Spending Review: Fear for 80,000 West Midlands jobs

Up to 80,000 public sector jobs could be lost in the West Midlands as a result of the government Spending Review, a report has claimed.

More than 300,000 private sector jobs that rely on government contracts are also at risk in the region, it says.

The figures are from a report by the West Midlands Regional Observatory.

Employment levels in the West Midlands are not expected to return to pre-recession levels until after 2030, the organisation claims.

But its forecast does not account for new private sector jobs that the government hopes will arise from a reduction in public sector services.

The West Midlands Regional Observatory report said the economy of the region was particularly vulnerable to the impact of the cuts because it was the only part of England to experience a decline in private sector employment between 1998 and 2008.

It said the area also lagged behind other regions in terms of business innovation and diversification into new products, services and markets.

"As a result the region's dependence on public sector employment has increased significantly," the report says.

"We forecast that between 2010 and 2016 public sector employment across the West Midlands will fall by more than 80,000 with job cuts of nearly 35,000 in education, nearly 30,000 in health and social care and nearly 18,000 in other public sector organisations such as the police and fire services, local authorities and regional offices of national government and other public bodies."

The worst hit areas are likely to be Stoke-on-Trent in Staffordshire and Wolverhampton in the West Midlands, the report says.

This is because of their lack of business diversity, the low wage and skill level of the workforce and the extent of social and economic deprivation.

Both areas are particularly reliant on public sector jobs and are likely to see the most significant job losses, according to the report.