One in 30 Scottish jobs 'could go' through cuts

Image caption,
Pricewaterhouse Coopers predicts that 95,000 jobs will be lost in Scotland

One job in 30 could be lost in Scotland because of the UK government's spending squeeze, according to a new report.

With 95,000 jobs thought to be vulnerable, only Northern Ireland, north-east England and Wales are on track to fare worse due to the effects of the budget cuts.

Pricewaterhouse Coopers says that nearly as many private sector employees could be affected as public sector.

However, it also says the policies could result in jobs being created.

The cuts would help to keep interest rates low, which could protect some private firms, while other companies will see opportunities to pick up business where government is retreating or contracting out its services.

The report reflects on the intention of the coalition government to cut £113bn from its budget. It says the gross impact of the cuts will slash about £46bn from UK output by 2014-15.

The calculation of 95,000 job cuts in Scotland is in line with the academic analysis from the Fraser of Allander Institute at Strathclyde University.

It amounts to 4.1% cut in employment, compared with a UK figure of 3.4%.

The lowest impact would be on London and south-east England, with 3.1% job cuts, or 230,000 people.

The worst affected would be Northern Ireland, with 5.2% fewer jobs.

The construction sector is seen as likely to take cuts of 3% to 5%, with office machinery and defence doing even worse.

'Silver lining'

Paul Brewer, a public sector specialist at PwC in Scotland, said: "While sectors such as construction and business services will undoubtedly be hit harder, others may find a silver lining as government and public sector organisations seek to reduce their non-core and fixed cost operations by shifting delivery of front-line services to private and third sector organisations.

"Outsourcing, for example, may be able to generate new growth opportunities, as could those organisations with flexible supplies of labour, such as manpower service providers".

He urged the Scottish government to have "no sacred cows" in using several different approaches to the spending challenge; including public service reform, new ways of raising finance for capital projects and new ways of raising funds.

"This should not be interpreted solely as a crisis for the Scottish government," Mr Brewer said.

"It's also an opportunity for the private sector to challenge and modernise its own approach to innovation, productivity, exports and wealth creation."

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