For a long while I’ve felt a little like a lone voice in the wilderness regarding the damage that an over reliance on public sector employment is doing to many of our towns and cities – especially in the North of England. Moving public sector jobs “up north” has been popular with policy-makers wanting to try and fix the decline in traditional manufacturing jobs (so long as it doesn’t include said policy-maker having to relocate from the soft south, of course).
However, the Centre for Cities has now issued a strong challenge to this orthodoxy – arguing in a recent paper, Public Sector Cities: Trouble Ahead that cities are:
“…investing an undue amount of time and resource into competing for a small number of relocating public sector jobs. Promoting private sector growth would be a more sustainable option.”
The paper also reveals just how dependent the economy of some towns is on continuing public sector largess. Eleven towns & cities have more that a third of their work force in the public sector including Liverpool, Oxford and Barnsley. And as the inevitable public spending cuts arrive it will be workers in these places that go ahead of the more proximate Whitehall bureaucrats.
But it’s not just the jobs it’s the squeezing out of enterprise by the dominance of public institutions – nationally there are 415 VAT-registered businesses for every 10,000 people. In Liverpool this figure is just 241, in Barnsley 274 and in Plymouth a measly 233. Since I don’t believe folk in these places are much different from more enterprising places, there has to be cultural and environmental factors leading to this deficit – and the leaden hand of dominant public institutions provides just those factors. Not being enterprising because Dad expects you to go down the pit has been replaced with not creating because there’s an admin job at the DWP.
In truth too much of the North’s economy is made up from public expenditure – by what amounts to a subsidy from the rich South to the poor North. And the result is that the North does not add value – does not earn its share of the nation’s wealth. In 2005/6 public spending and GVA per capita by region related inversely to levels of public spending:
However, the Centre for Cities has now issued a strong challenge to this orthodoxy – arguing in a recent paper, Public Sector Cities: Trouble Ahead that cities are:
“…investing an undue amount of time and resource into competing for a small number of relocating public sector jobs. Promoting private sector growth would be a more sustainable option.”
The paper also reveals just how dependent the economy of some towns is on continuing public sector largess. Eleven towns & cities have more that a third of their work force in the public sector including Liverpool, Oxford and Barnsley. And as the inevitable public spending cuts arrive it will be workers in these places that go ahead of the more proximate Whitehall bureaucrats.
But it’s not just the jobs it’s the squeezing out of enterprise by the dominance of public institutions – nationally there are 415 VAT-registered businesses for every 10,000 people. In Liverpool this figure is just 241, in Barnsley 274 and in Plymouth a measly 233. Since I don’t believe folk in these places are much different from more enterprising places, there has to be cultural and environmental factors leading to this deficit – and the leaden hand of dominant public institutions provides just those factors. Not being enterprising because Dad expects you to go down the pit has been replaced with not creating because there’s an admin job at the DWP.
In truth too much of the North’s economy is made up from public expenditure – by what amounts to a subsidy from the rich South to the poor North. And the result is that the North does not add value – does not earn its share of the nation’s wealth. In 2005/6 public spending and GVA per capita by region related inversely to levels of public spending:
Public Spending % of economy
North East: 61.5; North West: 52.6; Yorkshire:48.9; South East: 33.9; London: 33.4
GVA per capita
North East: 13.5; North West 15.0; Yorkshire 14.9; South East 19.5; London 22.2
In the end places get richer (however you wish to define that idea) because of the enterprise, initiative and creativity of the people who choose to live in that place. Importing soul-less, stifling public sector employers is killing that drive.
