Memorandum from Wirral Council (NW
10)
Wirral welcomes the opportunity to feed into
the North West Regional Committee in its call for evidence into
the impact of the economic downturn. This response is intended
to be in support of the Liverpool City Region response, but providing
some specific points on behalf of Wirral and its key partners
at a local level.
The following summarises the impact of current
economic conditions and also sets out briefly our key responses.
It is important to note the limitations of many official data
sources. For example, data may not be available at the Wirral
level or lower. Furthermore, much of the data has a significant
time lag—thereby not accurately reflecting more recent worsening
conditions.
1. EFFECTS OF
THE DOWNTURN
IN WIRRAL
1.1 Employment rate
Latest data for September 08[19]
indicates that Wirral's overall Employment Rate has decreased
by 3.1% points from its December 2007 position of 71.4% to
68.3%. This compares with a NW rate of 72.1% and a GB rate of
74.5%.
1.2 Worklessness
The proportion of Wirral's working age population
claiming Job Seekers Allowance (JSA) in April 2009 has gone
up to 5.3% (9,806). This has increased over the last 12 months
from 3.5% (April 2008)—an increase of 3,382 people.
The current Wirral rate of 5.3% compares with a regional rate
of 4.6% and an England rate of 4.1% for April 2009.
1.3 Job Density
Latest data from 2006 indicates that Wirral's
job density is 6.8. This means that there are 68 jobs for
every 100 working age people. This is an increase from the
previous year's rate (2005) which was 6.1.
1.4 Redundancies
Analysis of HR1 redundancy notifications
provided by Jobcentre Plus has demonstrated a relatively high
volume of redundancies in the borough. In 2007-08, 5 employers
notified a total of 1,051 redundancies (821 of these
were attributable to job losses at Burtons). Analysis of HR1s
from April 2008 to January 2009 shows a further 20 employers
notifying an additional 942 job losses.
Recent announcements include Tulip Foods in Bromborough,
who recently confirmed the closure of the plant with over 300 job
losses. Cammell Laird announced up to 200 redundancies in
March 2009. Bromborough based chemical plant Croda International
have recently announced the closure of the Wirral site with the
loss of 115 jobs.
1.5 Business Rates (National Non Domestic
Rates)
A significant impact has been felt over the
last 12 months in respect of Wirral's business rate collection.
For example, figures for end of financial year March 2009 indicate
that the collection rate had dropped from 97.7% (2007-08) to 93.4%.
Although collections are ongoing for these arrears, it is clear
that businesses have found it harder to meet their liabilities
this year.
2. ADDITIONAL
IMPACT
2.1 Housing market
The economic recession exists alongside a slowdown
in the housing market across Wirral. This is evidenced by reducing
house prices, lower sales numbers, less new-build housing, more
empty homes including unsold new homes and greater financial difficulties
for mortgaged owner-occupied. This slowdown has had an impact
on the construction sector of Wirral and has increased demand
for affordable housing whilst loss of economic confidence has
dented housing market confidence slowing down interest in moving
home or investing in home improvements.
Housing market expectations are that we do not
anticipate a marked recovery in the short term. Much will depend
on the recovery of the economy generally. Therefore the housing
market will continue to be under pressure for the remainder of
2009 and into 2010. This will increase demand for affordable
housing, demand for innovative solutions to see new homes built
and occupied such as more shared equity schemes. Until economic
confidence improves, the housing market is likely to struggle.
This will place continued pressure on products designed to stave
off repossession.
2.2 Feedback from health partners
It is anticipated that the recession will have
an adverse impact on the lifestyle of the population, particularly
those adversely affected such as people losing employment and
experiencing economic and social problems. This could increase
numbers of people smoking, drinking above safe recommended levels,
being inactive, eating poor diet etc.
The North West Public health Observatory has
been commissioned by the Directors of Public Health to model the
expected impact of the recession.
2.3 Feedback from welfare services
It is anticipated that there will be an increased
number of people using Welfare Rights Unit (DASS) services and
this has been the case in the last quarter compared to same period
last year.
2.4 Debt and Financial exclusion
Feedback from voluntary sector organisations
demonstrates a substantial increase in service users. Wirral Advice
Network indicates significantly increased demand for debt advice
over the last year, with Wirral CAB reporting that 25% increase
on the same time last year. The CAB have recently accessed government
resources to enable additional opening hours for debt advice,
in response to the increased demand.
2.5 Council Benefits
(Housing & Council Tax Benefits plus Local
Housing Allowance)—Over the past months it has become increasingly
evident that the economic downturn is directly impacting upon
Benefits service delivery locally. This is consistent with the
national picture as authorities identify a trend of consistently
increasing live caseloads, "footfall" and general workload.
