Public jobs expansion can drive new growth
Nov 30 2007 by Peter McCusker, The Journal
CONCERNS have been raised after it emerged that 47,000 jobs have been created in the North-East’s public sector in the last five years – as the number of jobs in the private sector fell by 12,000.
However, job creation bodies say this expansion can act as a catalyst for the growth of the commercial sector.
The growth in the public sector – primarily health and education – was identified a “major weakness of the North-East economy” in a recent report by the Tyne and Wear Research and Information for the North-East Regional Skills Partnership.
It added: “For the regional economy to continue to expand employment the private sector needs to achieve major accelerations in output growth to create employment growth.”
Peter Atkinson, Conservative MP for Hexham said: “I am concerned by this rapid expansion and there is a conspicuous imbalance in the North-East at the moment.
The private sector is suffering from the growth of the public sector. It is competing for the same employees and this dependence on public money does not encourage enterprise.”
The Journal reported recently how the stock of North-East business at 46,000 is lower than a region this size should have – which should be 70,000.
Andrew Sugden, the North-East Chamber of Commerce’s director of membership and policy, said: “I am little bit surprised by the findings.
“We are hearing that there is an enormous amount of confidence from businesses expanding and creating new jobs.This is not to be read as the public sector being too big. It highlights the need to encourage a similar growth in the private sector.
“Spending by the expanding number of public sector workers does feed through to some of the leisure and service business in the private sector.”
But Alan Hall, director of Engineering Employers’ Federation (EEF) Northern, said: “The manufacturers I talk to are still reporting strong activity levels.”
However, The Journal also reported that the number of new businesses starting every year is now growing faster than anywhere else in the country.
Chris Pywell, One NorthEast head of strategic economic change, said: “This employment and skills report reaffirms an issue clearly highlighted in the Regional Economic Strategy (RES).
“A new report this week by the Institute for Public Policy Research North stresses that instead of focusing on the relative size of the North-East public sector, it should be seen as an engine for economic growth.
“The public sector is an important contributor to economic well-being in terms of jobs and growth but of course all successful global economies need a vibrant and dynamic private sector.
“The public, private and voluntary sectors are all clearly focused on the need to create a new surge of private companies in the North-East over the next decade, to underpin, stimulate and drive new growth and prosperity. Partnership between these sectors is key to the future of the North-East.”
The number of people employed in the North-East rose by 35,000 between 2000 and 2006. The public sector saw 47,000 people given jobs, taking the total employed to 338,1000 with 81,000 working in administration and 110,000 in education.
The numbers employed in the private sector fell by 12,000.
The number of people employed in the North-East grew by 35,000 between 2000 and 2006
Public service employment stands at 338,100 - up 47,000
Public sector employment breakdown;
Administration –- 81,000
Education – 110,000
Health and social work – 47,100
Private sector employment is down 12,000
Manufacturing jobs in 2006 were 147,900 – down 58,000
