13 July 2010

Titles that covered this article include the Daily Telegraph, 12 July 2010.

• Liverpool, Middlesbrough and Newcastle likely to suffer deepest cuts
• The North and Scotland have highest proportion of public sector workers in the UK

Manchester ought to escape the worst impact of public sector cuts that threaten to blight the North of England, according to research conducted by us.

Manchester has a relatively low proportion of public sector workers (just 29%) compared to other northern towns. Middlesbrough, for example, has a public sector workforce of as much as 43% and Liverpool 39%.

However, compared to the South of England, Northern towns and cities generally have a higher concentration of public sector workers, which means they are more likely to suffer from cuts in public spending. 

Our research amongst the Top 50 towns and cities shows that 7 out of the Top 10 places with the highest percentage of public sector workers are in the North or Scotland, whilst 7 out of the 10 places with the lowest proportion of public sector workers are in the South.

The average percentage of workers employed in the public sector is 33%** in the North and 27% in the South. Overall, the national average is 30%.

Clive Gawthorpe, partner in our Manchester office says: “Cities like Manchester must fight to ensure that the 25% spending cuts to government departments announced in the emergency budget do not lead to a sudden spike in unemployment and a further widening of the North South divide.

“Manchester has one of the lowest levels of public sector workers amongst major Northern towns and cities, meaning that the private sector in Manchester may be better positioned than other northern cities to pick up some of the slack. This may help Manchester’s workforce get through what could be a tough period.”

The Top 10 cities at risk include Liverpool, with 39% of the workforce employed in the public sector and Newcastle upon Tyne, Dundee and Blackpool with 37%. At the bottom of the table, most of the towns and cities are in Southern regions including Milton Keynes and Swindon with 19% and Slough with just 16%.

Comments Clive: “Cuts of up to 25% are likely to be disproportionately spread across the UK with the possibility that more than 600,000 public sector jobs will be lost in the next six years. It is crucial that both central government and local governments work hard to soften the impact on hard hit areas by implementing policies that encourage private sector development and help fill the possible employment vacuum.

“Many parts of the North have traditionally depended on jobs from the public sector as previous governments attempted to regenerate the local economy in areas that were suffering from high levels of unemployment. The last thing the North needs is to see the North/South gap grow even wider.” 

Our research shows that, surprisingly, Oxford actually has the greatest number of public sector workers in the UK, with 46% of the total workforce in public sector employment. However, this figure is mostly due to the vast numbers employed within academia and education (1 in 5 Oxford workers) and also in large hospitals and defence establishments. In contrast, Cambridge has 43.5% of workers employed within the public sector, highlighting the relative success of the town’s hi-tech sector.”

Swansea (4th) and Plymouth (8th) are two of the only three towns in the Top 10 not in the North of the country. Swansea, home to the DVLA, a major employer in the area and Plymouth, a former port with a large naval defence sector, may both experience cuts of the same level as their northern counterparts.

Top 50 UK towns and cities with greatest % of workforce employed by public sector

* National Average of Top 50 Towns and Cities = 30%

Clive Gawthorpe