LB Hounslow economy expected to be second worst in whole of London

Image above: Hounslow House

The London Borough of Hounslow has published a report into its performance during the coronavirus emergency and its plans for recovery.

While the borough has done well at coping with the crisis, the future looks bleak, as economic forecasting for London puts Hounslow as the second to worst affected borough in the whole of London, because of its reliance on the aviation industry for jobs.

‘COVID-19 has been, and continues to be, the biggest threat to local residents and businesses in the London Borough of Hounslow’s fifty-five-year existence’ said Chief Executive Niall Bolger in the report.

‘The reach of this global pandemic extends beyond the clinical. For now, the precise long-term term economic and social impacts of COVID-19 are unknown. We do know, however, that they will be significant and damaging’.

“Aviation won’t recover for five to ten years” Council Leader Steve Curran told The Chiswick Calendar. “We have 42,000 residents whose jobs are reliant on aviation. That’s a third of the borough.”

Infections in care settings lowest in London

The Council’s report says: ‘Our local activity has coordinated an effective response to COVID-19’ and one proof of the assertion can be seen in Hounslow’s record on Covid-19 infections in care settings.

‘Having responded early to the national shortage of PPE and mitigated the risk of business disruption to borough care services, we have been providing PPE in line with national guidance through the West London Procurement Alliance and independent sourcing within the borough.

‘We are extremely grateful to all of the organisations, individuals and community groups who helped us in this effort’.

The Council identified at the very beginning that there would be adverse impacts on care homes and care providers in the Borough, the report says, in a way that didn’t happen nationally until considerably later in the pandemic.

‘This in no small part enabled the Council and partners in West London to support the resilience of our community care response. In Hounslow, this has meant the level of infection in our care settings remains the lowest in London’.

The Council set up an emergency response team, in addition to carrying out the usual business of administration. Put together in just two weeks, the Community Hub has supported 22,500 shielded residents and thousands more vulnerable residents.

The report pays credit to the hard work and generosity of community groups who have pulled together to support the Council’s efforts, and this interaction with the community is one of the positives the Council wants to retain during the recovery.

Responding to the report, which was presented to Cabinet earlier this week, Cllr Joanna Biddolph, Leader of the Conservative Group, said:

“I want to thank the council’s staff for the way they have coped with and adapted to the crisis.  Their support has been vital in keeping existing services running and in delivering new ones”.

Economic prospects

There was a 52% increase in the number of people claiming unemployment in Hounslow in April. These figures are expected to rocket as the Government phases out support for businesses.

Passenger numbers through Heathrow have fallen to an all time low – down by 97% in May 2020 compared with the same month last year. Chief Executive John Holland-Kaye warned today that efforts to protect frontline roles were “no longer sustainable”. The company, which has around 7,000 employees, has already cut more than 30% of managerial roles. Now it’s looking at shedding jobs amongst security staff, baggage trolley operatives as well as engineering and maintenance staff.

As well as Heathrow itself, there are all the airline jobs – British Airways and Virgin Atlantic have already announced job losses – and all the warehousing, airport hotels and catering firms which are reliant on business from the airport, as well as indirect jobs in the wider supply chain.

“It handles the biggest volume of imports and exports in the whole country” said Steve Curran.

At the Cabinet meeting earlier this week which accepted the report and its recommendations, Cllr Katherine Dunne, Cabinet Member for Communities and Workforce, said the borough has to take this opportunity to grow a Green economy, with sustainable industries which will not have such an adverse effect on climate.

It is also essential that we diversify, said Steve Curran, so we are no longer as dependent on one industry. One possibility that is being looked at is to use the massive amount of cargo space for market gardening, taking the area back to its historical roots.

An economic recovery is expected to be gradual and long term.  With a 40% drop in economic activity forecast, the council is bracing for an increase in homelessness, domestic abuse and violence and all the attendant social problems which go alongside unemployment.

“It’s the cohort of young people leaving school who I am most worried about” Steve Curran told The Chiswick Calendar.

“Jobs are drying up and it’s a disaster that the Government has forced TfL to abandon free travel for under 18s. My concern is that the highly skilled people who lose their jobs at Heathrow will mop up all the other jobs available. I am a naturally optimistic person but this is a fundamental shift and the outlook is very bleak”.

Speaking for the Conservatives, Cllr Biddolph said:

“Many of us in Hounslow have an ambivalent relationship with Heathrow but there is no avoiding the fact that how quickly the airport recovers will be the key driver of what happens to the economy of the borough. The local authorities around the airport need to work together in response to the job losses that have already been announced.

“The key challenge for the council now will be to respond to the economic problems effectively.  To do so, they need to involve local businesses, voluntary organisations and consult widely”.

Images above: Rishi Sunak, Chancellor of the Exchequer; Steve Curran, Leader of Hounslow Council

Funding gap

The Council’s report outlines the funding gap it faces. In the short term, the additional cost of coping with the coronavirus emergency is estimated at £15 million, while the expected loss of income from unpaid Council Tax and Business Rates, and reduced revenue in areas such as parking and commercial events, is calculated at £14 million. That’s a £29 million hole in the budget.

LB Hounslow has received £19.56 million from central government in the form of grants – COVID-19 Emergency Grant, COVID-19 Council Tax Hardship Grant, Adult Social Care Infection Control Grant and Discretionary Business Grants funding – but says:

‘There is a clear and significant gap between this figure and the cost we are having to bear. This is in-year cost only and doesn’t not take account of longer term pressures we will experience such as temporary accommodation’.

‘The Chancellor and Secretary of State may have originally said they would do whatever to cover costs but have actively stepped back from that promise as the pandemic continues and we do not have clarity or certainty that any business grant will be supported into the mid-term given COVID economic recovery will not be immediate’.

The road to recovery

Under the umbrella of the Hounslow Recovery Programme Board, four task forces have been set up to look at Economic, Community, Social and Environmental recovery.

The Council’s report says the Economic Recovery and Regeneration Taskforce has commissioned external analysis from Oxford Economics, a leader in global forecasting and quantitative analysis, and Inner Circle, a regeneration consultancy, to inform the process of developing an action plan.

‘This in-depth analysis, combined with the work of three subsidiary groups looking at: economic impact and jobs and skills; housing and construction; and town centres, regeneration, and planning, will provide a detailed picture of the economic situation locally. This will support a programme of economic recovery and regeneration’.

The work of the two outside agencies is expected to be discussed at  the first meeting of the Hounslow Recovery Programme Board in a few weeks’ time, to which major employers in the borough such as BSky B, Seagrove and Brentford Football Club will be invited to advise.

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