Public sector cuts 'threaten the North East'

Jan 26 2010 by William Green, The Journal

PUBLIC sector spending cuts not seen for a lifetime pose a major threat to the North East’s economy, it has been claimed.

Independent spending watchdogs giving evidence to MPs about the impact of moves to slash Britain’s £178bn debt have raised the spectre of job losses – but insisted services would not be fundamentally affected.

With one in three of the region’s workforce employed in the public sector, job losses would have a devastating impact on the North East.

Newcastle Central MP Jim Cousins warned the region’s economic base was at risk, while TUC regional secretary Kevin Rowan said private firms depended on public sector workers spending money.

The warnings came after Steve Bundred, chief executive of the Audit Commission, and Amyas Morse, head of the National Audit Office (NAO), gave evidence to the Commons public administration committee.

Mr Bundred said: “It is undoubtedly the case we are going to experience spending cuts of a kind that haven’t been seen probably in the lifetime of any of those currently working in the public sector.”

He insisted it was possible to reduce public spending – including on the front-line – without fundamentally affecting services, although it would not be easy.