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date: 9 November 2009

embargo: 00.01hrs Tuesday 10 November 2009

A strong public sector can help lift the UK out of recession, says TUC

Any cutback in public spending would prolong the UK's economic agony, limit the country's ability to haul itself out of recession, reduce key services at a time when they are most in need and lead to thousands of job losses, says a TUC pamphlet published today (Tuesday).

The latest in the TUC's Touchstone series - Speaking up for Public Services - says that widespread cuts in budgets would see workers losing their jobs in the private as well as the public sector. According to the pamphlet, for every £1 of public money invested in public services through direct employment and through procurement of supplies and services, a further 64p is generated in the local economy.

Written for the TUC by the Association of Public Service Excellence (APSE), the pamphlet includes the results of a survey of 2,000 public sector employees. This finds that 92 per cent of them have seen an increased demand for their services since the recession as families struggling to get by seek help with housing problems, debt advice, training and job hunting.

Published in advance of tomorrow's latest unemployment figures, which will include a growing number of public sector job losses, the pamphlet warns that maintaining investment in public services is vital to preventing long-term unemployment and minimising the social and economic impacts of the downturn for individuals, families and communities.

Speaking up for Public Services finds that every three per cent rise in unemployment leads to a 2.7 per cent rise in heart attacks among men aged 30-44 and increases of 2.4 per cent in murders and suicides in people under the age of 64.

The TUC pamphlet also shows that the recession and rising unemployment are a major source of the increase in poverty - 70 per cent of non-working families are poor compared to only five per cent of working families. Public services are essential to preventing these social costs, says the TUC.

The pamphlet also says that a ten per cent cut in spending levels would see around 200,000 public sector workers losing their jobs. And as around 29 per cent of public sector expenditure goes into the private sector, this would mean a loss of around £16.8 billion in investment - a move which would also lead to many private sector job losses.

TUC General Secretary Brendan Barber said: 'Public spending is a key election battleground. Immediate and sweeping cuts would be disastrous for the economy, for workers and for the users of public services.

'We need the public sector more than ever in a recession. Sharp cuts in public spending would not only hit the most vulnerable in society, but would also hamper the chances of growth, increase the incidence of long-term unemployment and cause widespread job losses in both the public and private sectors.

'Unemployment is now increasing at a slower rate than many were predicting. But long-term unemployment is likely to continue rising sharply for many months to come. Cutting back on public spending would put thousands of workers at risk of permanent worklessness, risking a repeat of the enormous social and economic costs of the 1980s.'

Paul O'Brien APSE Chief Executive said: ''Whilst the public sector may seem a fashionable target for cuts there is a real danger that slashing public expenditure, when the economy is on a fragile road to recovery, would lead to a 'double dip' in a post recession environment.

'The public sector value to the overall health of the economy, particularly local economies needs to be recognised as an integral part of recovery. Far from being a drain on finances, public service investment over the last ten years appears to have paid off with service improvements and value for money gains. Public services can provide a steely local resilience in terms of jobs, skills and anti-poverty strategies.'

NOTES TO EDITORS:

- A copy of Speaking up for Public Services: The Vital Role of the Public Sector in and Beyond the Recession is available at http://www.tuc.org.uk/extras/speakingupforpublicservices.pdf

- Copies of the pamphlet, the seventh in the series of Touchstone pamphlets, is available free to download at www.tuc.org.uk/touchstone or hard copies cost £10 from TUC Publications on 0207 467 1294.

- This latest Touchstone is just one of the stories being published by the TUC in the run up to its major economic conference later this month. Beyond Crisis: A Progressive Future for the UK Economy will look at the impact of the financial crisis on the UK economy and consider how progressive thinking could shape its future. The day long event takes place at Congress House from 9.30am to 4.30pm on Monday 16 November. Speakers include the Archbishop of Canterbury Dr Rowan Williams, TUC General Secretary Brendan Barber and Minister for Business, Innovation and Skills Pat McFadden MP. If you would like to attend all or part of the conference, contact the TUC press office.

Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk

Press release (900 words) issued 10 Nov 2009