London is expected to see the largest number of job losses as a result of government cuts, but Scotland, Wales, Northern Ireland and North-east England are likely to suffer more proportionally, a new report claims.
The report from PricewaterhouseCoopers claims that by 2014/15 nearly half a million jobs could be lost in the public sector, with another half a million being lost in the private sector.
The cuts may also lead to a reduction in private sector gross output of around £46 billion per annum by 2014/15.
In a regional breakdown of where job losses were likely to occur London was found to be in line to lose the most, with 122,000 jobs, representing 3.1 per cent of total jobs in the region, expected to go. Proportionately Northern Ireland stands to lose the most however, with 36,000 jobs likely to be lost, representing 5.2 per cent of jobs in the region. Scotland, Wales and the North-east of England also stood to lose 4.1-4.3 per cent of jobs.
Despite the apparently grim picture PwC said that the cuts also presented employment opportunities in the private sector, particularly in areas such as outsourcing.
John Hawksworth, Chief Economist at PwC, said, "Predicted levels of public and private sector job losses will be a drag on the pace of the economic recovery, but should not derail it altogether. While private sector employment may be affected as much as the public sector, this could be mitigated by increased labour market flexibility on wages and hours worked, as we saw in 2008-9 recession. Evidence from the 1993-99 fiscal consolidation showed a net rise of around 1.2 million in private sector employment during those years.
"Although the recovery may not be as strong this time as in the 1990s, we would expect at least some rise in private sector employment over the next five years despite the fiscal squeeze, bearing in mind that this squeeze should allow interest rates to remain lower for longer."
Jon Sibson, Partner and Head of Public Sector at PwC, added, "A sector likely to see growth opportunities from spending cuts is outsourcing, and not only in back office services. Government and public sector organisations will look to reduce their non-core and fixed cost operations by increasing the use of private and voluntary sector organisations for the delivery of front-line services. Organisations with flexible supplies of labour, such as manpower service providers, will have new opportunities in future. Partnerships between government and private sector manpower providers could be put in place to performance manage and retrain staff, find new employment for them where possible, and to manage redundancies when necessary."