Business

How quango cuts will hit Coventry

QCDA sign, Coventry
Image caption The QCDA is one of two quangos to close in Coventry

Coventry is a city famous for car making, but these days it is public sector workers that are driving much of the local economy.

And Coventry is the first big victim of the government's £6bn-worth of spending cuts.

Included in that announcement was some £600m of cuts to quangos. The aim was to reduce "inefficiencies and waste".

Culling a few quangos may seem like one of the easier decisions the coalition will have to make as it tries to reduce the public deficit.

But just over a month on from that announcement, the reality is far from simple for Coventry.

Two big quangos are being abolished.

They may not have the same romance associated with the car manufacturing, but the jobs they provide are just as real.

First to face the axe is Becta, which employs 240 people to improve technology in schools. It will close within nine months.

Further up the road, another education quango, the Qualifications and Curriculum Development Agency, is also being abolished.

Skilled workers

It employs more than 500 workers, many of whom are former teachers, and like Becta, they still don't know who will be redeployed or made redundant.

The QCDA office is a brand new purpose-built building - you can even tell by the smell in the very smart new reception.

The workers only moved in at the start of the year after the agency was relocated from London. The move alone cost the Government more than £44m.

Image caption The last cars rolled off coventry production lines in 2006

There has been huge personal cost for some of the staff as well, who have relocated from London with their families or partners.

"My husband left his job. We sold a property and we found a place here. I don't know what is going to happen," said one worker.

"Because of the importance of your work, which affects millions of pupils and teachers, you thought no, I will do it.

"I understand this is important, we are in huge debt, but they've done it in the most insensitive way and they haven't thought about the people behind this work, how it's affecting our lives.

"Where suddenly will 800 skilled people find a job in a city of 300,000?"

That is the question that everyone's asking around this city.

Coventry knows all about heavy job losses. Back in the 1980s it was hit very hard with the decline of manufacturing centred around the car industry.

Professor David Bailey, from the Coventry Business School, says the city has worked hard to bring new jobs to the city:

"The city council and others have diversified the city economy into new areas including public services. The big danger now is that those cuts in public services could have a profound effect on a city that has already suffered greatly and rebuilt itself," he said.

Image caption Kathy Prendiville from the PCSU fear cuts are being rushed through

Coventry City Council has already been doing some sums.

Its leader, Councillor John Mutton, reckons this initial round of job losses could result in £25m being taken out of an already fragile local economy.

He has lent his support to a plan by local public and civil service union representatives to fight the job cuts. Ultimately he fears as many as 10,000 jobs could be lost in the city.

"We could well be talking about 10,000 jobs which will be £250m out of the local economy, which is virtually the budget of the City Council in a full year. That's how serious the situation is," he told the meeting.

The government says redundancies will be handled sensitively and that tough decisions have to be made.

But the local Public and Commercial Services Union believes the Coventry cuts have been rushed through without any proper financial analysis.

"It's cuts first, questions later," said Kathy Prendiville, one of the regional officers.

"Coventry will be a litmus test. We are the first city to suffer so many cuts and if they get such a disastrous decision wrong here what does it mean for the rest of the country?"

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