There are fears that companies will start laying off staff when Chancellor Rishi Sunak’s job retention program – which pays 80 percent of the wages of workers on leave – ends in October.
Margie Oliver, head of business and skills consulting services, said economic modeling suggested around 3,000 jobs could be lost by early next year in Redcar and Cleveland due to the crisis coronaviruses.
She said: “The actual picture may be very different for all we know, but that’s the predicted figure as a result of covid-19.
“There are a lot of them and obviously we’re trying to encourage and speed up as many investment projects as possible to try to mop up some of the people affected by this.
Ms Oliver said there was particular concern about the impact on young people, who should bear the brunt of the layoffs.
Official figures show that between April 2019 and March this year, the unemployment rate in Redcar and Cleveland averaged 6.1%.
This compares to 5.6 percent for the North East as a whole and 3.6 percent in England, Scotland and Wales.
Meanwhile, in June of this year, 13.4% of 18-21 year olds in the borough were claiming benefits mainly because they were unemployed.
This compares to 10.6% in the North East and 8.8% in England, Scotland and Wales.
Ms Oliver said work was underway in collaboration with JobCentre Plus on a pilot project that could see a new youth employment center established in the borough, as well as in other locations across the country.
Tory Redcar MP Jacob Young said he was very concerned to hear the council’s gloomy job forecasts.
He said: “We have always been honest with the public that not all jobs can be saved.
“The Chancellor told the House of Commons that the Independent Office for Fiscal Responsibility and the Bank of England both predicted significant job losses.
“But rather than simply accepting mass unemployment as an inevitable outcome, the government has announced a series of additional measures designed not only to protect jobs, but also to create new jobs as we revive the economy after the lockdown .
“To help councils like Redcar and Cleveland weather the storm, the Chancellor offered a number of funds that were initially to be released at a later date. ”
Mr. Young said a Town Deal fundraising pot would help the board generate jobs and growth for Redcar.
He added: ‘Then there is the £ 750,000 of decentralized funds released to the council to be spent on a project ready in spades.
“Add to that the Kickstart program which will directly pay employers to create new jobs for any young person aged 16 to 24 at risk of long-term unemployment.
“We are also doubling the number of work coaches in JobCentres, increasing the flexible support fund, expanding the rapid response service, expanding the work and health program and developing a new program to support the long-term unemployed.
“Hard times are ahead, but the support is there and it will stay there until the recovery is in full swing. “
Simon Clarke, Conservative MP for Middlesbrough South and East Cleveland, said: “From the onset of this crisis, the government made it clear that this was not just a health emergency, but also an economic emergency. .
“These are incredibly difficult times for our region in particular.
“It is no secret that we entered this crisis with an economic disadvantage compared to other parts of the UK.
“But with the government determined to put Teesside at the forefront of its economic recovery plans and with infrastructure work at the new Teesworks beginning, there is a bright future for our region. ”
Mr Clarke said a £ 160bn plan put in place by the government was protecting jobs, incomes and businesses across the country.
The government has also supported more than 11 million people and jobs through job retention and self-employment programs and has helped more than one million businesses protect jobs.
He said: “My colleagues from the Department of Housing, Communities and Local Government and I continue to work hard on projects such as the Future High Streets Fund which will help revive cities like Loftus.
“Upgrading remains at the heart of the government’s agenda.
“In the short term, things can be very difficult for those directly affected by the job losses.
“But the government will continue to do everything in its power to provide support where possible. “