For Wirral, in the past twelve month period the caseload has increased
by some 2,072 claims, and continues to rise. The rate of
change is considerably more noticeable from January 2009 onwards.
3. RESPONSE TO
THE RECESSION:
PARTNER ACTIVITY
3.1 Business Support
In order to support Wirral businesses through
difficult times, every effort is being made to ensure companies
can easily access the national support available. This includes:
— Invest Wirral working with Business Link
to ensure that information is cascaded through and online business
forums networks and Wirral Investment Network (WIN) which represents
the Business and Professional Sector.
— Setting up an online local business support/events
calendar using a mixture of Working Wirral and European Regional
Development Fund (ERDF) support which further promotes key support
services.
— Seminar with NWDA in January regarding
access to finance held at the Floral Pavilion.
— Businesses from across the borough benefited
from a "Boost your Business" event at the Floral Pavilion,
held on 25 and 26 March. The event aimed to inform the
borough's business community of the support available to them
during the current economic climate. Invest Wirral—the Council's
business support and investment team—have produced a brochure
with a breakdown of all of the support agencies that can help
as well as their contact details. Feedback from the event has
been positive—for example one company has reported a saving
in excess of £6,000 in business rates as a result of
advice from the event. The event included the North West Development
Agency, Business Link North West and will include speakers from
a number of other support agencies. Invest Wirral will host this
type of event again over the course of coming months.
— Introducing new financial support programmes
and ensuring existing measure have enough flexibility to provide
maximum benefit.
— Development of a Wirral Apprenticeship
programme. This will support the council and its partners to continue
tackling worklessness and skills issues by offering support within
a structured apprentice programme.
3.2 A partners meeting to respond to the
recession has been established with all key partners from across
the LSP network. Additionally, Wirral Council meet monthly with
the Wirral Chamber of Commerce and Federation of Small Businesses
to ensure that regular and accurate feedback is received on the
issues facing small businesses locally.
3.3 In consultation with other partners,
including the NWDA the Council is looking at providing enhanced
business support. To complement existing business networking,
every effort is being made to ensure companies can easily access
the national support available.
3.4 Small Firms Rate Relief—this
is being followed up with additional awareness promotion of the
scheme for eligible businesses to pursue. In addition, the Government
announced changes to the Ratings scheme for empty properties as
part of the recession budget which came into force from April
200— these will of course also be promoted by the Revenues
section.
3.5 Strong partnership working at an operational
level is being supported and developed by the Wirral Economic
Development & Skills (WEDS) partnership which is receiving
regular updates on the downturn and partners share organisational
intelligence and policy updates. Officers are also participating
in Merseyside meetings to look at the effects of the recession,
and agree some co-ordinated responses.
4. OTHER ACTIVITY
These measures complement work being undertaken
by partners including:
— Jobcentre Plus (JCP)—In
addition to their core services, JCP has brought down the eligibility
for certain programmes from six months to day one to enable the
newly unemployed to access their enhanced offer.
— The Learning and Skills Council (LSC)—the
LSC works closely with JCP and to deliver an Integrated Employment
and Skills programme across Greater Merseyside; and Train to Gain
programme and the pre employment has been subsequent enhanced
in response to the situation.
— Business Link—is working
with Council service areas to increase access to business support
services.
— VCAW annual conference, May 2009—this
conference aims to identify the anticipated impact of the economic
downturn, look at practical ways of moving forward and highlight
the Government's Action Plan, "Help Right Now" and the
support that is available through this initiative. The conference
also aimed to identify how COMPACT can be fully utilised to support
the sector through these turbulent times.
— Merseytravel—Merseytravel
has frozen tunnel tolls at their current levels from 1 April
2009 to 31 March 2010, following a meeting of the Passenger
Transport Authority. The decision means toll levels for all classes
of vehicles will be maintained, with the aim to support businesses
and the public during the current economic climate.
5. HOUSING STRATEGY
The recession has prompted a change in the targets
for new-build housing as part of the HMRI programme, re-phasing
of HMRI development programmes, changing tenure of new-build schemes.
It has also led to changing priorities in using public resources,
principally land values as in both Fiveways and Church Road the
Council's financial stake in HMRI development has been used to
pump-prime new-build and see new homes and shops being built.
The recession has caused a shift in strategic housing priorities
towards creating opportunities to support and enable the occupation
of new-build housing particularly by first-time buyers. This has
been in the form of developing options for shared equity, rent-to-buy
and making the most of national initiatives such as Home Buy Direct.
