Reports

The COVID-19 crisis is increasing councils’ spending and reducing their incomes. This report analyses councils’ forecasts of these pressures and potential policy responses.

The COVID-19 crisis has brought to the fore increasing concerns about inequalities not only between different population groups – such as the gap between the rich and poor, young and old, and different ethnic groups – but also between people living in different places. Even prior to the crisis though, there was a sense that the UK is not only a highly geographically unequal country, but also an increasingly geographically unequal one.

European Structural and Investment (ESI) funds help to pay for initiatives supporting business development, research and development, investment in digital and green infrastructure, as well skills and training interventions and support for job-seekers. But with the UK having formally departed the European Union, the country will stop receiving new ESI funding at the end of 2020. Thus, for 2021 and beyond, the UK government faces choices over what to replace ESI funding with.

In this report, we use a novel source of real-time data on households’ finances from Money Dashboard, a budgeting app, to explore the impacts of the crisis so far on earnings, incomes and financial distress, and how they are evolving. We complement this with household survey data to explain and verify the key trends.

Reports indicate the government is considering a temporary cut in VAT to stimulate consumer demand, possibly targeted at sectors such as tourism and restaurants. Overall the case for a temporary VAT cut now is mixed. It could provide an important fillip to consumer demand if implemented under the right conditions. Its expiration must be carefully timed so as not to choke off a nascent recovery.

This report examines how living standards – most commonly measured by households’ incomes – were changing in the UK up to approximately the eve of the current COVID-19 crisis, using the latest official household income data covering years up to 2018–19.

The COVID-19 crisis has affected every part of the country – and indeed many other countries. What sets this crisis apart is the many different ways that it is impacting families: while the virus itself is primarily a public health issue, the unprecedented responses it has necessitated mean that this is also very much an economic and a social crisis.

The COVID-19 pandemic led many countries to implement social distancing, lockdowns and travel restrictions, which have resulted in a collapse in the world economy unprecedented in peacetime.

Much of the debate about the impacts of the COVID-19 pandemic, our responses to it, and the longer-term legacy that it will leave has quickly become a discussion about various forms of inequality.