Full Impact on Public Sector Jobs 'Not Yet Felt' BUT PRIVATE JOB CREATION IN WALES IS FAILING TO KEEP UP

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Byline: RHODRI EVANS

WALES has lost 10,000 public sector jobs in a year, but the full impact of the UK Government's cuts is yet to be felt, a new study suggests.

The "Spending Review: One Year On" report, released today by business advisory firm PwC, noted that public sector employment in Wales fell by 2.9% in the 12 months to June, from 345,000 to 335,000.

The report estimates that between December 2009 and June 2011 around 290,000 public sector jobs have been lost across the UK as a whole.

While that UK figure has been offset by 617,000 new private sector jobs, the report found that many of those created have been part-time. It also notes that private sector job creation has stalled in recent months, with 111,000 UK public sector job losses in the second quarter of the year running ahead of the 41,000 private sector jobs created.

Despite the 10,000 losses seen in the Welsh public sector and the 7.5% cut in funding to the Welsh Government the percentage of public sector job losses in Wales was below the UK average of 3.8%, with only the figures for Northern Ireland and the East Midlands lower.

In contrast, the north east and south west of England both saw public sector employment fall by more than 5% in the year to Q2 2011.

This relatively low fall in public sector employment in Wales leads the report's authors to conclude that the full impact of the Chancellor's austerity drive is yet to be felt here and more cuts will follow.

At the time of the Chancellor's Spending Review a year ago PwC estimated that there would be around 435,000 private sector job losses by 2014-15 in addition to the loss of public sector jobs. It had predicted that 52,000 jobs in total would be lost as a result of the cuts in Wales.

At that time PwC predicted that the sectors worst affected by the cuts would be construction and business services. Today's report found that while those predictions had been borne out, the public sector jobs losses across the UK had been more front-loaded than anticipated.

The report cited ONS figures showing that 240,000 fewer people worked in the UK public sector in the second quarter of 2011 compared to the same quarter in 2010. Central government, including the NHS, lost 66,000 employees, and public corporations (such as the BBC and the Post Office) around 29,000, but by far the biggest toll was in local government which lost 145,000 employees in the year to June 2011.

The report noted that over the whole period since the fourth quarter of 2009, around 290,000 public sector jobs have been lost, whereas the Office for Budget Responsibility forecasts in November 2010 projected central and local government job losses of only around 400,000 over the whole Spending Review period to 2015. "The public sector job losses have come much faster than anticipated," said Lynn Hine, PwC partner and head of public sector in Wales. …