LONDON is set to lose 370,000 jobs as a result of the recession, council leaders have warned.

The capital will be worst hit by the economic downturn, according to the Local Government Association.

It is expected to see more jobs axed than any other part of the country.

Earlier this month it emerged that unemployment in London has shot up by 60,000 over the past year, to reach 298,000.

But this could be only the tip of the iceberg, according to a study produced by consultants Public and Corporate Economic Consultants on behalf of the Local Government Association, which represents councils across the country.

Local authority representatives are to gather for a summit in London to discuss ways of helping businesses survive the recession.

The study concludes that the recent growth of big northern cities has left them well placed to cope with the economic difficulties affecting Britain.

It calls on the Government to give more autonomy to local councils, so that they can develop economic strategies suitable for their areas.

The figure of 370,000 is the estimated net loss in jobs in London, taking into account both new jobs created and existing positions axed.

Councillor Margaret Eaton, chair of the Local Government Association, said: "Global problems have tipped the British economy into a recession that is affecting countries around the world.

"The Government has acted at international and national levels, councils are now taking a lead in the effort to find local solutions to local problems.

"From keeping people in their own homes and offering support to the unemployed, to helping small businesses stay afloat, councils are already acting.

"Councils will be pulling out all the stops over the coming months and years to protect local people and businesses from the worst effects of the slump.

"The recession is going to hit different parts of the country in very different ways and even within individual regions there are marked differences as to how local areas could fare.

"It is clear that a national, one size fits all approach to dealing with the recession simply isn't going to work.

"The research shows that the fastest way to get out of recession is for more decisions about the economy to be taken at the local level, which means councils continuing to work with local people and businesses."

Related links: Local Government Association.

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