‘Large scale redundancies’ forecast across East Devon

Unemployment rates in East Devon could hit 10 per cent within the next six months after the devastating blow the coronavirus pandemic and lockdown has had on the economy.

At the height of the pandemic, a third of the entire workforce within the district was furloughed, and unemployment rates have already risen from two per cent to five per cent.

But council chiefs’ modelling predicts it could double within the next six months, and said that the loss of 860 jobs at the Oscar Mayer factory in Chard which employed people from the very east of the district showed that some of the foreboding messages were starting to happen.

East Devon District Council’s cabinet meeting on Wednesday night heard that there had been significant impacts on the tourism and hospitality, retail, construction and manufacturing sectors, as well as high levels of youth unemployment, and in the latest claimant count figures, a rise in worklessness amongst those over the age of 50.

Andy Wood, service lead for growth, development and prosperity, in his report to the meeting said: “The spectre of large scale redundancies in the final quarter of this year and the beginning of next year is therefore very real. We can expect rises in unemployment, more business closures and ongoing challenges for the local economy.”

Cllr Paul Hayward, cabinet member for economy, said that the job losses in the Oscar Mayer factory in Chard were an omen of what may be coming in the months to come.

Cllr Paul Hayward
Cllr Paul Hayward

The meeting heard that Universal Credit claimants in the 16-24 age group had risen from 190 in September 2019 to 660 in September 2020, and in the 50+ age group, had rocketed from 295 to 920 in the same period.

He added: “The needs of the groups are profoundly different and it needs targeted action to help them.”

The cabinet agreed to note the work that has been undertaken to manage the immediate impact of the pandemic, to support co-ordinating economic recovery activity through the Team Devon approach, and that a report for next month’s meeting which would set out the resource requirements associated with supporting economic recovery be produced. A second report in six months’ time detailing the progress made with supporting economic recovery in the District will also come forward.

File photo of a Flybe plane
(Image: Geograph)

Mr Wood added: “East Devon was hit early with job losses at Axminster Carpets and Flybe and we have a difficult winter ahead of us and unemployment could go from two per cent to 10 per cent. The report was written prior to Oscar Mayer job losses in Chard so some of the foreboding messages are starting to happen.

“As we enter a period of more restrictions, and a possible cycle of further national or local measures, the next round of economic consequences are hard to predict with any degree of certainty. There is though emerging evidence that the pace of recovery is now slowing.

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“The spectre of large scale redundancies in the final quarter of this year and the beginning of next year is therefore very real. We can expect rises in unemployment, more business closures and ongoing challenges for the local economy.

“A recent national survey found that the Covid-19 pandemic had cost the average small business nearly £12,000 with 25 per cent believing that that they are at risk of closure in the next six months. Over half of the businesses struggled to access government support or understand the eligibility criteria. With an economy that is dominated by small and micro enterprises this is clearly a cause for concern.

“The impact of the pandemic on the local economy has been profound. These have also been felt disproportionately by some age groups, places and sectors. The pandemic is likely to have lasting, structural impacts. The surge in online spending is likely to be one of these. Businesses will need to adapt to the new normal in this respect and the business support programme now being rolled out will help to facilitate this.”

Devon Live – Devon News