Post COVID-19 economic recovery plans
The Council has revealed that its forecast financial deficit for the current year is around £3.9 million. However, the biggest potential hit on its finances comes from a forecast £16 million loss of Business Rate and Council Tax income. This would be the result of businesses closing and unemployment rising.
The Council has still not identified how expenditure savings may be made nor has it attempted to reduce interest charge payments by trimming its capital programme.
The York Council economic development report says how it plans to help the York economy recover from the ravages of lock-down. It updates a previous plan which was criticised for a lack of identified actions, targets, and milestones.
The report says that the impact of the COVID lock down has varied across sectors but is most significant where “serving customers face-to-face is at the heart of the business model – retail, hospitality, cultural attractions and personal services”.
One aspect to the report which may cause concern is the lack of clarity on the medium-term impact on unemployment in the City. It highlights the view of the Local Enterprise Partnership which forecasts the loss of “17,500 jobs, including 6,500 in tourism and 2,400 in retail”. If true, then York would go from having almost full employment to a record 15% level.
The report says that around 15,000 people currently work in the care sector in York.
An alternative forecast, from Oxford Economics, says that if a vaccine is rolled out in 2020 then there will be a swift return to full employment. A core (more likely) forecast, based on re-openings on the current timetable and gradual lifting of all restrictions, suggests that employment will continue to grow in York despite the impact of the pandemic.
Only a second wave, and renewed lockdowns in autumn 2020, would result in permanent losses of around 3900 jobs.
So it seems, like the population as a whole, the Council doesn’t know what will happen next. The report concludes “What we are already seeing is sharp increases in benefits claims, and we need to plan for at least a short-term spike in job losses”.
Against that background it is possible to have some sympathy for the Council as they decide their short term economic recovery strategy.
One of the few measurable actions arising from the report is a request to central government for a business support grant of £15 million (possibly £10 million depending on which paragraph of the report you read, 51 or 60).
The council will also ask for £10 million for skills training.
Mostly the 1 year plan though is “talking”, “developing”, “working with”, “lobbying” and “facilitating”.
NB. The Council has revealed details of some of its visitor marketing plans. . As reported yesterday, £100,000 will be spent on marketing over the next 5 months.
