Latest statistics released by the Centre for Economics and Business Research have shown that unemployment rates will soar to 10 percent in the North of England and 11 percent in Wales in the next five years. The drastic cuts in public spending will see unemployment rates will settle at seven or eight percent in the South of England and London.

London and the South have been benefiting from an increase of job offers as a result of greater activity in the financial and business services sector. The IT sector has also shown an improvement in job prospects. The greatest concentration of public sector employees is situated in the North of England and Wales, and so these areas will suffer greater damage following the public sector spending cuts. The private sector also has fewer vacancies in the North.

Owen James, who has compiled the report said:

“The gloomy figures may not come as a surprise to some, given the tentative signs of recovery in the UK labour market over recent months.”

He also warned that private sector contractors, including umbrella company contractors, who are working on contracts in the public sector, may also be severely affected by the public sector spending cuts. The wide variation in unemployment rates in different regions of the UK may not come as a surprise to many.

The Chief Executive of Centre for Economics and Business Research, Douglas McWilliams said that the private sector required more time to create work to fill gaps left by the public sector cuts. The country is expected to suffer as this transition is made.

Unemployment is currently at 2.49 million across the whole of the UK, with an unemployment rate of 7.8 percent. Umbrella company contractors are amongst those who can provide flexible employment as a solution for SME’s and others, as the UK looks to rebuild its economy.