Recession

Action
Plan
2009
 BRISTOL CITY COUNCIL - RECESSION ACTION PLAN

1. INTRODUCTION

1.1 As the UK finds itself in the 3rd quarter of a global recession, no part of the country
is immune to the rapid economic downturn, although the experience will vary in scale and
severity in different places. Like everywhere else, Bristol is feeling the effects of the
downturn, which clearly need to be monitored and understood to assist the council and it's
partners to respond most effectively to support residents and businesses through a very
difficult time. This is important not only to mitigate the effects but also to plan and prepare
to ensure Bristol is in the best position to recover from the recession. Whilst the city
council has direct responsibility for delivering a number of services to people and
businesses, it also has a community leadership role in relation to facilitating action from
other agencies such as Bristol NHS, and partners in the business sector. The council will
need to work closely with these other partners through the Bristol Partnership and other
partnering arrangements to ensure that all are playing their part, and that efforts are fully
co-ordinated with each other.

2. NATIONAL PICTURE

2.1 The International Monetary Fund Report 'World Economic Outlook' published in
January 2009, shows that the UK economy has shrunk from 3% in 2007 to 0.7% in 2008
and revises forecasts further downwards to -2.8% in 2009 , before rising to 0.2% in 2010
and then on to positive figures from 2011 onwards. Opinions differ amongst experts as to
the overall severity and duration of the recession but the causes are generally agreed as:

● credit crunch - reduced availability of loan finance;

● energy and commodity cost instability;
● reduced consumer spending ;
● slowdown in financial services;
● housing/construction

2.2 At December 2008, unemployment stood at 1.92m with the claimant rate
increasing by 3.6% on the previous year. Different sectors of the economy are likely to
perform differently with fewer job losses expected in the the relatively high performing
sectors of Health and Care, Education, Food Retail, Property, IT, R&D and non
professional business services. Manufacturing and construction are likely to see the
greatest number of job losses, with financial and other professional services also
decreasing.

3. REGIONS

3.1 A recent LGA report identifies London and the South West as the regions least
vulnerable to job losses owing to the low concentration of jobs in the high risk sectors. The
total vulnerability in the region is an estimate 167,000 or 6.4% of total jobs. As the regional
capital however, and home to regional and national HQs, particularly in the finance sector,
Bristol may well fare worse than the regional average.
4. IMPACT OF THE RECESSION ON BRISTOL

4.1 It is difficult to be precise about the impact of the recession on Bristol as data is
collected for different periods of time and different geographies. There is also a good deal
of anecdotal evidence reported in the local press which is not always accurate and cannot
be relied upon, but is nevertheless influencial in shaping people's perceptions. The best
available indicators for assessing economic performance in Bristol are the following:

● numbers of jobs
● levels of worklessness
● land/property enquiries
● business growth/decline
● forecast redundancies

4.2 There are also other pieces of information collected by the council and it's partners
that can assist in understanding trends in service demand.

Levels of worklessness

4.3 In spite of it's relative vulnerability because of the size of its financial services
sector, to date Bristol is out-performing the UK average. The claimant count in Bristol in
December rose by 2.4% to 7,349 against 3% in the UK, and 3.4% in the Core Cities.

4.4 Bristol may suffer relatively high job losses in 2009 as a consequence of the size
and importance of its financial services and banking sector. These losses are most likely
to occur in 2009. However, its diverse business base, relatively small manufacturing sector
(9%), high skills levels and traditions of entrepreneurship will put Bristol in a better position
to recover from the recession than competitor cities in the UK. People losing jobs from the
financial services sector are more likely to have transferable skills which will make them
more employable in other sectors. Given that Bristol is outperforming the UK it is unlikely
that downturn in Bristol is likely to the worst case scenario of -2.5% but it could well be
around 2%.

