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Job shift to private sector as squeeze continues

By Western Morning News  |  Posted: July 02, 2013

Prime  Minister David Cameron (left) and his deputy Nick Clegg believe dependence on one sector makes a region vulnerable to shifts in the economy

Prime Minister David Cameron (left) and his deputy Nick Clegg believe dependence on one sector makes a region vulnerable to shifts in the economy

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The public sector is shrinking, and the Government likes it. In fact, it is encouraging the squeeze, arguing the reduction in the reliance on state employment in the regions – with the private sector filling the void – will boost the economy.

Not everyone agrees, of course, notably trade unions and many in the Labour Party. But the Government line is clear. Dependence on one sector makes a region vulnerable to shifts in the economy, while wealth creators are the country's lifeblood. Where do taxes come from to under-write the state if not the private sector, free marketeers argue?

Critics say this thinking lends greater worth to a millionaire entrepreneur than a low-paid nurse, a misplaced value judgement if the rich man pitches up to A&E in the back of an ambulance. You will quickly discover what is more important, they say.

Ideology aside, the point is the public sector is getting smaller. Official figures show there are 7,400 fewer people employed by the state in the Westcountry than five years ago. What is more – and this is the bit that delights ministers – there are 11,500 more jobs in the private sector over the period. A net gain of 4,100.

So where have the state-funded jobs gone? Well, there is barely a corner of the public sector that has not been touched. The glaring example is councils, buffeted by deep cuts to central government grants. Local authorities are reporting that their workforce has shrunk since the coalition Government came to power. Library opening hours have been cut, bus services scaled back and leisure services funding reduced. More is to come.

The controversial reform of the NHS will also have played its part, coming at the same time as demands for billions of pounds worth of efficiency savings. Local healthcare trusts across the region were axed in April, replaced by GP-led consortia. While many workers will have taken up posts in the new-look NHS, scores of positions are likely to have been shed.

Many parts of the region have a disproportionate reliance on the military and defence firms that, in turn, depend on Ministry of Defence contracts. Hotspots are around RNAS Yeovilton in Somerset, Devonport in Plymouth, and RNAS Culdrose, near Helston, as well as a series of Royal Marine bases scattered across the South West. The deep cuts in defence spending will also have affected the public sector headcount.

Police forces – Devon & Cornwall, Avon & Somerset and Dorset – have tightened their budgets as well. Ministers want more bobbies on the beat and fewer pen-pushers in back offices. But newly-elected police commissioners – who are charged with making the sums add up – are warning the front-line cannot take much more.

Schools? Education Secretary Michael Gove's plan to strip local authorities of control – handing them to academies and "free" schools – is in full swing, but with education budgets ring-fenced and schools still remaining in the state sector, there will have been little impact on overall numbers. However, the end of Regional Development Agencies, including the six-county wide South West quango, has cost hundreds of positions in the region.

The result is high concentrations of public sector employment in the Westcountry – often well above the national average of 20% – are coming down. In Cornwall, the figure stands at 23.8%, down a modest 0.2% points over five years. Other falls are more dramatic. Plymouth has 25.8% of its workforce employed by the state, but that is down by 5.1% points. Torridge has dropped to 11.4%, a fall of 7.9% points.

Minister for employment Mark Hoban said: "Private sector employment is up 1.3 million since the election – more than offsetting any fall in public sector employment.

"It's a credit to British businesses that they're proving wrong those cynics who claimed the private sector wouldn't be able to step up.

"But we're not complacent and know there are still lots of challenges ahead, which is why the Government will continue working hard to help those people who want to get on in life and allow the UK to compete in the global race."

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