‘Picture is rosy’ for staff seeking work

Mar 19 2008 by Adrian Pearson, The Journal

THE man tasked with finding work for the thousands of Northern Rock staff facing the axe has said the North East is “remarkably well placed” to handle the redundancies.

Alan Clarke, chief executive at development agency One NorthEast, has promised staff at the troubled bank that his rapid response unit can find them all jobs.

Mr Clarke last night said there were more than 1,000 jobs available in the financial services sector in Tyne and Wear, out of some 21,000 current vacancies.

He will be heading the Government appointed rapid response unit designed to find employment for the redundant workforce.

And despite the 2,000 losses, Mr Clarke said he was confident the region’s economy was not at risk and would continue to grow.

“This time of year there are slightly fewer jobs available, but at the moment there are 21,000 unfilled vacancies in the region, and 1,100 in financial services within the travel-to-work area,” Mr Clarke said.

“There are financial companies looking to expand in the region and others that we want to attract to the region. It paints quite a rosy picture, because with the Metro system we have such a good travel-to-work area and we have a lot more opportunities for people.”

Mr Clarke and One NorthEast have been in discussion with the bank for three weeks.

He said: “Without being complacent I’m very confident that by working closely with the company and the partners in this we can help find new jobs.

“In some cases they might want to completely retrain and we can help with that and some might want to set up their own company and that is why we have Business Link North East helping as well.”

“Yes, we can make these comments about how these things will be all right, but on the day you get this news it obviously is bad and does lead to uncertainty and I would not want to overlook that, but there is help available.”

One NorthEast wants to see the region’s wealth-per-head rise to within 90% of the UK average. And Mr Clarke said that while he was not counting his chickens, he was sure the North East had not lost sight of this goal.

“The regional economy is the most resilient it has been for many years. In the last year or two, the growth rate in the region has surpassed the national average in three years out of four and we have far greater diversity in our economy.

“So yes, it will be a setback and it would be wrong to say it would not be, but we here have the prospect of a very viable bank going back into the private sector in three years’ time employing four thousand people-plus and in the meantime finding alternative employment for the other two thousand.”

Last night the leader of Newcastle City Council called on the public sector to go shopping for a financial services company to come to the North East and help absorb some of the Northern Rock jobs losses.

Coun John Shipley also said the Government ought to consider moving civil servants to the North East. “Despite the grim news about Northern Rock, this could be turned into an opportunity for the region to encourage other financial services sector employers to move into the region.

“There are a lot of skilled employees of a high standard who would be very attractive to an employer in that sector – those companies in the City of London, and internationally, looking to have back office functions in parts of the UK cheaper than London.

“There is a lot of interest in moving here as labour costs and land values are cheaper than the South East.

“I would also suggest Government itself looks at its own departments and sees whether there are jobs which could come to the North East.”

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Jobs created as well as lost

THE loss of so many jobs from the North East economy is always a blow to confidence and while the recent history of the region’s employment patterns suggests some room for optimism, the state of the finance market is a cause for concern.

Successive rounds of manufacturing job losses have taken a heavy toll on the region’s economy, but over time those jobs have been replaced.

The Journal has carried many thousands of words down the years bemoaning the injustice of skilled and loyal workers being shown the door, but the resilience of our people and communities remains.

The mix of the economy has shifted fundamentally, with thousands of coal and manufacturing jobs being cut, and a move to more technology and service-led companies, as well as call centre employment helping to fill the void.

While we have lost major employers such as Swan Hunter, Electrolux, LG Philips and Atmel in recent years, replacement jobs have been generated.

The concern for Northern Rock staff is that the credit crunch is likely to see financial institutions taking a cautious view of expansion – though fortunately Newcastle Building Society is an exception.

Northumbria University principal lecturer in accounting and finance Richard Slack said: "All the banks in the financial sector face the issue of the global credit crunch and money is tight across the market. It is highly unlikely that you will have any bank seeking to rapidly expand any part of its business."

Mr Slack also pointed to the effects of Northern Rock’s shrinking business on those it does business with in the region.

He said: "The immediate impact is of the job losses, but beyond that it will be the suppliers to Northern Rock.

"There will be a lot of businesses within the North East that will be directly affected by Northern Rock. The Rock will be a very large commercial customer for some suppliers."

While sympathetic to those losing their jobs, North East Chamber of Commerce chief executive James Ramsbotham said it was important to see the job cuts in a wider context.

He said: "Most organisations have 10% staff turnover annually, so Northern Rock might lose 600 staff each year anyway.

"We also need to remember that the North East has taken in 60,000 East European immigrants over the four years since the EU was enlarged – that indicates the number of jobs we have created."