The real reason you’re in a high Covid tier.

The English government announced its revised tier system on Thursday, and many people found themselves in a higher tier than expected, including here in Kent. Belake Research Ltd took a look at four reasons why they are necessary.

As soon as any social policy to limit the spread of Covid is announced in the UK, it is met with a chorus of reasons why we need exceptions. This latest announcement has been met by even Boris’ own back-benchers complaining. But here’s some reasons why people might want to re-consider.

The government says its criteria for allocating tiers are:

  1. case detection rates in all age groups
  2. case detection rates in the over 60s
  3. the rate at which cases are rising or falling
  4. positivity rate (the number of positive cases detected as a percentage of tests taken)
  5. pressure on the NHS

However, these aren’t reasons for the current strategy. So we had a go at explaining these reasons ourselves.

Firstly for our non-UK readers; the UK has four levels of government; UK, National, County (1m people) and District (100,000 people). That’s a broad generalisation, but for the purposes of this article and our non-UK readers, it’ll do.

1) Increasing infection is more important than actual infection

A key objection to the Tier system has been the fact that some areas with very low infection rates have been grouped together with areas of high infection. For example, the Folkestone & Hythe (formerly known as Shepway) district with 187 cases per 100,000 has been grouped with Swale district which has 560, and the whole county of Kent has been locked down.

Map of Kent Districts

But the actual level of infection is far less important than the change in infection. When infection rates are increasing then unless action is taken they will continue to increase and the rate of increase will also increase.

This is exponential growth. While this has received air time in the media, its direct result seems to have been missed. If rates are increasing, then higher levels of infection are a certainty. So why would you wait to take action?

Using the example above this makes Folkestone a bigger priority than Swale, since Folkestone cases per 100,000 are rising at 12 cases per week. Swale, on the other hand is decreasing by 114 per week.

2. People live across administrative boundaries

An important reason for locking down counties as a whole is that people live their lives across multiple districts. Whilst it has been said that the virus doesn’t respect boundaries, we would argue for a slightly stronger message.

People live their lives across these administrative boundaries meaning their sphere of social contact exists across social boundaries. Whether for work, social, retail or domestic purposes, our modern lives have outgrown districts. And social contact is what spreads Covid. The size of the lockdown area needs to match the likely area in which people live their lives.

3. Consistency of message

People generally live their lives across 3 or 4 districts. So they have to remember the tiers for those districts, as well as the changes to those tiers every two weeks.

Any marketer will tell you the importance of clear, consistent messages. To keep the message consistent you need to use larger areas.

4. Access to services

This is linked to the fact that people live across administrative boundaries, but it deserves a special mention, because it shows how infections can skip across administrative areas.

People gravitate to areas which have a high concentration of services. Typically these are town centres, but also retail destinations. These locations are ideal opportunities for infections to ‘jump’ across boundaries even skipping over an intermediate location.

In our earlier example people from both Folkestone and Hythe, and Swale might well gravitate to the urban centre of a third district, Ashford. Thus transmission is entirely possible directly from Swale to Folkestone, even though Ashford lies between them.

5. Access to health services

Whilst this is kind of the same as the previous, in the case of Covid its worth considering in detail.

Swale is the district which everyone can agree should be in the top tier. However, there are no hospitals in Swale. So a high rate of infection in Swale means that when other districts start to see their case rates rise, they may find hospital beds are already taken by Swale residents.

Because the pressure on health services is a factor in determining which tier you are in, neighbouring districts have an impact on which tier your own district in.

Swale will impact the tier that Medway, Canterbury, Ashford and Maidstone in, because Covid patients will be distributed between health services in these areas. Folkestone doesn’t have its own hospital either, so is dependent on Ashford, which will have its capacity reduced by Swale residents, meaning Folkestone needs to go into tier 3 earlier.

In summary:

For once the government has made the right decision about which areas need to be grouped together and the allocation of tiers. The current backlash against these allocations is unhelpful and largely motivated by the personal interests of local politicians who want to look like they are standing up for their community. In reality they are doing the opposite. The new tier system has the ability to avoid a third lockdown in the UK, if its done properly.


We’ve deliberately kept maths out of this article, but if you’re interested to find out more about how modelling can help answer questions like these, why not get in touch.


