North set for grim times as massive cuts begin

But with Britain's new coalition Government now finally up and running, attention is quickly being turned to the mammoth task of reducing the country's crippling budget deficit and the harsh reality is about to bite.

It is regions such as Yorkshire, where reliance on the public sector is far greater than in the South, that are set to bear the brunt of what is almost certain to be the biggest cuts in public spending for at least 30 years.

"You have to look at how the North is more dependant on public sector spending than the south," said John Holmes, chief executive of sub-regional development agency Hull Forward.

"I think the cuts will have a disproportionate effect on us.

We've got to fight very, very hard for Yorkshire and the Humber, and for the North generally.

"The last thing we want is even more of a gap between the north and south of the country."

The figures do not look good. Yorkshire and the Humber has well over half a million people employed directly in the public sector, rising to around 650,000 when so called 'para-state' workers – those people who work for private firms entirely reliant upon state funding and state contracts – are taken into account.

With between seven and 15 per cent of public sector jobs predicted to disappear across the UK over the coming years, regional job losses look set to run into the tens of thousands.

Back-office staff in a range of administrative roles are likely to be hit first, as the Government attempts to protect front-line services.

Quangos and local authorities are also likely to be hit harder than the health and education sectors.

"For many UK cities that have benefited from public sector jobs growth over the last decade, this (round of cuts) will feel like a second-wave recession," according to a report by think-tank Centre for Cities.

"Previous levels of public sector employment growth in cities will certainly not return – and in reality, many public sector jobs will be lost. "

The impact on private business is likely to be heavy, with an estimated 23.7 per cent of Yorkshire's entire economy dependant on the public sector.

Analysts believe that for every 100 public sector jobs created, an additional 30 to 50 private sector jobs can be created through the public sector's spending power. The Centre for Cities believes the reverse will occur when public jobs are lost – potentially increasing total job losses by between one third and one half.

Their report states: "Cities with large, vulnerable public sectors will see a secondary effect in their private sector following public sector job losses. Retail and business services could be affected significantly."

Business leaders in Yorkshire have expressed their concern but appear resigned to the fact large-scale savings have to be made if the UK economy is to make a long-term recovery.

Nick Pontone of the Yorkshire and Humber Chambers of Commerce said: "Obviously public spending is a very large part of Yorkshire's economy... Any attempt to have indiscriminate cuts could hurt Yorkshire quite badly. There is concern about this in the business community but there's a recognition that it has to be done."

Gordon Millward, chairman of the South and East Yorkshire branch of the Federation of Small Businesses, said: "Unfortunately there is medicine to be taken.

"The small businesses have cut down on their expenditure – unfortunately now the Government has to do it. There are some public jobs that have been created which simply are not viable."

But TUC secretary for Yorkshire Bill Adams said: "If you look at how the private sector has weathered the recession, by talking to its workers, being honest about what's needed, you can come to sensible solutions about how to reduce spending.

"Sometimes higher-paid workers have accepted a reduction in hours, for example – there are all sorts of imaginative things you can do instead of just laying off thousands of workers."