Scotland will lose as many as 30,000 jobs from its public sector in the next four years, Ernst & Young LLP’s Scottish Item Club said.
The staff cuts will come as a result of spending reductions to curb Britain’s record budget deficit. Employment in the public sector will grow “only marginally” thereafter, the group, which uses the same economic model as the UK Treasury, said in an e-mailed statement yesterday.
Unemployment in Scotland will peak at between 220,000 and 225,000 this year.
“While the slow healing process following the global financial crisis is under way, Scotland is not out of the woods yet,” Dougie Adams, an economic adviser at the forecasting group, said in the statement.
“There is real pain to come in the form of public-sector spending cuts,” he said.
British Prime Minister David Cameron’s UK coalition government will set out its emergency budget on June 22 and conduct a spending review in the fall to trim the biggest budget deficit in peacetime.
Scotland’s recovery will be outpaced by that of the UK as a whole after it emerged from recession at a slower pace in the fourth quarter of last year, the report said.
“The economy’s greater dependence on the public sector and the weakening of the Scottish export base in recent years are major handicaps,” the report said.
“Scotland is destined to lag behind the UK recovery,” it added.
Gross value added in Scotland will expand at a pace of 0.8 percent this year, more than the 0.7 percent previously forecast, the group said.
Next year, the Scottish economy will expand on that basis by 2.3 percent and 2.9 percent in 2012, lagging the UK as a whole, where growth is forecast to reach 2.7 percent next year and 3.4 percent in 2012, the group said.
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