Relative to the national average the North East relies heavily on the public sector for employment, the sector accounts for 32% of employment in the region compared to only 27% in the rest of the UK.

These figures have led some to suggest that the North East is over reliant on the sector, in reality the discrepancies are mainly due to a below average business stock. Economists estimate that the region requires another 32,000 businesses if it were to operate at the national average for GVA per head. If this was achieved the proportion of public sector employment would be significantly reduced.

The sector has been important in providing stability to the region; it has offered meaningful and secure employment for workers across the skills spectrum. It will also play a significant role in encouraging an increased business support by providing the necessary support and skills.

Government plans to outsource public service delivery to private and voluntary organisations could begin to reduce the levels of employment in the sector, although these schemes are dependent in the effective transfer of relevant skills into these new delivery organisations.

Fact File   

• Despite an overall growth in the number of public sector workers in the North East the region has seen no change in the public/private ratio since 2002.
• By 2012 NE employment in non-marketed services is expected to reach 33%.
• The sector accounts for 17.8% of UK output, this is projected to grow to 18.1% by 2014.