Steel job losses spark crisis for Sheffield plan

The threatened closure of the Corus steelworks in north Sheffield will have a "devastating impact" on the plans being drawn up by the South Yorkshire market renewal pathfinder.

The Anglo-Dutch steelmaking giant revealed last week that it was to downsize its operations in the UK, with some reports placing the number of jobs likely to be lost as high as 4000.

Corus has 15 factories in the UK, three of which are located in areas of low housing demand. The Sheffield plant employs 3100 staff, most of whom live in housing estates near the factory in the north of the city.

Presently this area has had high housing demand, but if the plant is closed then up to 7000 homes there could be added to the 140,000 homes the South Yorkshire pathfinder is already dealing with.

Joanne Roney, executive director of Sheffield council, said: "33% of South Yorkshire's housing market at risk of low demand before a major employer pulls out – what is it going to be like now?"

"It is scary that our 15-year plan is so closely tied to the local economy. Any job losses will have a devastating impact on the housing market in north Sheffield," she added.

Here we are planning our strategy and yet an area of high housing demand looks like it could be added to it

Joanne Roney, Sheffield council

Roney said the span of abandonment was likely to become much bigger. "Here we are planning our strategy and yet an area of previously high housing demand looks like it could be added to the problem."

Roney added that as a result what the pathfinders were considering had to be broader so as to encompass the full impact on local and regional housing markets of sudden and unforeseen changes in the economy.

South Yorkshire is one of nine pathfinders that recently received a £500m pot of money from the Communities Plan. It has 140,000 homes – or 33% of the total housing supply – at risk of low demand.

It is one of a number of areas suffering from low demand that has been largely caused by the long-term economic decline in once thriving manufacturing areas in the north and Midlands of England.

Another area that suffers from low demand, but is not presently a pathfinder is Tees Valley in the North-east. The Corus plant on Teesside employs 3200 people.