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This was the stark warning given by Richard Diment, Director General of the Federation of Master Builders (FMB), speaking to the FMB London Regional Council in central London, ahead of the forthcoming Spending Review next month.
Mr Diment said: "The Government’s big idea is that jobs lost in the public sector will be replaced by new job creation in the private sector. The problem is that public sector cuts are moving at a far greater pace than private sector jobs growth, leaving a massive employment gap in the middle. These cuts are not just direct public sector jobs, but also at firms whose business is supplying the public sector with the skills expertise and services it needs to deliver government priorities.
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"The public sector procures around 40% of all construction work and major cut backs will inevitably result in jobs being lost at private sector firms which work for public sector clients because as recent figures have shown that there is not enough additional private sector work to pick up the slack."
The FMB is worried that the Government is set to make the informal economy problem even worse in January when VAT will rise to 20%.
Mr Diment concluded: "This will cost 7,500 jobs in the domestic repair and maintenance sector within a year, and the total cost to the economy of this policy could be as high as 34,000 jobs."
(CD/GK)
