London sees smaller reduction in cuts to jobs in public sector

London’s public sector workforce has seen smaller a reduction than other regions, despite the South East experiencing faster private sector job growth than anywhere else in the country, according to a new study.

George Osborne

Research by the Sheffield Political Economy Research Institute (SPERI) found public sector job cuts have been spread ‘very unevenly’ across the regions since 2008, with the capital least affected.

The North East of England lost 19 per cent and Yorkshire 12.6 per cent of its public sector jobs, London saw a cut of just 3.1 per cent.

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One of the Government’s justifications for austerity has been that public sector jobs tend to crowd out jobs in the private sector and it has been claimed that cuts to public sector employment will lead to private sector job creation and help, as George Osborne claims, rebalance the UK’s economy.

However, researcher Scott Lavery, author of the report, said this view should be questioned in light of the findings.

He said: “Since 2008 job cuts in the public sector have fallen disproportionately on the regions and devolved nations outside of London. As a result of this, London and the South East have increased their share of public sector jobs as a proportion of the national total.

“Interestingly, however, London has also been the region with the fastest rate of private sector job growth in this period.”

He added: “This suggests that simplistic assertions about the public sector ‘crowding out’ private sector job creation need to be challenged if we are to build a more sustainable and equitable economic settlement for the UK.”

Examining employment figures between the first quarter of 2008 and the third quarter of 2014, he found 10.7 per cent of public sector jobs were lost in the UK.

In contrast, all regions saw an increase in the number of private sector jobs – but the impact of this varied across the country. For example, the size of the private sector in London increased by 15.7 per cent, but in Wales only rose by 1.1 per cent.

Comment: Page 14.