6. NEW INTERVENTIONS
The Council and its partners are currently in
discussion as to the best ways to support Wirral residents and
businesses in the current situation in addition to current activities.
The interventions outlined below detail the opportunities are
planned:
6.1 BIG Support Grant/Consultancy
Support: The Council is fully aware of the challenges that
many businesses in our area are facing at the present time, and
recognises the need for us to work collectively with our partners
to minimise the adverse impacts of the economic downturn on businesses
and their employees. Access to capital and cash flow has been
identified as a major problem. Wirral's business makeup is dominated
by micro-businesses (those with fewer than 10 employees) and a
number of these have reported continued difficulty in speedy access
to funds through current and indeed proposed arrangements. Therefore
a programme has been designed to specifically support (SME's 250 employees
and less) with a specific focus on micro businesses. The fund
will be available for a wide range of support, including access
to consultancy and grants. It is also hoped that the availability
of such financial support will encourage banks and other lending
institutions to also invest in these businesses.
6.2 The "Think Big" Investment
Fund currently supports exiting and inward investing businesses
on a range of big projects that will support employment growth
and business expansion. Given the current situation, Officers
have drafted a new set of criteria for the fund which will allow
businesses to safeguard jobs within a new set of defined criteria
which will allow businesses to access finance for other outcomes
rather than just growth.
6.3 Apprenticeships—Officers
have developed an apprenticeship programme for the borough, with
access to all vocational areas. Apprenticeships will support the
council and its partners to continue tackling worklessness and
skills issues by offering support within a structured apprentice
programme. Therefore a scheme has been developed across Wirral
supported through Working Neighbourhoods Fund (WNF) resources
to a maximum of £1.7 million. This activity will add
value to recent national announcements on supporting apprenticeships
with 100 new apprentice places in the workplace available
for residents of Wirral.
7. WORKING WITH
THE NWDA
Wirral is working extensively with the North
West Development Agency (NWDA) within the Liverpool City Region
and independently on responding to the economic downturn. Generally,
the partnership working has been effective but there are a number
of areas where Wirral would want additional dialogue/flexibility.
7.1 Business Support
The NWDA has introduced its 30 business
support products that have been developed in line with nation
BSSP guidance. The Council has facilitated workshops with NWDA
staff to promote the support products. However, the BSSP products
developed by the Agency have intervention rates attached to grants
and interest rates attached to repayable loan facilities that
were set in a different climate. We would like NWDA to work with
Liverpool City Region to review, where appropriate, these interventions
rates on a short term basis using Merseyside ring-fenced ERDF
allocations to plug deficits where appropriate. This needs to
be overseen by National Government to support changes to the European
Programmes currently agreed by DCLG.
8. INFRASTRUCTURE
Given the pressures to commit 85% of the North
West Operational Programme ring fenced ERDF monies by December
2010 would allow a consistent City Region message to identify
opportunities that cannot be realised at present. The NWDA have
been flexibility in their approach to development and have put
measure in place to apply flexibility in the use of ERDF.
8.1 The use of grant intervention in gap
funded schemes is determined by the development in question being
classed as "speculative". Therefore, particular developments
are deemed ineligible if there is an identified end user for that
development. Given the current financial difficulties faced by
developers in accessing financed for speculative developments,
we ask that, for a limited period, gap funding can be used for
schemes where an end user is identified. This is of particular
importance to the Private Sector as the financial institutions
are unwilling to borrow money to schemes where there may not be
revenue generated at the instant a development is completed. Given
the pressures to commit 85% of the North West Operational Programme
ring-fenced ERDF monies by December 2010 would allow a consistent
City Region message to identify opportunities that cannot be realised
at present.
9. POWER
The power constraints facing the City Region
as a whole will fundamentally restrict the scale of renewal planned
for over the next 20 years. Most of the Strategic Sites identified
for the long term regeneration of the City Region have limited,
or no power supply. The NWDA undertook a study across the North
West identifying the challenges that are faced as a region in
respect of power over the next 20 years.
CONCLUSION
Wirral partners are taking forward a co-ordinated
and coherent response to the economic situation. The Council is
co-ordinating a series of partners' meeting to respond to the
recession with key partners from the LAA, businesses and communities.
The underlying principle of responses is based
on good economic intelligence and policy, with an understanding
of business fundamentals and long term strengths. There is a need
to maintain a long-term focus on skills, innovation and regeneration
and it is important to keep a longer term strategy ready for when
recovery starts.
19 Source: ONS Annual Population Survey. Back
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