Economic Activity in Hounslow Could Contract By 40%

Borough set to be second worst hit by pandemic in London

Hounslow Could be facing a 40 per cent economic downturn due to coronavirus, making it the second worst-hit London borough.

Cabinet members are set to discuss a recovery plan for the borough and its response to coronavirus in a meeting on Tuesday, 9 June.

But in a report published ahead of the meeting, it said unless the council acts the economic and social costs will be “catastrophic”.

It read, “We know that as lockdown restrictions are lifted, there will be new issues to address. We expect further approaches from people facing homelessness, people suffering from domestic abuse and violence; we know there will be job losses and businesses will suffer.

“Our community hub is already receiving calls from people facing financial hardship and we have also provided business grants to over 2,000 local firms.

“According to the Office of Budget Responsibility, Hounslow is projected to be the second hardest-hit London Borough, with a 40per cent drop in economic activity forecast. Residents and communities will feel under incredible pressure. Unless we act, the economic and social costs will be catastrophic.”

The forecast for Hounslow comes after analysis from the Office of Budget Responsibility looked at how different industries could be affected due to a three-month lockdown in the UK.

Head of finance, Cllr Shantanu Rajawat, said: “The analysis reflects the fact that Hounslow’s local economies are focused around sectors likely to face particularly severe impacts: including construction, wholesale and retail, accommodation and food, and transport and storage. The impacts of Heathrow within this appear influential.”

Council data shows that 12,000 residents directly employed by Heathrow, while a total 45,000 are believed to be employed via Heathrow including through indirect supply chains and supporting businesses such as hotels and restaurants.

Cllr Rajawat added: “Heathrow is a key driver for the Hounslow economy…It is too early to know the exact impacts, and how many people and businesses will be affected when government schemes end.

“We have commissioned an economic study to quickly give an understanding of the impacts. This will particularly consider the impact of Heathrow on the local economy. It will provide us with a baseline for our economic development and recovery strategy and plans.”

He has written to Local Government Secretary Robert Jenrick urging for the Government’s plan to be flexible for local authorities to make a quick recovery.

In a list of demands for the Government to develop its funding model for local authorities, the borough chief called for a “clear, single strategy” for supporting the aviation industry, its workers and others relating to Heathrow.

It also called for a long-term funding solution for adult social care to replace the “increasing trend” of “one-off allocations”, and fully reimburse costs and loss of income due to coronavirus.

In the letter written on May 20, Cllr Rajawat said: “Economic data suggests that the financial impact of COVID-19 on Hounslow will be significant…To that end, we need to respond and respond quickly by taking the initiative and leading our community through the difficult years ahead.

“I write to you today to ask that funding models support this ambition and that the financial solutions you apply to local government are developed in a manner that supports councils to develop their own local sustainable solutions that are right for their communities.

“This will not only reduce the burden elsewhere in the state system but enable councils, their communities and business to more quickly drive economic recovery. To achieve that we need a long-term funding solution.”

Anahita Hossein-Pour - Local Democracy Reporter

June 8, 2020