Mayor Joe Anderson has warned that hundreds in the city are on the verge of losing their jobs as Liverpool's economy is set to take a big hit from the collapse of department store giant Debenhams.
Mayor Anderson criticised the government's policies aimed at tackling the economic damage caused by the pandemic in the wake of turmoil on the high street.
News broke this morning that Debenhams, which has been in administration since April, was set to shut all 124 of its stores and likely make all of its 12,000 employees redundant.
JD Sports was tipped to take the 242-year-old department store chain over after it crashed into administration for the third time in April, amid ongoing cash flow problems.
However, the sportswear chain withdrew its offer just a day after news of shopping giant Arcadia's collapse emerged. That collapse puts 13,000 jobs in a range of stores such as Topshop and Burton at risk.
For Liverpool, the Debenhams collapse means the huge Liverpool One store faces closure.
The exact number of jobs at risk is not known but Mayor Anderson said between 400 and 500 people across the city could be affected across both companies.
He said the closures would be "a devastating blow for the workforce and their families".
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Mayor Anderson said: "What it highlights is that, when we talk about consequences of Covid, we do not yet know what they are going to be in full.
"I have tried to remain upbeat about the economic performance of our city but the reality is that it is an extremely serious situation we face.
"I am concerned about a lot of employers in our region. I am concerned about those in the hospitality and retail industries in the city centre obviously but it is not only those sectors."
The council was one of the first in England to submit its economic recovery plans to government but Mayor Anderson repeated his view that Chancellor Rishi Sunak's spending review was inadequate for tackling the economic challenge faced by many areas of the country.
Mayor Anderson said: "They're talking about levelling up, they're talking about providing what's needed to councils. The reality is they're like a rabbit in headlights. They have no plan."
The government has maintained throughout the crisis that it is providing councils with the support they need to survive the crisis through policies such as the furlough scheme and Eat Out To Help Out.
Speaking to the BBC earlier today about Debenhams, Retail Economics executive Richard Lim said he could "not overstate the significance of this collapse, given the vast property portfolio, number of jobs impacted and the reverberations felt across the industry".
Bosses at Liverpool One now face the prospect of trying to find a new retail tenant for a huge store during a period of intense economic turmoil.
Debenhams was one of the original "anchor tenants" of Liverpool One when it was built, along with fellow department store John Lewis. It has been open since the £1billion redevelopment of a large chunk of Liverpool city centre opened in 2008.