‘Hybrid working could help country level up’

Areas with more remote working are likely to see higher levels of local spending, suggesting that hybrid working is key to the Government’s plans for regeneration after the pandemic, according to a new report.

The Post Pandemic Places report for think tank Demos, commissioned by Legal & General, found that 36% of people plan to spend more money locally than they did before the pandemic. Among people required to work from home, this rose to 47%.

The research found that 65% of the working population were forced to change their place of work during 2020 as a result of the pandemic. Of these, 79% want to continue to have some form of remote working in future. However, the findings – using a large, nationally-representative poll of 20,000 adults – indicate that a desire to work remotely is not necessarily the same as wanting to work from home all of the time.

The report calls on the Government to promote remote working as a regeneration tool. It says the Government should incentivise the establishment of more local offices and hybrid working initiatives to give people the flexibility they want and also make progress on the ‘levelling up’ agenda, by spreading spending power across a wider geographic area.

This includes employee tax incentives, such as ‘remote-working vouchers’, similar in design to the current childcare voucher scheme.

It also calls for the Government to urgently consult on fulfilling its stated intention of making all jobs flexible by default, with location-flexibility included and for the conversion of some local civic buildings into remote working spaces, which could be used by any civil servant in order to help spread spending power out across the country.

Kitty Ussher, Chief Economic Advisor at Demos and author of the report, said: “Throughout the pandemic, an overwhelming number of people were forced to change the location they work in, whether they were required to work from home or furloughed. But for those people, as our new report out today demonstrates, they’ve built a new-found relationship with their local area that’s here to stay beyond the pandemic.

“This major shift to remote and flexible working has led to a desire for spending more cash and more time locally. In other words, flexible working has the opportunity to make local areas thrive beyond expectations. This presents an opportunity for the Government to actively support hybrid working, not just because it’s what people want and because of its long-understood potential to narrow the gender pay gap, but also as a key tool for local regeneration.”

Meanwhile, a report from another think tank, the Resolution Foundation, shows that half of workers suffered a real-terms pay cut last year despite official data indicating a sharp rise in average earnings. Data showing average weekly earnings growth of 4.5% in late 2020 was “too good to be true”, said the think-tank, which noted the figures were skewed by large pay rises among the better-off, with poorer households suffering pay cuts in real terms after adjusting for inflation.

The Foundation said its research indicated that the median annual pay rise was 0.6% last autumn, which once inflation was taken into account meant half of workers had experienced a 0.2% pay cut over 12 months. The Foundation said that the young “experienced the biggest deterioration in annual pay growth as they found themselves at the epicentre of the economic crisis”.

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