Top 40 local authority areas by % of workers employed in public sector

THE growth of public spending under Labour has created a generation of “Soviet” boroughs where half the population is dependent on the state for work.

An analysis of official figures has shown 10 areas where more than 40% of the workforce is employed in the public sector.

Increased reliance on the state has come with the failure to develop new industries to replace mining and manufacturing.

Topping the league is Castle Morpeth, Northumberland, where the state provides 57% of jobs. Even this understates public sector dominance - the town is a dormitory for HM Revenue and Customs offices 10 miles away that employ 6,000 people.

The northeast dominates the “Soviet” league, drawn up by the Centre for Economics and Business Research. Whitehall has located agencies there to soak up unemployment caused by the decline of manufacturing and mining.

Chris Grayling, shadow work and pensions secretary, said: “The government has let Britain slip down the competitiveness league with the result that, in towns like this, the private sector has become a minor part of the local economy.” Five miles from Morpeth is Wansbeck, the second most state-dominated borough in Britain with 47.5% employed by the state.

Other such areas include Hastings in East Sussex, Ceredigion in west Wales and Inverclyde, west of Glasgow.

Richard Dodds, a farmer and Conservative councillor on Castle Morpeth borough and Northumberland councils, said: “I produce wheat and cattle but there are a lot of people who produce absolutely nothing.

“Everything is about monitoring performances and going on courses. We’ve had an awful lot of white elephants and nonjobs created in the northeast.” The research centre found that 1.3m jobs were created in health, education and public administration from 1998 to 2006, helping mask the loss of 1.1m manufacturing jobs.

Morpeth is one of the most desirable places to live in the northeast and houses many civil servants. In the nearby village of Ponteland, home to Alan Shearer, the former England football captain, houses sell for £1m.

Employment statistics, across the borough, however, paint a different picture.

The closure of nearby Ellington colliery, once one of the area’s biggest employers, in 2005 saw the number of people employed in mining fall from 861 in 1998 to 316.

Manufacturing has also suffered, with the number of jobs falling by 42% to 704.

The decline of industry has been accompanied by a dramatic rise in public sector employment, which has increased from 8,898 people in 1998 to 13,629.

The number of workers in local authorities, the police service, hospitals, universities, schools and courts now far outweighs the area’s private sector.

Wansbeck has seen a 40% decline in manufacturing over the past decade. In 2002 the former mining town of Ashington was hit by the closure of the Dewhirst clothing factory, with 420 jobs lost to Morocco. A fivefold increase in the number of people employed in public services has softened the blow.

In both Wansbeck and Castle Morpeth, state dependency may be even higher because the research fails to take account of those reliant on state benefits. In Castle Morpeth, 1,050 people receive benefits, while in nearby Wansbeck the figure is nearly 2,600 residents.

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