By Paul Dicken in Cardiff
July 1, 2009
Job losses in the Welsh public sector will bring a ‘second wave’ of the recession to Wales, a major study has warned.
The study, presented at the Welsh Local Government Association’s annual conference on June 25, investigated the effect of the recession and councils’ response to it.
It found that a third of Welsh jobs were in public services and the sector had provided a shield as jobs were lost in other sectors. However, the slowdown in public spending meant public sector job cuts would contribute to the predicted 3.6% decline in employment by December 2011, said the study by research consultancy Old Bell 3.
On the same day, the Institute of Welsh Affairs published research predicting a £2.2bn fall in real-terms public spending in Wales between 2011/12 and 2013/14. The research, by Plaid Cymru economics adviser Eurfyl ap Gwilym, deputy chair of the Principality Building Society, said the move to reduce public sector net investment to 1.25% of gross domestic product by 2013/14 would represent an average loss of 17.2% per year.
Speaking at the conference, WLGA leader John Davies said ‘sharing the burden must be the theme’ as the Assembly Government made decisions on spending.
‘Sadly public finances will take many years to recover from the financial meltdown, yet the idea that some sectors can be completely protected during this phase while local government services take the strain is both a travesty and bad public policy,’ he said.
The Old Bell 3 report, The impact of recession across Wales and ways local authorities can support sustainable economic recovery, said the economic picture in Wales was not entirely gloomy as ‘sub-sectors’ of areas like manufacturing and construction, such as aerospace and biotech industries, had retained jobs.
Anecdotal evidence also suggested there was increasing interest in self-employment and small-scale investment by new businesses, even in areas with a poor history of entrepreneurship.
The reports said authorities’ response to the recession has been varied, with some introducing emergency measures such as redundancy support schemes and others focusing on longer-term challenges of generating economic growth.
The report recommended that authorities prioritise investment in capital projects that were likely to have a swift impact on jobs. They should also lobby the Assembly Government for speedier release of European Union Convergence funding, while continuing efforts to increase the local impact of public procurement.
Authorities should also balance the needs of people who have been unemployed for a short period, focusing on school and college leavers, with those unemployed in the long term.
July 1, 2009
Job losses in the Welsh public sector will bring a ‘second wave’ of the recession to Wales, a major study has warned.
The study, presented at the Welsh Local Government Association’s annual conference on June 25, investigated the effect of the recession and councils’ response to it.
It found that a third of Welsh jobs were in public services and the sector had provided a shield as jobs were lost in other sectors. However, the slowdown in public spending meant public sector job cuts would contribute to the predicted 3.6% decline in employment by December 2011, said the study by research consultancy Old Bell 3.
On the same day, the Institute of Welsh Affairs published research predicting a £2.2bn fall in real-terms public spending in Wales between 2011/12 and 2013/14. The research, by Plaid Cymru economics adviser Eurfyl ap Gwilym, deputy chair of the Principality Building Society, said the move to reduce public sector net investment to 1.25% of gross domestic product by 2013/14 would represent an average loss of 17.2% per year.
Speaking at the conference, WLGA leader John Davies said ‘sharing the burden must be the theme’ as the Assembly Government made decisions on spending.
‘Sadly public finances will take many years to recover from the financial meltdown, yet the idea that some sectors can be completely protected during this phase while local government services take the strain is both a travesty and bad public policy,’ he said.
The Old Bell 3 report, The impact of recession across Wales and ways local authorities can support sustainable economic recovery, said the economic picture in Wales was not entirely gloomy as ‘sub-sectors’ of areas like manufacturing and construction, such as aerospace and biotech industries, had retained jobs.
Anecdotal evidence also suggested there was increasing interest in self-employment and small-scale investment by new businesses, even in areas with a poor history of entrepreneurship.
The reports said authorities’ response to the recession has been varied, with some introducing emergency measures such as redundancy support schemes and others focusing on longer-term challenges of generating economic growth.
The report recommended that authorities prioritise investment in capital projects that were likely to have a swift impact on jobs. They should also lobby the Assembly Government for speedier release of European Union Convergence funding, while continuing efforts to increase the local impact of public procurement.
Authorities should also balance the needs of people who have been unemployed for a short period, focusing on school and college leavers, with those unemployed in the long term.