4.5 Another factor impacting on the employment figures in Bristol is the decline of
economic migration and the return of eastern European and particularly Polish workers to
their countries of origin as a result of the low value of Sterling against the Euro and decline
in new job opportunities. The effect of this is to release low skilled job vacancies onto the
market making them available for unemployed people.

4.6 Up to November 2008 the sectors showing the highest flow of claimants into
unemployment were: elementary (29%); sales and customer services (15%); skilled trades
(13%) and administrative and secretarial (11%). Those showing the lowest were
managerial, professional and personal services.

4.7 Of all sectors of the economy only health, education, and public administration have
shown stable or increased numbers of jobs. However, losses are expected in the public
sector as a result of increasing budget constraints and loss of income for local authorities.
Numbers of Businesses

4.8 In the period July - October 2008 the number of businesses in Bristol fell 1.1% from
17,606 to 17,412. The number of vacancies reported by industry were the lowest in
manufacturing, construction and banking, finance and insurance.

4.9 Job Centre Plus have recently registered 60 vacancies for new Asda Living store in
Easton and 300 in 10 retail hotspots across the sub region, Waitrose and Somerfield and
Tesco are expanding. New jobs have continued to be created through inward investment
and business expansion. ABS Biodeisel is planning a £21m biofuel production facility at
Avonmouth docks; Hargreaves Lansdown are building a £30m new HQ at Harbourside;
Rolls Royce have won a £258m UK helicopter contract; Orange have opened one of 2 UK
'technocentres' in Bristol; environmental technologies companies are planning from £1 -
2bn investment in and around the sector cluster at Avonmouth docks.

4.10 Between July and October 2008 the number of jobs in Bristol increased by 0.83%,
rising by 1,915 from 230,545 to 232,460. The opening of Cabot Circus with 2,900 new
jobs accounts for some of this but it probably masks a general downturn particularly in the
hospitality, finance, manufacturing, aviation, construction, housing and retail sectors.

Land and Property enquiries

4.11 Commercial property agents report office enquiries down significantly compared to
the same time last year, and that development and investment markets are exceptionally
quiet. There is some demand for cheaper, refurbished Grade A space, previously shunned
by the market.

4.12 Agents expect office prices to hold steady, driven by the underlying shortage of
supply. The market is likely to see Bristol as a good place to invest once the current crisis
passes and is therefore, alongside London likely to be the the first to recover.

4.13 Demand for industrial and R&D facilities at Avonmouth however are holding up well.

5. RESCUE PACKAGES

Nationally

5.1 Over the past 6 months a number of fiscal measures have been announced and
implemented by the government, designed to stimulate demand in the economy. These
include:

● £40 bn recapitalisation of banks;

● interest rate cuts to historic lows;
● reduction in VAT;
● raised pensions;
● increased Child Benefit for the first child;
● stepping up investment in digital technologies and high skills industries;
● guaranteeing a proportion of mortgage interest payments for up to 2 years;
● creating an additional 35,000 new apprentices in the public sector (15,000 in local
government).
● lending facilities for SMEs of up to £21bn;
● supporting local authorities that want to build social housing;
 ● release £100m Local Business Growth Initiative funding to local authorities;
● investing £500m in Job Centres for advice and training;

Regionally

5.2 The South West RDA are providing a raft of financial and advisory measures:

● a new Business Loan Fund of up to £10m for a small number of ambitious plans
who are unable to secure loans from commercial banks or private investors. Loans
of up to £250,000 will be available early next year;
● 3 year R&D grants of £5,000 - 500,000 available from April 2009, run by Business
Link;
● Enhance the Graduates for Business programme;
● expanding the work of Business Link - financial advice and guidance on how to
survive in difficult times; information on new business opportunities and markets;
enhancing Train to Gain;
● access to loans of up to £50,000 from the Community Finance initiative (CFI);
● investment in a programme for Union Learning Representatives to promote training
in businesses and to provide additional redundancy support to that provided by Job
Centre Plus;
● discussions with major banks to ensure that business in the region can quickly draw
down funding from the European Investment Bank;
● a Regional business Forum has been established to ensure close contact with
business representative organisations to gather intelligence on business problems
and to develop solutions;
● an intelligence service to capture key data on the state of the regional economy;
● commitment by the RDA to meeting the government's target of paying invoices
within 10 days;
● increase procurement spend from 14% of the RDA's budget to 20% from SMEs;
● establishing a Green Opportunities Fund to help SMEs meet the costs of resource
efficiency;