Belake Research Ltd is a specialist data analytics and social analytics company. Click here to find out more, or get a free consultation with a data analyst to find out how we could help your organisation.

Productivity: the missing piece of the budget jigsaw.

The failure of successive governments to address the productivity puzzle makes the chancellor’s woe’s much more challenging. This article investigates why productivity is so important.

Thursday saw the announcement of the UK Budget, setting out the the government’s tax and spending decisions for both the next year and the following four years.

With Covid and the end of lockdown understandably grabbing most of the headlines, the budget didn’t get much airtime this week as it usually would. However, the Chancellor Rishi Sunak identified that the economic crisis caused by Covid is only just beginning. Covid will have an impact long after vaccination becomes widespread.

So, what is productivity?

GDP, or Gross Domestic Product is the total output of the whole economy. It is the ‘Net Profit’ of the whole country. Productivity is the GDP generated per hour worked by all employees in the UK. Productivity is therefore the net amount that each of us contributes to the economy every hour we work.

As a service economy, ‘hours worked’ is our main resource. Thus the main way we can improve our economic well-being is to either

  1. work more hours, or
  2. be more productive with the hours we work

Interestingly the UK has very much focussed on the first of these. In 2019 productivity growth was 0% but GDP growth was 1.9%. This 1.9% increase is therefore entirely achieved through an increase in working hours, in particular by reducing unemployment. Average hours worked per employee has been relatively consistent for a decade, so the increase in hours worked has come from more people working – reducing unemployment.

Whilst this is important, it means that this growth is unsustainable – the GDP growth that can be achieved in this way has a definite limit – when everyone is employed.

So what is this ‘puzzle’

The UK’s productivity has been sluggish for more than a decade, and is about 20% below what it should be. The chart below shows how UK productivity has tracked against US productivity, and that of other major economies, as the chart from the budget report shows:

Potentially, GDP is 20% less than it could be. This is greater than the drop in GDP caused by Covid and the 2008 financial crisis combined. The government has taken incredibly significant steps to mitigate the impact of these crises, yet very little to mitigated the impact of the productivity puzzle.

Yet the Chancellor spent just 2 pages out of the 128 page budget report addressing the productivity puzzle. The Budget is predicated on the UK achieving productivity increases in excess of 1.1% from 2021. Given the UK has averaged 0.3% a year since 2008, and a resounding 0% in 2019, it’s hard to see this as anything but ambitious. The UK’s average productivity growth over the last decade is the worst it has been since the early 1800s.

Why is productivity important?

The Royal Statistical Society named the 0.3% average growth in productivity it’s statistic of the decade in 2019. The Office for National Statistics calls productivity “the defining economic questions of our age”.

Productivity is what is behind the economic malaise that most Brits have felt since 2008, and underpins most of the pressing problems that the country faces. From Brexit to the under-investment in public services, Productivity is a factor in all these.

It’s important both for its direct and indirect impacts. Wage growth is linked to productivity, so if we can improve productivity, we’ll all feel a little bit better off.

The next impact is that if productivity increases, GDP increases, and so do tax receipts. Given the level of public spending we’ve seen in 2020, tax receipts are essential to making sure its all affordable. Even in a pre-Covid world, a consistent theme of political debate was the perceived lack of investment in public services.

But productivity has more far-reaching impacts. One of our passions is the predictive analysis of social dynamics. One thing we regularly see is the polarisation of opinions, beliefs and politics as a result of economic stress. This can manifest itself as civil or political unrest, and in extreme cases, war.

As discussed above, the loss from productivity is more significant than the last two financial shocks combined. Therefore there is a latent economic stress in the UK, which means the default position is a polarisation of values & beliefs. This is an interesting lens to look at recent events such as Brexit and the rise of the momentum movement in the Labour party.

And cometh the hour, cometh then man, Boris and Jeremy were available to step into those pre-prepared shoes.

So what do we do about productivity?

Well, that’s a difficult question. But we love difficult questions. So look out for our next post, where we’ll start to answer these questions.

References:

Average actual weekly hours of work for full-time workers (seasonally adjusted) – Office for National Statistics (ons.gov.uk)

Labour productivity, UK – Office for National Statistics (ons.gov.uk)

RSS – RSS announces Statistics of the Decade