New report reveals how recession couldaffectthe regions
The renaissance of northern cities has positioned them relatively well to weather the economic storm, whilst London could be set to bear the brunt of the recession, according to a new report published in November 2008, by the LGA.
The report, called ‘From Recession to recovery: the local dimension’ to be published by the Local Government Association at its credit crunch summit in London, projects how each area of the country could be affected differently by the economic downturn if no action is taken.
The report projects that:
· The hardest hit industries will be construction and manufacturing, whilst high skilled industries look set to remain relatively unscathed.
· The recent growth of big northern cities has placed them relatively well to cope with the effects of the recession.
· Almost two in five of jobs that could be at risk over the next two years are in London and the South East.
· Even within individual regions there are marked differences between how local areas may fare.
The LGA, which represents councils in England, is warning that a national, blanket policy to deal with the recession will be unable to target help effectively to specific areas. It is calling for as many economic decisions as possible to be taken at a local level to ensure that local solutions can be found to local problems.
At today’s credit crunch summit, council leaders will pledge to work together to minimise the impact of the downturn on people and businesses, to avoid job losses in the coming months and years and to retrain people who have become unemployed. As major employers, purchasers and providers, councils are best placed to kickstart the local economy and help people in need.
Cllr Margaret Eaton, Chairman of the LGA, said:
“Global problems have tipped the British economy into a recession that is affecting countries around the world. The Government has acted at international and national levels, councils are now taking a lead in the effort to find local solutions to local problems.
“From keeping people in their own homes and offering support to the unemployed, to helping small businesses stay afloat, councils are already acting.Councils will be pulling out all the stops over the coming months and years to protect local people and businesses from the worst effects of the slump.
“The recession is going to hit different parts of the country in very different ways and even within individual regions there are marked differences as to how local areas could fare. It is clear that a national, one size fits all approach to dealing with the recession simply isn’t going to work. The research shows that the fastest way to get out of recession is formore decisions about the economy to betaken at the local level, which means councils continuing to work with local people and businesses.
“These figures represent a wider picture of employment change, including retirements and unfilled posts. However, they also include people who could be made redundant and any loss of jobs has huge human cost with their own stories behind it.
“With greater freedoms over transport, infrastructure, planning, economic development and skills, councils would be able to do even more for local people. The tough times ahead will hit people throughout Britain. The response must be swift and effective if it is to protect people from the worst effects of an economic slowdown and make rapid progress towards recovery.”
ENDS
Notes to editors:
1. The report was prepared by PACEC (Public and Corporate Economic Consultants) on behalf of the LGA. The research was carried out in October and November. Copies available on request.
A modelwas createdby PACEC that analysed the structure of each region’s economy, its performance over the last two years and its performance during the last two recessions. The model projects that by December 2010 up to:
-370,000 jobs could be lost in London (7.9% ofall jobs in London)
-170,000 in Yorkshire & Humberside (6.8% in that region)
-230,000 in the North West (6.7%)
-180,000 in the West Midlands (6.6%)
-280,000 in the South East (6.3%)
-130,000 in the East Midlands (6.0%)
-170,000 in the East (6.0%)
-70,000 in the North East (5.7%)
-130,000 in the South West (5.1%)
The estimates are of net job losses. This means that more than 1.7m jobs will cease to exist since some new jobs will be created during the period. This is not an estimate of workers, and no estimate is made of people leaving the labour market (retiring), joiningthe labour market, moving from job to job, becoming unemployed.
South East
The South East of England has the highest concentration of the industries which are likely to perform best - 38% of its jobs are to be found in these sectors. The SE performed slightly above average in the last recessions but below average in the last two years.
London
London has relatively few of the industries which are likely to perform the best but equally few of those that are likely to perform the worst. London performed poorly in the last two recessions and slightly below average in the last two years.
East Midlands
EM has a high proportion of industries which are likely to be affected by the recession (22%). The EM performed relatively well in the last two recessions and above average in the last two years.
West Midlands
WM has a high proportion of industries which are likely to be affected by the recession (20%). The WM performed averagely in the last two recessions but slightly above average in the last two years.
North East
The NE has a relatively high proportion of industries that are likely to perform the best. The North East fared averagely in the last two recessions and also performed better than any other region in the past two years.
South West
The South West has average numbers of industries that are likely to perform well and perform badly. The SW performed well in the last two recessions but slightly below average in the last two years.
Yorkshire & Humberside
Y&H has a high proportion of jobs which are likely to be affected by the recession (20%). Y&H performed averagely in the last two recessions and slightly below average in the last two years.
North West
The NW has average numbers of industries that are likely to perform well and perform badly during the recession. The NW performed relatively badly in the last two recessions and relatively badly in the last two years.
East
The East of England has a relatively high proportion of industries most likely to be affected by the recession. The East performed well in the last two recessions and well in the last two years.
2. A recent publication ‘Global Solutions: councils helping people and businesses by the LGA sets out the range of ways in which councils are helping people through the difficult financial climate. They include:
§ Wakefield Council, which is offering people at risk of repossession interest free loans to make sure they can stay in their own homes
§ Lancashire County Council, which has identified over 500 people who weren’t claiming benefits to which they were entitled
§ Leeds Council is offering debt advice and counselling for local families
§ Westminster Council is freezing council tax to help people as they cope with higher food and fuel costs
§ East Sussex County Council is providing crisis advice to small firms.