Derby leaders are seeking Government funding for a scheme to help businesses in the region create new jobs to aid the economic recovery from COVID-19.
They want an initial £10m to rapidly launch the initiative, offering loans or grants to small and medium-sized companies who can expand and take on more employees.
Their request comes after newly-released data revealed the scale of the challenge facing Derby as it battles back from the coronavirus crisis.
Figures from the Department for Work and Pensions show that claims for Universal Credit in the city were 142 per cent higher in May than in the same month last year.
Initial findings from a survey of Derby’s small and medium-sized businesses also indicate that 40 per cent of companies fear they will have to make redundancies among their furloughed staff.
The city’s Economic Recovery Task Force is now calling on the Government to make millions of pounds of funding available for projects to help reboot the city’s economy.
It has already submitted a bid for £23.7 million to kick-start major improvement schemes in the city centre.
It is now asking for support for the SME loans and grants initiative that would help businesses across the D2N2 Local Enterprise Partnership area create new jobs. The initial ask for this is £10m, with the intention to try to source more funding if enough credible job-creation proposals are identified.
Derby City Council’s Chief Executive, Paul Simpson, said Derby’s strength in high-value manufacturing and sectors like aerospace left it particularly exposed to the economic crisis caused by COVID-19.
“We are determined to build back and build back better. We are bringing forward our own initiatives and working with the private sector to deliver investment into the city but the scale of the challenge means that we will need support of central Government to ensure Derby continues to play a key role in driving the UK economy.”
Mr Simpson pointed to research by think tank Centre for Cities which suggests Derby could be the third-worst affected city in the UK, with more than 40 per cent of jobs considered vulnerable because of the impact of COVID.
DWP’s figures show that the number of people claiming Universal Credit in Derby rose to 12,595 last month, compared to 5,200 in May last year. The number is up 99.6 per cent on the count in March, when the UK entered lockdown.
And the tally looks set to worsen, with Rolls-Royce in the process of making 1,300 redundancies in the city, aerospace logistics company Incora announcing a restructuring that could lead to major job losses and many other businesses saying that they may have to let go some of their currently furloughed staff.
The task force has been in dialogue with local businesses to understand how the crisis is impacting upon them and how they see the future.
Nearly 70 per cent of companies responding to a Council survey said they had seen decreased sales as a result of the COVID crisis, 50 per cent said they were suffering cashflow issues and 44 per cent thought it would take between one and three years for their businesses to return to pre-crisis levels.
Fifty-six per cent had furloughed staff. Forty per cent of those expected to make some furloughed staff redundant and six per cent had already made redundancies.
The Council has already issued more than £40m in grants to help support businesses in the short-term.
Task force leaders have also been supporting private sector investors to continue with new developments in the city. Companies behind schemes worth more than £450m have reiterated their confidence in the city and pledged to deliver their projects.
There was also positive news last week when planning permission was given for the new Landmark residential development – which will bring 200 new apartments to the city centre and inject up to £68m into the local economy.
“Our recovery strategy aims to maintain confidence, while diversifying and decarbonising our economy. We are confident in our plans and hope that the Government will now work with us to make them a reality,”
said Mr Simpson.
“There won’t be a single silver bullet that can solve all the economic challenges caused by COVID-19. However, lots of individual successes could add up to make a big difference. That’s why we have identified this scheme to support SMEs who can demonstrate strong growth potential.”
Derby businesses can still participate in the Council’s COVID-19 impact survey.