1/3 in city on public payroll with state spending higher than in communist countries

Finance Minister Sammy Wilson has unveiled figures which show that there were 1,606 permanent civil servants employed in Londonderry at April 2011.

He also revealed that according to the Business Register and Employment Survey 2010 33 per cent of people in Londonderry were employed by the state in total.

The survey shows that there were 14,892 public sector jobs here compared with 30,063 employed in the private sector.

This means 33 per cent of people here are employed by the state with many more reliant on the Government for benefits.

The amount of state money spent here as a percentage of the amount produced economically locally is higher than in current communist countries like China and Vietnam and former Eastern Bloc countries closer to home.

The release of Mr Wilson’s figures comes as the Centre for Economic and Business Research (CEBR) warns that unemployment will keep rising until 2016 right across the entire UK thus driving even further the reliance on state spending.

In 2010/11 the percentage of the Northern Ireland Gross Domestic Product (GDP) that went on public spending was a whopping 67 per cent, which is greater than Vietnam (33.4 per cent), Libya (52.3 per cent), Iran (27.8 per cent), China (23 per cent) and just 8.2 per cent behind Cuba (75.2 per cent), according to figures from the Heritage Foundation think-tank.

Yesterday CEBR stated: “The regions expected to be worst affected by rising unemployment are those most dependent upon the public sector for employment and so are most exposed to government cutbacks.

“These include Northern Ireland, Wales, the North East of England and Scotland. The coming years will be a period of transition for these regions and countries of the UK as public sector support is withdrawn, a process that could help foster private enterprise and job creation in the long run.

“With almost three in ten workers employed by the public sector in Northern Ireland, the increase in unemployment is expected to be particularly pronounced.

“The unemployment rate is projected to rise from 8.8 per cent in 2012 to 10.7 per cent by 2016, weighing down heavily on consumer spending growth in the country. The last time that the rate was this high was in 1995, following the deep recession of the early 1990s.”

CEBR has previously observed earlier this year “in the UK there is considerable variance in tax receipts as a share of GDP between regions - from Northern Ireland where tax is only 27.7 per cent of GDP to London where tax is 45.2 per cent of GDP.”

The business lobby and research organisation also observed that in Northern Ireland state spending exceeds tax by 39.3 per cent of its GDP.