The need for certainty in uncertain times
In his latest column for the Yorkshire Post, LEP Chair Roger Marsh OBE DL looks at the impact of the COVID-19 pandemic on businesses and the help and support LEP has put in place at this time.
As our region continues to confront the COVID-19 pandemic, its impact on our businesses and the people they employ over both the short and long term is a great cause for concern. Yet I am also hugely proud of the resilience and innovation demonstrated by so many in responding to these most adverse of circumstances.
As we near the scheduled end to the second period of national lockdown, we urge everyone in West Yorkshire to continue play their part to beat the virus by following the current rules and guidance.
At the time of writing, it is not yet clear what the Government’s post-lockdown plans are and the implications for West Yorkshire. After much negotiation between Councils and government last month, the region was due to be placed into the highest tier of local restrictions, only for this to be superseded days later by the announcement of the national lockdown.
Speaking to the local business community, this lack of certainty around the future is making it hard to plan effectively in what is already the most trying of circumstances. Many businesses that had done the right thing and kept staff on through furlough had banked on the £1,000 job retention bonus as an important part of their cash flow, which has been postponed.
Businesses have made great efforts to adapt to the current operating environment, bringing in safe working practices and innovating how they operate to keep serving customers. Prioritising public health and safety is the correct course of action, but if we are to come through this crisis, we need a comprehensive package of support for businesses and individuals affected by those important controls – and more importantly, the certainty to plan ahead.
The economic situation we find ourselves in is severe. By late summer, the UK economy as a whole was more than 9% smaller than at the start of the year - a far deeper economic contraction than the 6.4% fall in GDP seen during the financial crisis of 2008.
In West Yorkshire, almost 5,000 businesses were dissolved or liquidated during September and October. Part of this is the system catching up, as restrictions on business liquidations put in place earlier in the year were lifted in September, as well as reflecting the unprecedented economic environment.
The unemployment rate in West Yorkshire has risen by 87% since before the first lockdown began in March. While the extension to the furlough scheme has mitigated some impact on job losses, jobless claimant numbers in West Yorkshire now stand at almost 107,000. Bradford has the highest youth unemployment rate in the country, and without steps to engage this cohort with skills, training and job opportunities, we run the risk of real damage to the life chances of a whole generation.
Yet in the midst of this, there are some grounds for cautious optimism. Local restrictions and the national lockdown have caused a slowdown in hiring, but although online job vacancies in our region are below where they were in March, they are higher than in summer. While the retail, hospitality and arts sectors continue to struggle, we are seeing increased demand in health and care, IT and finance.
The LEP continues to see high levels of demand for support from businesses across our region. By halfway through the year, it had helped over 2,500 businesses, and by the end of September had provided intensive support, which includes grant and/or one-to-one advice from a business support professional, to 1,100 businesses.
We have been clear that we need to strengthen health measures to keep people safe from the effects of COVID-19 while preventing further damage to the economy. And as we rightly seek to support business in the short term, we must continue to have regard for the long term needs of our region. I hope the Government will commit to support our £1.4 billion West Yorkshire Economic Recovery Plan, developed in collaboration with civic, business, trade union, health and third sector leaders.
It builds our region’s world-leading position in health innovation, maximises our capabilities as the UK’s fastest-growing centre for digital, has the potential to create up to 70,000 jobs and opportunities by becoming a net zero carbon economy by 2038, and nurtures our talent to reap the benefits of unleashing an entrepreneurial revolution.
Not only does the plan address the specific needs of our region’s economy and its people, but it fuels and supercharges the areas where we have the potential to make a major contribution to the national recovery.
Very few people could have predicted at the start of the year that as we head towards Christmas, we would be in the midst of the greatest social and economic crisis of our lifetimes. We are doing everything we can to support our region’s businesses, protect livelihoods and beat this virus. With the right national support both now and in the months and years ahead, we will be able to build a more positive future that works for everyone.
Roger Marsh OBE DL, chair of the Leeds City Region Enterprise Partnership and the NP11 group of Northern local enterprise partnerships