Grim prediction on risk of job losses

11:11am Tuesday 18th November 2008

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HAMPSHIRE workers will be among those bearing the brunt of the recession, a major new report is warning.

Businesses across the south-east are forecast to cut 280,000 jobs by 2010 – more than six per cent of the region’s workforce, according to the Local Government Association (LGA).

The densely packed strip of coast from Southampton to Portsmouth has been singled out as being at particularly high risk of job losses.

Almost two in five of the 1.7 million jobs it estimates are at risk over the next two years are in London and the south-east.

However council leaders pointed to the arrival of new companies like Swedish furniture giant Ikea and luxury boat builder Palmer Johnson as evidence that Southampton would ride out the worst of the recession.

The LGA’s forecast comes hard on the heels of revelations in yesterday’s Daily Echo that Southampton was already feeling the pinch, with job vacancies plummeting by a third, house prices dropping by ten per cent and homelessness on the rise by 18 per cent.

It also coincides with statements from employers’ organisation the CBI forecasting that the recession would drag on until October next year, pushing unemployment to nearly 2.9 million.

The report, From Recession To Recovery: The Local Dimension, examines how the global economic slowdown will hit the nine regions of the UK.

The capital is likely to be worst hit, it forecasts, along with the south-east and some manufacturing districts in the north and the West Midlands. The rurally-based economies of the south-west and East Anglia are likely to be relatively unscathed, it predicts.

In some good news for the south-east, the report says that it has the highest concentration of the industries which are likely to perform best – 38 per cent of its jobs are to be found in these sectors, which include computing, research and development, food retail and business services. However other major regional employers such as the construction industry and manufacturing face major cuts.

Councillor Royston Smith, Southampton City Council Cabinet member for economic development, said he believes that better times lie ahead for the city.

He said: “In Southampton we have got Palmer Johnson coming, Ikea and Watermark WestQuay and all of those are creating new jobs. So if you look at our position it may not be as bad as they are predicting.

“There is also new evidence to say eastern Europeans that were here are now starting to go back and that means there will be jobs that need to be filled.”

His counterpart at Hampshire County Council, Councillor Jonathon Glen, said: “We can’t help but be affected by what happens in London, but Hampshire has a varied economy.

“We have big ports and we have Winchester and Basingstoke, and there are a lot of primary, secondary and tertiary jobs around those conurbations.

“Some people will lose their jobs, there is no doubt about it, but I am involved in trying to facilitate the up-skilling of people in jobs not required any more.

“I’m confident we’ll bounce back.”

The LGA, which represents councils in England, is calling for as many economic decisions as possible to be taken at a local level to ensure local solutions can be found to local problems.

Councillor Margaret Eaton, chairman of the LGA, said the recession was going to hit different parts of the country in very different ways.

“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 and 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.

“It is clear that a national, one-size-fits-all approach to dealing with the recession simply isn’t going to work,” she said.

“The research shows that the fastest way to get out of recession is for more decisions about the economy to be taken at the local level, which means councils continuing to work with local people and businesses.

“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.”