East Devon unemployment rate could soar to 10% in the next six months, district council chiefs are warned

The unemployment rate in East Devon could hit 10 per cent within six months because of the devastating blow the coronavirus pandemic has dealt the economy. 

Council chiefs heard yesterday that a third of the district’s workforce was furloughed at the height of lockdown.

And unemployment rates have already risen from two per cent to five per cent, East Devon District Council’s (EDDC) cabinet was told.

Their modelling predicts this could double within the next six months, writes Local Democracy Reporter Daniel Clarke.

The meeting heard that 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 foreboding was starting to become a reality.

Members were also told on Wednesday that there had been significant impacts on the tourism and hospitality, retail, construction and manufacturing sectors.

There are also high levels of youth unemployment in the latest jobseekers claimant count figures – as well as a rise amongst those over the age of 50.

Service lead for growth, development and prosperity Andy Wood said in a report: “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.

“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.

“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.

“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.”

Councillor 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.

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-plus age group it has rocketed from 295 to 920 in the same period.

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

Cabinet members agreed to note the work that has been undertaken to manage the immediate impact of the pandemic.

They also supported co-ordinating economic recovery activity through a ‘Team Devon approach’ and that a report to their next meeting will set out the resources needed to support economic.

A second report in six months’ time will detail the progress made.

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