Belfast Telegraph

Saturday 26 July 2014

36,000 could lose jobs in public sector cuts

Nearly 40,000 jobs could be lost in Northern Ireland over the next few years as a result of public sector cuts in the comprehensive spending review, a firm of business advisers have warned.

PricewaterhouseCoopers (PwC) said 20,000 public sector jobs could go — and that a further 16,000 private sector posts were also in jeopardy from the knock-on effect of cutbacks if there was no new thinking on economic reform in the province.

With around 30% of the workforce employed in the public sector, the projected losses would amount to 5.2% of total jobs in the province — the highest percentage toll of all UK regions.

In total, PwC said the spending cuts could result in the loss of 500,000 public sector jobs across the UK by 2014/2015, based on estimates from the Office of Budget Responsibility.

But Hugh Crossey, the firm’s managing partner in Northern Ireland, said the Coalition Government’s plans for Northern Ireland, including enterprise zone status and corporation tax changes, could bring opportunities if the Executive and private sector grasped them.

“This should not be interpreted solely as a crisis for the Executive — it’s also an opportunity for the private sector to challenge and modernise its own approach to innovation, productivity, exports and wealth creation.”

Esmond Birnie, PwC’s chief economist, said: “It is clear from the government’s own estimates that the cuts are equivalent to

20,000 public sector jobs here in Northern Ireland.

“To compensate for spending cuts of this magnitude, the private sector would have to grow by more than 1% per annum.

“In the current circumstances, this level of growth is virtually impossible.

“Finding new ways of driving private sector growth must now be our overriding priority and embracing the government’s proposed tax incentives will help lure overseas investment and stimulate new and profitable exporters.”

The firm claims losses of UK public and private sector jobs could total 943,000 by 2014/15 — around 3.4% of total employment. Business services and construction would be hardest hit as public bodies tighten their belts and slash capital budgets.

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