Hammersmith and Fulham council report lays bare economic ‘risks’ of a no-deal Brexit

Local Democracy Reporter

The local economic “risks” that a no-deal Brexit could pose to Hammersmith and Fulham council have been laid bare in a new report.

Shortages of builders and nurses, as well as inflation increases, are among the borough’s top concerns.

One of main issues highlighted in the report, and discussed by councillors and heads of departments, were that thousands of EU citizens will be left uncertain about their status.

An estimated 30,000 EU citizens live in Hammersmith and Fulham, out of a population of about 185,000 people.

Some 8,300 EU citizens had applied to the Home Office for settled status, according to the latest figures available to the council, which were provided in June.

Peter Smith, the council’s head of policy and strategy, said the authority did not know how many applications had been approved, but that the next set of figures will be available in November.

Across Britain, 1.5 million people had applied for settled status by the end of June.

Labour councillor Patricia Quigley said: It was “very concerning that 22,000 people haven’t applied,” considering Brexit is supposed to be finalised at the end of this month.

But health chiefs’ biggest concern was they would continue to find staff and nurses for care homes and hospitals, according to the report.

Official figures showed the number of nurses from the EU registering to work in the UK dropped by 96 per cent to January 2017, and the rate has continued to fall.

“This will compound the existing challenges around recruiting nurses to work in care homes and finding suitably skilled and qualified nursing home managers,” the report said.

A shortage of care workers and nurses could cause an increase in wages, meaning the council’s spend on services would rise by nearly £1million per year if wages increased two per cent.

The council’s Brexit lead, Hitesh Jolapara, said the “worst case scenario” would be if inflation rose by more than three per cent, which would increase the council’s spending by £1.4million.

On housing and regeneration, the report said the “viability” of regeneration initiatives, such as the transformation of White City, might be affected by no-deal.

“Economic uncertainty, such as around housing values, may hamper regeneration initiatives,” it said. And it adds that “adverse” changes to interest rates would harm prospects of property sales, making it difficult for house builders to borrow against predicted profit margins.

To combat the housing crisis, the council says its ambition was to build “at least 22,000 new homes in the borough by 2038”.

It said the housing shortage was particularly severe because 1,300 households are in temporary accommodation at any given time.

It also had concerns over a shortage of builders, as 28 per cent of the capital’s construction workers are EU citizens.

A no-deal Brexit “could severely reduce house building in the UK, potentially deepening the housing crisis, especially in London,” the report said.

The council’s report said it was prepared to spend up to £2.5million of rainy day money to cope with the potential “negative impacts” of no-deal.

The risks included inflation, which is “likely to increase” due to a potential fall in the value of the pound, and the requirement to pay added tariffs on goods imported from countries in the EU

It said “some businesses may decide to relocate to the EU”, or “reduce” plans for UK investment. This could mean “fewer jobs” in the area, and cause a knock-on effect to other businesses.

The council also feared further austerity through funding cuts from central government, as “lower growth will mean less funding for public services”.

The council has calculated that every one per cent of extra inflation means it will be under pressure to spend nearly £1million more on staff wages.

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