Up to 116,000 jobs could go across the region over the next five years, according to analysis by economists at the South West Observatory Economy Module.
In a report on the likely impact of budget cuts on the region written jointly with the Observatory network, the research shows that around 86,000 public sector jobs could go. In addition 10,000 jobs could be lost across distribution, retail, hotels and accommodation as wages and consumption fall and 7,300 jobs in business services.
The cuts would result in a corresponding loss of £4.2 billion Gross Value Added, the measure used to estimate the value of goods and services produced in an area, industry or sector of an economy.
The RDA’s economists suggest that rural areas such as West Dorset with a high dependency on public sector jobs are likely to be hard hit. While urban centres such as Bristol may suffer greater job losses, the private sector may be able to take up more of the slack. Other areas, such as smaller urban centres and peripheral areas - where private sector activity is weaker - will feel the effects most.
Nigel Jump, Chief Economist, said: “The South West has depended heavily on public sector jobs in the past decade and a half. This will not continue, and, in the short term, there seems little prospect that the private sector will fill the gap. In areas such as West Dorset, where the public sector accounts for nearly 40 per cent of employment, or Torbay, which also has a flagging economy and relatively high dependence upon the public sector, that could mean quite a shock. We’ll start to learn more in the autumn, when the Comprehensive Spending Review is published.”
Vinita Nawathe, Managing Director of the South West Observatory, said: “While a lot of the detail is yet to be understood, this report makes use of the best available evidence from the South West Observatory’s established local and regional network of intelligence experts. The report does indicate cuts across the public sector will be hard felt across the South West. Our network will review and update the evidence as more information becomes available.”
The wide-ranging analysis demonstrates that large scale cuts across the region in defence could also affect the South West disproportionately. Defence has a strong presence in the South West, which accounts for 37 per cent of England’s civil service defence employment and 29 per cent of regular armed forces personnel. Any cuts are expected to be compounded by the effects on the defence supply chain, with many key defence contractors located in the South West.
The full report can be accessed by clicking on the links at the top.