5.3 Job Centre Plus have launched a new Rapid Response Service for employers and
employees including:

● a new offer to employers comprising a redundancy pack providing advice and

guidance on handling redundancies;
● contacting all employers declaring 20 or more redundancies but on stand-by to help
employers of all sizes;
● a Job Kit for employees which has a set of guidance and support on benefits and
how to look for a job;
● access to extra government support to boost job readiness preparation, job search
activities and increase skills training over the next 3 years;
● working with partners such as the Local Authorities and LSC to ensure that
employers and individuals involved in redundancies have access to these
packages;
● a new leaflet for employers which will help them to help their employees;
6. WHAT IS BRISTOL CITY COUNCIL DOING?

6.1 Bristol City Council has established a Recession Action Group chaired by Jon
House, Deputy Chief Executive. This has developed an Action Plan (cf Appendix 1)
compiling actions already underway and being taken in response to the pressures of the
economic downturn on individuals, businesses and the council itself as service provider.

Some of the key actions are:

● a review of some recent planning approvals to see if conditions can be amended to

encourage commercial investment in new jobs and homes;
● stepping up the business search and aftercare service for investors;
● co-ordinating and targeting provision of debt advice using road shows;
● producing redundancy advice packs and making them available to advice centres
and front line services;
● circulating an advice leaflet to all businesses with the business rate demand in
February;
● circulating advice to council tax payers with the 09/10 demand;
● identifying pressures on social care providers and delivering support to avert market
failure;
● extending use of apprenticeships;
● delivering more than 1320 new affordable homes over the next 3 years, through
partnership work with registered social landlords, building on the council's success
in exceeding its targets for affordable housing in 2008/09, by bringing back private
housing into use and working with RSLs on new schemes;
● stepping up guidance and training to front line staff including housing officers and
customers services centre staff, to help people access the help they need;
● extending payment periods for businesses to pay business rates;
● maintaining a database of companies at risk to target provision of support;
● maintaining the capital programme and increasing borrowing;
● spending over £5m a year to improve heating in council housing and insulating
privately owned homes;
● launching the Bristol Business Guide 2009 providing vital advice and information to
companies;
● co-ordinating housing and council tax benefits advice with Job Centre Plus for staff
made redundant as a result of business closures.
● Working with faith groups and organisations providing social and pastoral care to
explore collaboration in providing advice, information and signposting;
● Sponsoring the Evening Post's Bristol Fights Back campaign;
● working with West at Work to engage a further 10,000 individuals over this period
with the aim of moving 2,000 individuals into employment, with an estimated 350 of
these coming from the more deprived communities in Bristol;
● delivering a £2.5m grant programme to community organisations working to support
vulnerable communities;
6.2 To ensure actions are co-ordinated across the West of England, the council has
been involved in establishing an Area Task Group with its partners on the West at Work
Board. This brings together the four West of England councils, the South West Regional
Development Agency; Job Centre Plus; Learning and Skills Council; Connexions and City
of Bristol College; GWE Business West and Business Link. It is building on the success of
the West at Work programme that has helped thousands of local people take up new jobs
and training opportunities, including many of the 4,000 created at the city's new Cabot
Circus shopping and leisure development.

6.3 To build the base for future economic recovery the council and its partners will
continue to co-ordinate planning, inward investment and property services, with
opportunities to attract public funding (RFA, Regional Infrastructure Fund, City Regions
Forerunner Pilots), to support industries with growth potential, specifically, environmental
technologies, creative industries and bio-technologies.

