Double dip recession fear over jobs

The losses – occurring in the 12 months leading to June this year – mean almost 300,000 public sector jobs have been lost across the UK since December 2009, a report from PricewaterhouseCoopers reveals.

It warns there is now a significant chance of a double dip recession. And PwC warned that, while the losses were offset by about 600,000 new private sector jobs, the English regions have suffered most, with the North East and West Midlands hardest hit.

The news comes as further research, from the TUC, revealed Yorkshire has suffered the sharpest public expenditure cut of any English region during the first year of the coalition government, with an average loss of £390 per person.

The figures show that spending across the region fell by 4.4 per cent, compared with a national average fall of 3.8 per cent. Londoners took the biggest financial hit of £399 but also received the highest level of spending per head at £10,256 – and therefore took a smaller percentage cut than other parts of the country.

The findings add further momentum to the Yorkshire Post’s heavily backed Fair Deal campaign, which is calling on the Government to end years of chronic underinvestment in the region.

Already supported by business leaders and politicians across the region, last night a motion was proposed at Doncaster Council for the authority to also pledge its backing.

The PwC report – published today on the anniversary of the 2010 Spending Review – concludes the scale of public sector job cuts are much deeper and have occurred much faster than projected by the Office of Budget Responsibility. It warns the full impact has yet to hit the devolved regions of Northern Ireland, Scotland and Wales, therefore the pace of public sector job losses will accelerate.

Roger Marsh, PwC partner, said: “The public sector job losses have come much faster than anticipated. After only one quarter of data for this financial year, the job losses in the public sector have already exceeded the OBR forecast for the whole of the 2011-12 financial year.

“The total number of job cuts over the Spending Review period to 2015 will not necessarily be that much greater than forecast, as job losses may be lower in later years, but earlier than expected job cuts have sapped demand at a time when the economy is already relatively weak due to a series of global economic shocks this year.

“The challenge now for government is not only how to do things differently, but how to do different things and mitigate the impact of further cuts in spending on services.”

The TUC figures include the impact of some of the Government’s initial austerity measures announced in May 2010 – such as reducing regional development agency spending, scrapping the future jobs fund and the building schools for the future programme – but pre-date the £81bn of cuts announced in the emergency budget the following month.

The TUC is calling for a change to the Government’s economic plan, fearing present policy will widen the North-South divide.

TUC General Secretary Brendan Barber said: “Not only are the poorest families being hit hardest by the Government’s faltering austerity plan, the cuts are not being spread evenly across the country.

“Areas of high public sector employment are particularly vulnerable to higher joblessness and reduced consumer demand, which in turn is stifling the private sector.

“For all the talk of economic rebalancing, all we are seeing is a growing North-South divide, with City-led growth down South while other regions are struggling.”

No one from the Government was available for comment.