Wales

How will public spending cuts impact on Wales?

I began my journey in Blaenau Gwent - an area with a heavy dependence on the public sector.

About 30% of the working population are employed by the state and around 15 percent of people are on incapacity benefit - one of the highest figures in Britain.

Chief executive of Blaenau Gwent Council, Robin Morrison, says a worst case scenario is for his budget to be cut by around a quarter over the next four years.

He gave me an interesting glimpse at the books.

The council spends £133m a year and much of that is dominated by a relatively small number of services. £57m goes on education, £34m on social services and nearly £11m on highways and regeneration.

On that basis, it would seem that the budgets for these core services will have to be tackled if significant reductions are going to be achieved.

Robin Morrison says he has had to face cuts before but nothing on this scale or speed.

Of course, it's not just those on benefits, those using services or those who are employed by the public sector who could suffer - one of the big unknowns is the impact on the private sector.

I went to the appropriately named Kutz n Kurlz hair salon in Brynmawr.

The owner Donna Wallbank says a third of her customers work for the local authority so the knock-on effect is obvious for her bottom line.

After coming through the recession relatively intact, she believes the effect be a double-whammy.

I also spent some time in Llandrindod Wells. You may not think of rural Powys as an area particularly dependant on the public sector but that is exactly the case in towns like Llandrindod.

There's a new supermarket and there's farming which has coped better than many industries in recent years, but the biggest employer is County Hall.

That certainly wasn't the case at my next stop - Wrexham industrial estate.

It is known as one of the workshops of Wales with many large private sector employers like JCB and Kellogs.

However, in the middle of the estate I met Jamie Edwards from a company which installs tracking devices for commercial vehicles.

Public sector contracts now account for 30 percent of his business.

The big fear for him is that some of that work will dry up.

His sales pitch to councils is you have to spend to save but it's a difficult sell when local authorities are looking at cuts to capital budgets of around 10 percent.

But there are opportunities.

Outsourcing firms for a start will be looking to pick up work if in-house facilities like repair depots, human resources and health and safety departments are closed.

There's a stark contrast in attitudes now between outsourcing firms like the MJL group in Abercynon which is looking at a 30 percent rise in business and the public sector unions fighting hard to keep as many services in-house as possible.

BBC Radio Wales' Wales@Work business programme, presented by Nick Servini, goes out on Monday at 1900 BST.

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