Additional Proposals

6.4 Last week the government announced the annual allocation of Local Area Business
Growth Initiative Grant to local authorities. As Bristol's allocation is higher than the
assumptions made for budget making purposes, 'windfall' funds have become available to
support further measures to assist Bristol residents and businesses in weathering the
recession.

6.5 The Cabinet's proposals for the allocation of an additional £1m, subject to Council
agreement as part of the 09/10 budget, are as follows:

● launch an enhanced apprenticeship and trainee programme in partnership

with the City of Bristol College across the council, drawing down on additional
national investment of £140m. There will be £190,000 invested to build additional
internal capacity to source placements within the council and support the
employment of a substantial number of apprentices; the council will also take this
opportunity to streamline its work on apprenticeships, Building Futures, graduate
trainees and positive action programmes, and to work with other public sector
partners to extend apprenticeship programmes; the City Council is one of the
largest employers in the South West and will be offering opportunities across a wide
range of its services giving people with a diverse set of skills the opportunity to gain
a placement;

● an additional £310,000 to provide 15 staff to accelerate processing housing

benefit claims - making sure that claimants receive their benefits as quickly as
possible;

● an additional £170,000 for a basket of initiatives to enhance welfare benefits take

up work, and advice to reduce levels of personal debt, homelessness and
increase access to jobs provided by in house, voluntary and community agencies;

● participation in the roll out of the mortgage rescue scheme, recently announced by
housing minister Margaret Beckett;
 ● an additional £300,000 as a contribution to support our most deprived
communities, match funded by members of the Bristol Partnership, which will
make its recommendations for allocation to Cabinet; this funding will be aimed at
tackling the social impact of the recession on health, crime, incidence of domestic
violence, relationship breakdown and increased homelessness as well as
supporting local social enterprise;

● utilising a city council branded 'Jobs Bus' on the model of the highly successful
Cabot Jobs Bus, to deliver targeted jobs advice to more hard to reach unemployed
people;

● extending the Ways2Work initiative (formerly IEEI) to help an estimated 850 people
from our more deprived areas, access jobs and training over the next 2 years as
well as provide parents with access to childcare to help them return to work;

● prompt payment of invoices from SMEs;

● £30,000 additional support to the Bristol Credit Union to help prevent people
falling into the hands of loan sharks.

7. WHAT ARE OTHER AUTHORITIES DOING?

7.1 Local authorities across the country are adopting a range of different measures
providing support in addition to national and regional partners, some examples are:

● Wakefield is offering a small number of people at risk of repossession interest free

loans to make sure they can stay in their own homes;
● Lancashire is also identifying people who are not claiming their full entitlement to
welfare benefits;
● Leeds is also offering enhanced debt advice and counselling for local families;
● Derbyshire is helping local business tender for council contracts;
● East Sussex is offering small businesses specialist advice on surviving the
downturn, in partnership with business Link;
● Durham County has launched a rights to warmth partnership with the PCT, Social
Care and Housing teams;
● Sheffield has appointed a troubleshooter to help expanding business by speeding
up planning applications; paying local suppliers earlier; promoting local procurement
and providing business start up support;
● Nottingham is issuing coupons for cash reductions at leisure centres and museums;

7.2 The LGA has launched a four-point plan supporting business;

● encouraging councils to buy locally wherever they can;

● urging businesses to claim small business rate relief;
● calling on government to give councils more power over business rates;
● encouraging councils to prioritise improvements such as street cleaning, CCTV and
no-drinking zones.
8. NEXT STEPS

8.1 A report on the Impact of the Recession is the main agenda item for the Sustainable
Development and Transport Scrutiny commission at its next meeting on 19/02/09.

8.2 A report will go to the next meeting of the Bristol Partnership Executive Board on
25/02/09 to discuss how partners can work together to provide even more support.