Memorandum from Blackburn &
Darwen Council (NW 12)
1. The effect of the economic situation on
the region; including the effect on different sectors and on different
sub-regions
— For the Council's three enterprise centres
(and their 80 tenants) there has as yet been no material
direct effect. Tenancies remain in tact, no new rental arrears
are evident and only two have left the centres of late—both
for growth rather than decline reasons.
In statistics for the borough:
— Unemployment—the numbers
claiming JSA have been increasing since April 2008 and increased
by more than half between October 2008 and April 2009 from
2,745 to 4,260 (+55%). The numbers of short term claimants
increased by half between October 2008 and April 2009 from
2,195 to 3,330 (+50%). The impacts have been felt hardest
by the core working age group (25-49) where the number of claimants
increased from 1,385 to 2,225 (+61%).
— Redundancies—the number
of declared redundancies is currently running at 130 per
month in 2009 compared with an average of 73 per month
in 2008.
— Job Losses—current forecasts
indicate more than 1,300 job losses over the next year with
Manufacturing being affected most strongly (-860) and the Hotel
and Catering, and Financial Intermediation sectors each losing
more than 150 jobs.
— Businesses—database analysis
indicates that there are 220 fewer businesses in Blackburn
with Darwen in April 2009 compared with April 2008, a reduction
of 4% in the total number of businesses. The reduction in numbers
of businesses has been reflected across all sectors, while Financial
Intermediation (-15%), Agriculture Hunting and Forestry (-11%),
Real Estate (-8%) and Transport and Communications (-8%) are the
four sector with the greatest percentage losses. The sectors losing
the greatest number of businesses have been Construction which
lost 25 businesses, Manufacturing (25) and Hotels and Restaurants
(26). Anecdotal evidence from companies indicate banks tightening
lending criteria and unilaterally reducing overdraft limits as
they try to reduce their exposure to risk. This is having an adverse
effect on businesses ability to grow/fund investment projects.
— Housing Market—average house
prices in Blackburn with Darwen reached a peak of around £98,000 between
September 2007 and March 2008 and has since dropped
back by 13% to £85,290. Sales volumes have fallen from almost
350 in September 2006 to 50 in January 2009. This,
in a market where average prices have been consistently 40% lower
than North West and Lancashire Averages.
2. The effectiveness of Northwest Regional
Development Agency in assisting businesses in the current economic
downturn
— Aware of additional investment being
provided to support business in the current climate but still
concerns over the work of the Agency and Business Link in terms
of coordination and simplification for business as a customer.
It still feels complex and is taking a long time to come forward.
In addition the current ERDF programme is very slow to come forward
with the average application now taking five months to be processed.
I am aware that the HE sector in Lancashire in particular has
written to NWDA to complain about the delay in processing applications
following a graduate retention programme missing an end of term
deadline despite the application having been with the Agency for
some months.
3. The response of the Joint Economic Commission,
established by the Regional Minister in November 2008, to the
economic downturn
— Nothing to add and appears comprehensive
but as ever it is the ability of the agencies to move quickly
to assist on the ground. Some good practice notably with JC+ but
not evident across the piece. Business Link in particular still
appears to be gearing up and has little profile.
4. The capacity of the Government Office for
the North West, Government agencies such as Business Link, Learning
and Skills Council, and Jobcentre Plus, and other partnerships
between Government agencies, local government and the private
sector, to respond effectively to the economic downturn
— Would anticipate the direct business
support mechanism (increasingly sub-contracted via complex procurement
routes) was not nimble enough to respond quickly to changing circumstances
such as the need for customised recession busting support. However,
I have been impressed with the JC+ ability to adapt and I feel
the partnership working has grown stronger through the need for
all hands on deck.
5. The usefulness of Government initiatives
such as Real Help Now, in providing support and enabling access
to finance, for businesses in the north west
6. Whether the approach of regional Government
and its agencies during the current economic situation strike
the right balance between short term need and planning for the
future
— No feel for this yet as initiatives are
still feeding through. However on ERDF funding in particular the
inability to move quickly is hampering the programme and even
resulting in bids being withdrawn because the funding is too complex
or processes too lengthy. The current lobby to consider amending
the ERDF operational programme to reflect the need for more pump-priming
ERDF is supported but we don't hold out any hope of swift changes.
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