Concern that Private Sector will not be able to pick up the slack in Scotland

Lisa Boutineau, the regional director for REC Scotland said that “As Scotland has been one of the regions most hardest hit, we need urgent action to boost our labour market. The feedback from recruitment professionals shows increasing hiring activity in some sectors but there are major challenges facing specific groups of jobseekers – particularly young people wanting to break into one of the most competitive labour markets in recent times. As an industry, we are working with employers and education providers to help build better bridges into the world of work and to spearhead a radical shake-up in the support and guidance offered to the increasing number of job-seekers. Our biggest concern is whether the private sector can absorb the predicted fall-out from the forecast public sector cuts. The risk is that this could deliver a further set-back to the already fragile jobs market. Rather than simply looking for short-term cuts in the public sector, we need to drive more deep-rooted reform and develop flexible staffing models that provide opportunities for job-seekers as well as cost-effective ways of delivering services. Other priorities must include boosting private sector job creation and entrepreneurship   – in particular, by stripping layers of red tape from existing and forthcoming employment regulations and through tax incentives.”

The comments come at the same time as business groups voice concern that the Coalition Governments Comprehensive Spending Review may end up creating a new North / South divide; mainly due to the North’s heavy reliance on public sector employment. The Senior Economist at The Work Foundation, Neil Lee, said that \”The public sector is not just an employer – it provides services and is an important customer for local businesses. Cutting public spending will have knock-on effects on private sector employment, and this will be worse in areas with weaker economies.\”

The Director of the Institute of Public Policy Research North, Ed Cox, said that \”The severity and speed of the cuts threatens the recovery in Northern England which was hardest hit by the recession and is still struggling to recover. With so many jobs in the North reliant on the public sector, fast and deep cuts risk a sudden surge in unemployment and a leap in the welfare bill.\”

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