A recovery action plan is to be drawn up specifically tailored to help the West Midlands economy bounce back quickly once lockdown restrictions start to be lifted.
Political and business leaders announced on Friday they were working together to form a bespoke strategy capable of securing an effective and long-lasting economic recovery.
The move comes as research predicts that the West Midlands could be the UK’s hardest hit region.
A West Midlands Regional Economic Development Institute (WM REDI) report presented to the EIG, which brings together business leaders, central government, banks, trade unions, and local authorities including the West Midlands Combined Authority (WMCA), says:
* The West Midlands could be the hardest hit region in the UK, according to new research by the Centre for Progressive Policy
* Surrounding shires with strong tourism and hospitality sectors face being hit harder by the lockdown than the metropolitan area – Stratford’s economy could shrink by nearly half (46%) compared to 35% in Birmingham in the second quarter
* 65% of businesses say their cash reserves are dwindling fast and will be gone within six months raising fears for their longer-term survival.
Mayor of the West Midlands Andy Street, who chairs the EIG, said:“This lockdown is having a profound impact on our regional economy and the research suggests we could be hit harder than anywhere else.
“It is clear that this unprecedented lockdown will soon start to be lifted, and its crucial we are ready for that and have a clear roadmap to navigate our way through this difficult time.
“By preparing now, I’m confident we can secure a successful reboot of our economy and accelerate growth in key sectors.
“But it’s also important that the West Midlands has a clear voice in the recovery plans being drawn up by Government, and I will continue to lobby for that to happen.”
To help manage the impact on the West Midlands, the Covid-19 EIG is putting in place a number of immediate actions while the long-term recovery plan is drawn up. These include:
* Relaying crucial information to central Government
* Challenging regional banks to get as much money out the door as possible to support local businesses and SMEs
* Reviewing infrastructure plans to see what investment can be brought forward to act as a shot in the arm to re-boot the economy. The notice to proceed for HS2 has already been widely welcomed by business leaders
* Exploring options to ramp-up re-training to equip people with the skills most in demand by local companies.
Meanwhile the region is continuing to negotiate with Government to ensure the West Midlands manufacturing sector is well-supported, particularly the automotive industry.
The Mayor and the WMCA are pushing ahead with their Gigafactory plans and encouraging Government to make sure it continues to invest in the electric/autonomous vehicle opportunities offered by the region.
Cllr Ian Brookfield, WMCA portfolio holder for economy and innovation and leader of City of Wolverhampton Council, said: “The coronavirus outbreak has made it an extremely challenging economic climate for our region’s businesses.
“Various Government measures have been put in place to support them and their employees during this difficult time to help ease the pressure they are feeling.
“It is critical we now take extra steps as a region to help protect our business community by providing clear guidance and support that will give them the best chance of recovery and delivering a long-term plan that will enable economic growth.”
The latest report by WM REDI says the rapid use of cash reserves by businesses has serious implications for their longer-term survival and that further financial interventions may need to continue if demand doesn’t return.
Businesses are also being forced to wait longer for payments from customers and while the size of workforces has, on the whole remained the same, hours are reducing and the region has seen a drop in contract staff.
The report says areas most affected will be those with high levels of hospitality and tourism which disproportionately effects the rural hinterland. Although the region’s big cities have not seen any mandatory closures in manufacturing, reduced demand is forcing closures.