David Bell: From next April cuts are going to kick in and jobs will inevitably go

Published on Wednesday 14 July 2010 18:45

THE impact of cuts in the public sector has yet to be felt in full by people working in the sector and those using services.

The times ahead for the public sector are not particularly good ones and we'll start to see the full impact of cuts during the next financial year.

We'll know more after the decisions of the UK Government's spending review in the autumn in terms of what the actual cuts will be.

But the real impact will start to be felt in April 2011 at the start of the 2011-12 financial year. In the meantime the rest of the UK economy doesn't appear to be doing too badly, so hopefully the private sector can bring some benefit to employment.

All that is likely to happen though is that we won't lose jobs in the private sector, but in April next year there is likely to be a significant donwturn in public sector jobs.

As the cuts in the NHS are not likely to be very much there could be bigger cuts than the forecast 16 per cent or 17 per cent in some public sector departments and there has been talks of 40 per cent in some areas.

There is nothing that suggests that Scotland is not going to have an extended period when unemployment is more than that of the UK as a whole.

We've got to encourage the private sector to expand and banks have a role in this in terms of investment.

That has to be done by making it easier for businesses to get loans, so that they can invest and create jobs.

We've probably grown the public sector too fast and we've had too many people thinking that the good times are here to stay.

But next April the cuts are going to kick-in in a big way and it's almost inevitable that there are going to be some job losses. Between 1995 and 2006 Scotland had a higher rate of unemployment than the UK as a whole. Then after 2006 Scotland's figures was lower and this trend continued until very recently as we can see from the latest figures that have been released.

Now we've gone back to where we were between 1995 and 2006 and of course this will be felt in the public sector in the months and years ahead.

It's too early to say how long it will last for, but it's unlikely to be a trend that changes for a while due to the austerity measures we're facing.

• David Bell is professor of economics at Stirling University