Fifth of local councils see some evidence of upturn

Friday 3rd July 2009

One in five local councils claim to have witnessed some evidence of an upturn in their local economies, but concerns still exist as unemployment rises and business continue to rise.

A survey of leaders and chief executives conducted by the Local Government Association (LGA) published today looked at the impact the recession has had on businesses, residents and local authorities themselves.

The LGA warns the effects of the economic downturn will continue to be felt for a time after recovery is officially recorded due to the lag of unemployment behind GDP.

Over the last six months, 90 per cent of local authorities have seen an increase in the number of people seeking welfare or debt advice and 86 per cent have seen an increase in applications for housing benefit.

And there has been an 83 per cent rise in demand for business support services.

Of those councils surveyed, 22 per cent said they thought there were early signs of an upturn in their local area, and of those 62 per cent believed their local economy would start recovering within the next nine months.

In terms of their own finances, 42 per cent of councils said they had cut jobs over the past six months, and 34 per cent had introduced a recruitment freeze.

Councillor Margaret Eaton, chairman of the LGA, said: "Many parts of the country are still feeling the sharp effects of recession. Different parts of the country are faring very differently to others which underlines how a national, one-size-fits-all solution to getting us out of the downturn simply isn't going to work.

"While some councils are seeing early signs that an upturn in their local economy may be on the horizon, all are bracing themselves for a long hard slog even after the economy starts growing again.

"Previous recessions have taught us that unemployment can keep on rising even when growth returns to the economy. Councils are acutely aware that local people and businesses will need continued support, and are taking difficult decisions to balance the books and invest money where it is needed most."

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