Recession hits North East communities hardest

Oct 23 2009 by Sam Wood, The Journal

A MAJOR new study has revealed that communities in the North East are the among the worst hit by the recession in the country.

But local authority and business leaders in the region rejected the findings and said they were doing everything possible to alleviate the impact of the downturn.

Credit reporting company Experian’s research combines three indicators – household financial stress, economic growth potential and long term unemployment risk – into an overall measure. According to their data, the five worst local authorities in the country are all in the North East.

South Tyneside and Newcastle councils, and Chester-le-Street, Sedgefield and Wear Valley, which are all now part of Durham County Council, are named among those most badly hit.

Charlotte Hogg, managing director of Experian UK & Ireland, said: “The tremors of the recession may have been felt in many households and businesses, but local and central government now needs to brace itself for the aftershock. So far, the public sector has been largely cushioned by Government investment and spending. But with unemployment rising, revenues falling and the need for public spending cuts, local authorities need to think how they can do more for less.”

Andrew Sugden, policy and membership director of the North East Chamber of Commerce said: “The region is over-reliant on public sector jobs, there is an enormous amount for us to be worried about but there is nothing in this report which we didn’t already know.

“And I would question how accurate it can be as it uses data from councils which don’t even exist any more.”

Paul Rubinstein, director of policy at Newcastle Council, said: “This report is alarmist in the language it uses and we think it is strange that Newcastle is so high up. We are putting in place and have put in place, many measures to alleviate the effects of the downturn.”

A South Tyneside council spokesman said: “Like all public sector bodies, we are experiencing significant budget pressures. These include the increasing cost of adult social care and increased demands around fostering and adoption services. Given these budget pressures, we will seek to maintain services in a challenging economic climate.”

A spokesperson for Durham County Council said: “The council recognises that we are all facing tough times.

“We are continually looking at various ways to generate efficiencies whilst at the same time improving our services. This includes initiatives to stimulate the local economy and jobs market, and to support our residents who are affected by the recession.”