Exclusive: Region leading the way with jobs creation in private sector

Business Secretary Vince Cable
Business Secretary Vince Cable
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An internal Government report reveals Yorkshire has posted the biggest increase in the proportion of people working in private sector jobs since before the economic crash, outpacing even the South East.

Three years of Coalition efforts to re-balance the region’s economy away from the diminishing public sector appear finally to be bearing fruit, with new figures showing the proportion of people employed by private firms rose by 2.5 per cent in Yorkshire last year.

A report by statisticians at the Department for Business, Innovation and Skills (BIS) shows Yorkshire’s economy is tilting towards the private sector at a faster pace than the North East, North West, South East, South West or East Midlands, representing the biggest surge since the department began making the quarterly assessments back in 2008.

The figures have been hailed by Ministers and business leaders in the region as a signal that a drive to wean Yorkshire’s economy off dependence on the public sector is finally starting to succeed.

Business Secretary Vince Cable said: “One of the things that is clearly happening is that, even in parts of the country where the private sector was weak, you are beginning to get genuine job growth.

“There is now quantitative evidence to back that up.”

The Government made clear when it came to power in 2010 that the scale of the public sector cuts needed to begin re-balancing the budget would require extra private sector jobs.

And despite the economy having broadly flatlined since 2010 and the repeated and savage cuts to council and Whitehall budgets, employment figures have remained largely positive. David Cameron has made great play of the fact that a million-and-a-quarter extra private sector jobs have been created since the Coalition came to power.

However, the figures released by BIS this week show the proportion of people working in the private sector, which dropped alarmingly following the 2008 crash, had not recovered to their previous levels by the end of 2011.

But the new data for the end of 2012 shows the figure has now surged past its 2008 level in almost every part of the country.

In Yorkshire, the proportion of private sector workers now stands at 55.7 per cent, a leap from 53.1 per cent the year before which BIS describes as “statistically significant”. It still remains markedly behind the England-wide average of 59 per cent, however.

“The North has done particularly well in terms of private sector job creation,” Mr Cable said. “If you ‘net’ out public sector job [losses] it’s a bit more predictable that the biggest net improvements are in London and the South East But there’s quite a positive outcome in Yorkshire, and the North East and North West were roughly neutral.”

The figures will add to a growing sense that the UK economy may finally have turned a corner following better-than-expected GDP figures last month, which showed Britain had avoided an unprecedented triple-dip recession.

They offer a welcome boost following separate figures released by the Office for National Statistics in April which suggested private sector job growth had been concentrated in specific towns and cities rather than evenly spread across Yorkshire.

Data today also showed business activity reached its strongest level for eight months in April, with the best showing in Yorkshire. The figure of 52.2, up from 51.6 in March, means overall business output was above 50 for the sixth month in a row in the Lloyds TSB Regional Purchasing Managers Index. A rating of 50 indicates no change. The improvement reflected growth in seven out of the nine English regions, led by Yorkshire and Humber (at 55.7).

James Newman, chairman of the Sheffield City Region local enterprise partnership, said: “I am pleased to see that the Government’s latest private sector employment statistics show Yorkshire leading the change in the North.

“The city region continues to build strength as an international trading base and is very attractive to global investors.”

Mark Goldstone, head of policy at the Leeds, York and North Yorkshire Chamber of Commerce, said: “These results are encouraging and in line with our own research, which points to steady growth in private sector employment over the last two years.

“Our latest survey results in particular show improvements in the number of manufacturers looking to increase employment activity in our region. What these figures mask however is the rise in youth unemployment, something which should concern all of us which is why we are actively supporting the creation of more apprenticeship opportunities.”