronavirus pandemic has damaged Cambridgeshire and Peterborough’s economy

(Source: Metro Dynamics report - evidence from August)

. Cambridgeshire and Peterborough’s economy declined by an estimated £1.39 billion from April 1 to June 30 - a 21.9 per cent annual drop

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. The professional, scientific and technical sector lost £186 million (a 24 per cent quarter on quarter fall in output), the education sector lost £172 million (a 34 per cent drop) and manufacturing lost £166 million (a 20 per cent fall).

. Visitor economy output fell by 87 per cent, arts and recreation by 45 per cent, and construction by 35 per cent

. 40% - The proportion of businesses in the education sector (the county’s fourth largest sector by employment) which were thought to be not losing money

. Across local authorities, output fell by 20 per cent in Peterborough (£319 million), compared to 25 per cent (£370 million) in Cambridge, 22 per cent (£298 million) in South Cambridgeshire, 20 per cent (£214 million) in Huntingdonshire, 22 per cent (£99 million) in Fenland, and 20 per cent (£90 million) in East Cambridgeshire.

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. One in five businesses were continuing to access government support schemes in August

. Around one in four workers (114,800) across the county were on furlough

. From February to July the number of people claiming Universal Credit increased by 107 per cent to exceed 60,000 (a record high), compared to a 90.3 per cent rise in claimants nationally

. There was a 105 per cent increase in claimants aged 25 to 49

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. As of July 1, there were 39,352 claimants in this age group

. Approximately 17 per cent of jobs being protected by furlough could become redundant when the scheme ends, doubling the current claimant rate.

. Jobs most at risk: accommodation and food (around 50 per cent), arts and entertainment (18 per cent) and retail (6 per cent)

The report states: “Though the region appears so far to have been spared from the worst of the recession, a slow recovery in the retail sector poses a real threat to regional employment given 36,000 workers are employed in the sector.

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“An analysis of high streets shows that activity has been slower to return in Greater Peterborough than in other parts of (the combined authority area). It remains to be seen whether the shift to online retail is temporary, or whether there is some permanent displacement of in-person retail activity.

“If there is, many retail jobs across Greater Peterborough are at risk over the longer term.”

Peterborough

. 28,400 workers furloughed

. Self-employed supported: 7,100 (with claims valuing £19.2 million)

. 34 per cent of workers aged 16-64 on furlough

. 23,592 Universal Credit claimants in July (a 168 per cent rise from February). Of those, two-thirds are aged 25 to 49.

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. Across Greater Peterborough output from April 1 to June 30 fell by around £533 million, led by a £78 million decline in manufacturing and a £67 million decline in retail output

. A third of Peterborough employees are key workers.

The report states: “Peterborough has avoided the worst of the recession so far, but a slow retail recovery poses a real risk to the region.”

Meanwhile, footfall for the retail and recreation sector is at 80 per cent of pre-lockdown levels and could soon be at 100 per cent, a city council report states.

Fenland

. 12,600 workers furloughed

. Self-employed supported: 4,100 (with claims valuing £12.5 million)

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. 8.482 Universal Credit claimants in July (a 99 per cent rise from February)

. Output lost between April 30 and June 30 - £99 million

The report states: “The Fens’ strong agrifood base may have helped insulate the region from the worst effects of the economic shock as regional food production and processing stepped up to meet demand.”

Sectors identified for long-term growth which will be prioritised:

. Retail, hospitality and leisure: Helping firms to deal with the continuing and long-term social distancing and behaviour change

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. Construction: Helping firms to adapt to remote working and helping developers stimulate demand in the homeowner market

. Transport: Helping operators to shift current public perception of mass-transit safety

. Education: Supporting higher and further education providers to transition permanently towards greater digital delivery for remote learning

. General manufacturing: Helping firms deal with the disruption in their supply chains, the slow recovery in demand and the potential impacts of a no deal Brexit

. Health and care: There is expected to be greater demand for health care professionals