A SHOCK report says steel communities in Ebbw Vale could be shattered in the wake of huge job losses because agencies are letting them down.

It paints a bleak picture of the post-steel economy in Gwent and South Wales. And areas like Ebbw Vale, already suffering deprivation and the highest incidence of unemployment, could be plunged further into the economic "abyss".

It is predicted that £40 million could be lost to the local economy and homebuyers plunged into negative equity.

The report by academics at Cardiff University says crime and disorder could reign in some areas unless a unified action because bodies such as the National Assembly and the Welsh Development Agency are not working together.

Professor Kevin Morgan, co-author of the report, said this morning that Ebbw vale and Blaenau Gwent were almost "in a league of their own". Blaenau Gwent is identified in the report as a "massively de-prived area" where all parts are ranked in the forty per cent most deprived parts of Wales.

In a bid to tackle the problem, Blaenau Gwent council have made a series of bids for a share for the £1.2 billion Objective One funding available for the 14 Welsh local authorities.

The council hopes the cash will help pay for schemes such as the refurbishment of industrial estates.

But the impact of Corus redundancies in Gwent will go beyond the direct job losses from plants such as Llanwern and filter into the wider community, the report predicts.

The report by the influential Regeneration Institute at the university, which considers the implications of the Corus job losses and plant closures, has been presented to the National Assembly and the All Wales taskforce.

Corus axed 1,300 jobs in July 2000 at its Llanwern, Port Talbot and Ebbw Vale plants in July 200 and followed through with a further 3,000 redundancies in February 2001. Included in the axings this year were 1,340 from Llanwern with the closure of steel-making and 780 with the shut down of the tinplate works at Ebbw Vale.

The report highlights the impact of the steel closure on health and welfare in valleys communities and the impact of redundancy.

The report says: "Not only have the 2001 announcements evoked a sense of shock and trauma but they also threaten to further fracture the social networks that define the community at individual, family and neighbourhood levels."

Blaenau Gwent council regeneration and policy head Richard Crook said: "Essentially it is an audit report which in assesses the impact of the steel job losses but does not look into the future - it is quite a strange report in many ways as it tells us most of what we already know."

A National Assembly spokeswoman said: "This research was commissioned as a foundation exercise to inform the steel task force, and it's far-reaching recommendations are currently being considered."

*PICTURED: The outlook is bleak for Ebbw Vale, already suffering deprivation.