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Public Sector job losses hit North East

16,000 public sector jobs were lost in the North East in the 12 months to June 2011, making the region one of the hardest hit by the cuts.

This number brings the total number of UK public sector jobs lost since 2009 to 300,000, a figure which continues to accelerate.

PwC believe we are still yet to see the full impact of the cuts, which have already been found to be much deeper, and occurring more frequently than projected by the Office of Budget Responsibility (OBR).

Public sector job losses in the North East have also occurred much faster than anticipated, which presents a worrying outlook for Neil Austen, director at PwC North East.

He commented: “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. “

Commenting on the report, John Hawksworth, chief economist at PwC said: “ This year has seen considerable turmoil in the world economy and in financial markets leading to significantly slower UK growth thn had been expected a year ago.

“This may have been amplified by public sector job cuts coming through much more quickly than projected in some regions and particularly in the English local authorities.

“On the other hand, the government’s tough fiscal stance has helped to keep the UK cost of borrowing very low and has left room for the Bank of England to announce another £75 billion of additional quantitative easing to help support the economy.”

The PwC report, “Spending Review: One year on,” looked back at the first year of the governments spending review and concluded that most people felt worried and uncertain of the economic future.

It is not all bad news however, as the report also forecast that private sector job gains would offset losses in the public sector. Nonetheless, this prediction still remains to be seen, as in Q2 of 2011 public sector job losses outweighed private sector gains – a potentially worrying trend.

Mr Hawksworth continued: “Private sector employment, until March 2011, had more than offset public sector job losses.

“However, the Labour Force Survey data on private sector job gains shows these to have been disproportionately in part-time employment since 2009.

“Trends in full-time equivalent employment have therefore been less favourable during the last couple of years than suggested by the total employment numbers “

This was posted in Bdaily's Members' News section by Ruth Mitchell .