Credit crunch could cost 20,000 jobs

THE credit crunch could see 20,000 people in Essex lose their jobs, the leader of the county council has warned.

Elliot Furniss

THE credit crunch could see 20,000 people in Essex lose their jobs, the leader of the county council has warned.

New research by financial forecasters Oxford Economics has predicted that up to 15,000 more workers could be put out of work by the economic downturn in the coming months to go with the 5,000 who have already been laid off.

The alert was issued by Lord Hanningfield as he announced groundbreaking plans to help out families and businesses yesterday, with a £3million tax return promised for the most vulnerable people in Essex.

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Lord Hanningfield unveiled a string of proposals including plans to create an “Essex Bank” to help support local businesses as well as moves to make the council's own tendering process simpler and more open to smaller companies to help stimulate the local economy.

Paul Kirkman, leader of the Labour group and head of the opposition, said he was “suspicious” of the timing of the announcement with council elections taking place in the year ahead.

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Speaking at County Hall in Chelmsford, Lord Hanningfield said he welcomed the Government's announcements on cutting VAT and plans to spend £60million on the A12 but said the county council also needed to act.

He said: “There are several initiatives we want to take to support the Essex economy and the Essex people.

“We're looking at how we might give a council tax rebate to 30,000 of our most vulnerable inhabitants.”

He said the scheme would see the first rebates made early next year which could lead on to a wider-reaching scheme to help out serving or former members of the armed forces and their families.

The proposals were made following a special session of the Essex Management Board, the body that represents the Essex public sector including the police, fire, health and higher education sectors.

Lord Hanningfield, also chairman of the board, said: “Our residents are crucial to us; supporting them is why we are here.

“And local government and our public sector colleagues are big players in the local economy. Local authorities in Essex will invest nearly a billion pounds supporting the county's economy in 2008-09.

“It's our duty to do whatever we can to assist in countering the effects of the economic downturn.”

Lord Hanningfield said the council's investment in the schemes would come from its “various reserves” and money put aside for “a rainy day”.

He added: “A lot of these things are supporting small firms and vulnerable people - that really is what we should be trying to do.

“Essex has been somewhat protected in the past. We have 130,000 people who go into London each day to commute.

“That's why, compared to the last down-turn, we will have quite a big hit in Essex.”

The key proposals, which will now be discussed by the full council at a meeting on Tuesday, include:

n Direct financial assistance in the form of a lump sum payment to 30,000 of the county's most vulnerable households, principally those over 80 years of age. This would be equivalent to relief of £100 off council tax bills.

n The creation of a “Bank of Essex” to act as an intermediary and release European Investment Bank funds for small and medium enterprises. This could be linked with the development of Foundation East - a community finance initiative providing high-risk small business loans of up to £20,000.

n The development of “Essex Savers”, Essex's only credit union, into a sustainable £2million business.

n An initiative to signpost the availability of the small business rate relief scheme that 60% of those eligible fail to take up. The amount unclaimed by eligible Essex businesses is approximately £50million.

n Creation of a county wide “Essex Apprentice” scheme to build upon the existing programme run and funded by the public sector in the county. The scheme would make apprentices available to small businesses that may otherwise be unable to take young people on in the current economic conditions.

n The launch of a major campaign to encourage people to take up unclaimed benefits that they are entitled to. More than 30,000 households in Essex - nearly 6% of the total - are not getting the help with their council tax to which they are entitled.

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