Cuts will widen divide between successful cities and those with weak economies
Authors: Dr Neil Lee
20 October 2010
The Work Foundation welcomes the Spending Review’s focus on growth.
The cuts in public sector jobs will only be absorbed by growth in the private sector if job creation in the private sector is sufficiently strong.
The problem for the Coalition is that much of this growth is going to be located in London and the South East, while cuts in public spending will have the greatest impact in those cities and regions — like Blackpool, Liverpool, Doncaster and Plymouth — which have the weakest private sectors.
Neil Lee, senior economist at The Work Foundation said, 'The public sector is not just an employer – it provides services and is an important customer for local businesses. Cutting public spending will have knock-on effects on private sector employment, and this will be worse in areas with weaker economies.'
'There are also real concerns that Local Enterprise Partnerships will be weakest in those areas which lack strong private sectors, particularly if they are supposed to be business-led. Strategic leadership is no substitute for cash.'
'The forthcoming Growth Paper will need to say more about how job growth can be encouraged and accelerated across the UK.'
In its submission to the Spending Review, The Work Foundation made the following recommendations:
- Access to capital must be strengthened in public sector dependent regions – and particularly less successful cities;
- Welfare to work programmes need to be locally intelligent;
- Local Enterprise Partnerships should have clarity of purpose, strategies and powers and weak cities must not be left with weak Local Enterprise Partnerships.
- Local innovation panels need to be created and integrated into the LEPs;
- Barriers to movement from less successful cities need to be removed, taking on board the implications for those left behind;
- Connections between successful and less successful cities need to be made, ensuring labour market policies are locally appropriate, and recognising that sustainable growth is about building up and not circulating talent.
Notes to editors
- Ian Brinkley and Neil Lee are available for interviews and briefings.
- The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks.
- The WorkWorld Media Awards 2010 call for submissions is open until 1 November.
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