Council chiefs say they are expecting delays with major projects but are working hard to make sure they are completed eventually.

And there are fears there could be job cuts in the council's planning department as the real estate and construction industries are hit by the downturn in the economy.

The council's chief executive John Mothersole said: "It is true that big schemes need to expect delay.

"The New Retail Quarter will be delayed by a year but in the current climate I'll settle for a delay because it means the scheme is still live.

"We are very clear what our priority schemes are - the NRQ, working with the Department of Schools to move them out of the Moorfoot building, the Digital Campus and Heart of the City.

"Other schemes will probably sit in a queue for now. We have to decide how may battles we are going to fight and number one is the NRQ."

Mr Mothersole also warned the council was feeling the impact of the credit crunch.

"We are getting less income from services related to the construction sector such as planning fees and the amount of money from the sale of land.

"Planning is already down by half a million pounds. We used to find at auctions that 85 per cent of properties would sell but that has now dropped to 25 per cent.

"We are going to stop selling for the time being as there is no point selling off assets in the current climate.

"The size of some council services is geared to the amount of demand. If the income falls, then it means the service has to be reduced so there could be job losses but I don't know whether that would be through natural vacancies or redundancies."

Business leaders have warned that industries likely to be hit hardest are construction, real estate, retail, leisure, hospitality and financial services.

But general manufacturing and the public sector remained static while environmental industries, creative and digital industries, and advance manufacturing were on the up.



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