RTTNews - Thursday, a think tank urged UK cities to re-think their heavy dependence on public sector jobs and start planning for job losses arising from inevitable public spending squeeze in coming years.
The London-based research and policy institute the Centre for Cities warned in a report that between 240,000 to 290,000 public sector jobs across the UK would be axed by 2014, representing a 4% decline in employment in public sector.
Sixty nine percent of the 1.2 million jobs added to city economies between 1998 and 2007 were public sector positions. The report says public sector will not drive jobs growth over the next decade.
Spending cuts look to be inevitable and the public sector will need to shrink, the report said.
The projection is based on the potential job losses in local authorities, public bodies and the civil service. The report predicts no job losses in health and education.
According to the report, Swansea, Hastings, Newcastle, Barnsley and Ipswich are particularly vulnerable to job losses.
Dermot Finch, Director of the Centre for Cities said, UK cities rely heavily on public sector jobs. But the current size of their public sector workforce is untenable, given that we need to cut public spending from 2011 onwards.
The report estimates local authorities and many central departments may face annual spending cuts that exceed 5% during the 2011-14 period. The government deficit is estimated to reach 14% of GDP in 2009-10.
Over the next decade, cities cannot depend on the public sector to provide the bulk of future jobs growth. Instead, private sector jobs will need to be a bigger share of future employment growth, Finch said.
The Centre for Cities urged UK cities to support more low to medium skilled jobs in the private sector, rather than looking to government office relocations to fuel jobs growth in the recovery. The institute also asked the government to phase any public sector job cuts carefully while the economy recovers and to consider alternatives, like pay freezes and flexible working, to reduce the government's wage bill in the short term.
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