Local Authority job loses will increase personal debt in Shropshire says Financial Advisors
Advisors at Integrity Financial Services Limited have warned that the threat of job loses sent out to approximately 6,500 council staff at Shropshire Council, may have an adverse effect and increase personal debt levels in the area.
The council has proposed a pay cut to save money and employees received a letter stating all council staff would be dismissed on 30 September and immediately rehired, but only if they agreed to a 5.4% pay cut.
The authority said it had to save £76m due to reduced government funding and pay cuts would avoid it having to make 400 permanent redundancies.
Unison said it had started the process over balloting members for industrial action and about 40% of Shropshire Council staff are Unison members.
The worry from debt advisors is that if employment is lost many people will have either no income or a great reduction and will ultimately start to struggle with maintaining repayments on secured and unsecured debts, such as credit cards, loans and mortgages.
Darren Perks an advisor at Integrity commented:
"The possible loss of so many jobs in a single area will mean financial hardship for many people because of the difficulty in securing alternative employment.
"Where such a high volume of jobs is lost by a single employer the surrounding economy is unlikely to be able to provide alternative employment for everyone in the short term. This is therefore bound to mean that many people face financial difficulties expecially at a time when family finances are already at full stretch" he said.
Perks also suggested that if people are struggling to maintain large personal debt payments this could also hamper their efforts to get back to work.
"All to often, people feel that they can not take lower paid work because the salary simply will not cover all of thier debt repayments. Where this is the case, a professional debt solution can reduce monthly payments meaning that lower paid jobs become an option" he said.
On a daily basis people are contacting Integrity because they are struggling with the rise in living costs, household bills and a drop in income which effects their ability to repay existing credit or loan debts.
Integrity have urged anyone in this situation or who has concerns about it, to contact them for free impartial professional advice on 01743 272900.
