‘Cuts put 17,000 jobs in jeopardy’ (From The Northern Echo)

‘Cuts put 17,000 jobs in jeopardy’

8:48am Monday 22nd March 2010 in

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BUSINESS leaders have warned that 17,000 jobs could go if steps are not taken to offset an £850m drop in local authority spending.

According to the North East Chamber of Commerce (NECC), council cuts in expenditure on major investment projects threaten to damage the region’s economic recovery.

Research by the NECC shows that councils in the North-East are predicting the amount they will spend on large building projects will shrink from more than £1.4bn this year, to less than £600m by 2012-13.

To limit the damage to the economy caused by the cuts, the NECC is calling for local authorities to commit to three measures:

● Avoid using nationallynegotiated contracts for future construction contracts;

● Include clauses in contracts that reward local employment and training;

● Monitor rigorously those suppliers that say they will use local sub-contractors when delivering work.

Industry experts estimate that every £1m of public sector infrastructure expenditure creates 20 construction jobs, meaning 17,000 jobs could be at risk.

Martyn Pellew, NECC president, said: “North-East councils need to take a more proactive approach to the way they award contracts. It is essential that local authorities make sure they squeeze the maximum value for the North-East out of every penny.”

The NECC said the figures added weight to its Buy North-East campaign, launched in November 2007, to lobby local authorities to recognise the impact smarter awarding of contracts would have on the regional economy.

The campaign identified that a one per cent increase in public sector spending in the North-East every year to 2016 would bring an additional 6,000 jobs and £1.35bn in investment.

The NECC has also written to Chancellor Alistair Darling encouraging him to pilot innovative finance schemes in the North-East.

The NECC argues that creating accelerated development zones would enable and incentivise local authorities to develop infrastructure that will attract business growth.

Barry Rowland, chief executive of Newcastle City Council, who leads the regional collaborative procurement programme for the Association of North-East Councils, said measures to reform the procurement process were already being looked at.