Up to 290,000 public sector jobs could disappear by 2014 to pay for the bailout of the banks, according to an authoritative analysis of planned cutbacks by an independent think-tank.
The findings – ignored by the national media earlier this year – come from the Centre for Cities, a think-tank funded by the Gatsby Foundation, and suggest that cuts planned by both the Tories and Labour will have a devastating impact on a number of major British towns and cities.
The findings come from a background paper prepared last year to a report that was widely covered which showed a north-south divide growing between cities as the recession bites.
The paper by researcher by Kieran Larkin draws on planned spending cuts by all major parties and looks at the pattern of Conservative spending cuts imposed by John Major’s “cull of the quangos” – a policy which David Cameron promises to repeat.
Mr Larkin himself admits that the figure could be “a conservative estimate” – especially as Tony Travers of the LSE’s local government unit is now predicting 190,000 local government jobs could go. That is some 70,000 above the 120,000 estimated in this report.
It singles out five cities and towns where the impact will be devastating – Newcastle, Swansea, Ipswich, Hastings and Barnsley. The report says Newcastle will be vulnerable because the Liberal Democrat-controlled city council employs a large number of people and the city hosts two major quangos. One North East, the regional development agency, and HM Revenue and Customs’ National Insurance Contributions agency are based there.
The report estimates that 6,600 public sector jobs will go by 2014 – and before then if the Tories win the general election, because they want to abolish regional development agencies. Another 2,000 jobs will go in the private sector because of a big cut in spending power among local people.
Swansea, which has the headquarters of the Driver Vehicle Licence Agency, could lose 2,300 public sector jobs and another 700 in the private sector.
Ipswich (a Labour marginal) and Barnsley (a Labour heartlands seat) could lose 1,200 public sector jobs each. The seaside town of Hastings (another Labour marginal) could lose 600 public sector jobs if work in the Child Support Agency is cut back.
Other major cities facing severe problems are Belfast, Blackpool (two Labour marginals), Newport, Liverpool and Dundee.
Some cities with large public sector employment – particularly the university towns of Oxford and Cambridge – will not be so badly hit as the universities are expected to raise student tuition fees to keep academics in jobs. Cambridge, a hi-tech city, has been scarcely touched by the recession because of a vibrant private sector. But university support staff could be squeezed.
