Sheffield expert warns 14,000 businesses could go under and £4bn wiped from economy

Felix Kumi-Ampofo, assistant director for policy and assurance at Sheffield City Region, said the ‘worst possible scenario’ could result in 31 per cent of small and medium-sized enterprises in South Yorkshire going under due to the pandemic.

One councillor sitting on the Sheffield City Region scrutiny board said it was ‘one of the grimmest reports’ he had ever seen.

Using experience of the 2008-09 recession and analysis of the impact of Brexit, the new report shows South Yorkshire’s economy ‘lacks resilience’ and is ‘vulnerable to economic shocks’.

Mr Kumi-Ampofo said the crisis has the potential to lead to a massive 33 per cent reduction in national GDP.

About 5.8 per cent of GDP fell in the months of March alone, the largest since records began in 1997.

The report warns that if the likely recession matches that of the 2008 financial crash, 40,000 jobs could be lost in South Yorkshire alone, but the furlough scheme was a ‘big mitigating factor’.

Doncaster and Barnsley could be hit harder than Sheffield and Rotherham, as they have some of the lowest rates of home working in the country.

This is mirrored in the fact both Doncaster and Barnsley have seen some of the highest increases in benefit claims in the country.

Concerns were also raised that companies in countries who get back to normality quicker than the UK could take up links in the business supply chain once held by South Yorkshire firms

Mr Kumi-Ampofo said he also worked on a scenario based on data from the Office for Budget Responsibility, which was ‘more optimistic’.

It suggests the decline and recovery could happen in a ‘V shape’ showing a sharper recovery which could take ‘about a year’.

A much more delayed recovery was also looked at, which will require further interventions in order to speed up recovery.

Mr Kumi-Ampofo did say South Yorkshire’s health care sector was strong and that this was an area which would likely grow further.

He said: “This recession is really having a huge impact on not just how the businesses operate, but with the final analysis, we are looking at significant insolvencies.

“There are some figures which tell us that probably 30 per cent of small and medium-sized enterprises could close in the worst case scenario which as you can imagine is a huge risk to our economy, as 98 per cent of our business base is in that bracket.

“Businesses have come back to us in really clear terms regarding the risks that they face.

“We don’t know for certain which path this recovery will take, but the whole idea of what we’re planning is to make sure that we’re prepared.”

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