150,000 Yorkshire jobs in danger as public spending cut

High levels of dependence on the public sector in Yorkshire and the Humber has made the region particularly vulnerable as Government departments prepare to slash their budgets by up to a third.

But while 65,000 public sector posts will go, the majority of the job losses – 81,000 – will come in the private sector, according to work commissioned by councils in the region.

Council leaders have also warned Ministers the 6.2bn of cuts being found in government spending – including 1.16bn from local government budgets – is hitting deprived areas the hardest.

Debate continues to rage over Chancellor George Osborne's aggressive Budget, which will see public spending cut by 61bn by 2015, with Deputy Prime Minister Nick Clegg insisting it would have been "morally wrong" not to have slashed spending as he invited public sector workers to suggest where the axe should fall.

Ministers say their measures – which also include a VAT increase and a two-year public sector pay freeze – are fair, even though the Institute for Fiscal Studies says many will hit the poor hardest.

The Government has also promised help for northern regions, with tax breaks for new firms taking on workers and a 1bn regional growth fund to help boost economies outside London, the South-East and East of England.

But the projection of job losses is a stark warning of the bumpy road ahead. Councils said it shows the case for more powers to be wielded at a local level to respond to the needs of their areas and mitigate the impact.

The figures were produced by the Work Foundation and respected forecasters Oxford Economics before the Budget.

The projection of 146,000 job losses was based on Mr Osborne imposing an extra 22bn of cuts on top of Labour's plans by 2017 – about in line with the extra 17bn of cuts by 2015 he announced.

The region is particularly vulnerable to spending cuts because more than three quarters of jobs created in the decade to 2008 were in taxpayer-funded sectors and many of the private sector jobs are reliant on public money.

Leader of Rotherham Council and chairman of Local Government Yorkshire and Humber Coun Roger Stone said: "The impact will be felt across the entire economy, not just in areas funded by the public purse."