Report warns about massive cuts in spending

Jan 16 2010 by William Green, The Journal

THE North faces a new recession if politicians slash public spending too quickly, a report warns.

All three main political parties are committed to public spending cuts to slash Britain’s record £178bn debt after the General Election, increasingly expected this May.

But in a new report, regeneration expert Michael Parkinson has warned that early cuts could choke off the region’s recovery and hit the national economy.

Around one in three of the North East workforce is employed by the public sector, which the report says has played a key role in picking up the slack left by private firms hit by the credit crunch.

It says the Government, regional development agencies (RDAs) and local authorities have stepped in to keep momentum going where possible.

But a “public sector recession” could jeopardise the development of many projects vital to economic growth in the North of England, according to the report commissioned by the Northern Way development agency.

The report stresses it is not a “begging bowl”, with the region having played an increasingly important role in UK plc over recent years and still offering major opportunities to private business.