Liverpool among cities most exposed to cuts

The five British cities set to be worst-hit by the looming public spending cuts are Sunderland, Liverpool, Birkenhead, Swansea and Newport,a leading think tank will say this morning.

With the country's 11 largest cities home to more than a third of all private sector jobs, their economic performance will be crucial to government hopes for a private sector recovery to offset the impact of the £81bn of public spending cuts.

But cities such as Liverpool and Sunderland – heavily reliant on public sector employment with lower levels of skills in the workforce – will struggle to cope with the cuts, the Centre for Cities says.

At the same time, those that already have vibrant business communities – particularly Milton Keynes, Reading, Aberdeen, Leeds and Bristol – will pull further ahead.

According to the Cities Outlook 2011 report, Liverpool has a whopping 19.5 per cent of residents with no qualifications, one of the worst levels in the country. The unemployment count is already running at around 5.9 per cent and an estimated 2.3 per cent of jobs could be lost from the public sector by 2014-15, while the city boasts a bare 214 businesses per 10,000 people.

By contrast, Reading's claimant count is running at just 2.2 per cent and it faces only 1.1 per cent job losses in the public sector. While 38 per cent of residents have high-level qualifications, it also has 371 businesses per 10,000 people – both higher than the national average.

The impact of welfare spending cuts will also be felt unevenly across the country, according to the report, with Birkenhead set to be worst-affected.