NO STUDY has been carried out into the impact of massive public sector job losses on overall employment in the North, the Government admitted yesterday.

A controversial forecast that employment will rise nationwide – despite unprecedented spending cuts – contains no estimate of where those new jobs will be created, the work minister acknowledged.

Chris Grayling, speaking on the day the latest jobs figures were released, insisted there was a “consensus that we will see employment growth over the next few years”.

But, asked if Merseyside, or other parts of the North heavily-dependent on the public sector, would enjoy employment growth, Mr Grayling said: “We don’t have that kind of forecasting capability.”

He added: “We have not, as a department, sat down and done that. But the forecast in the Budget on the impact of what we are undertaking is that we will see a growth in employment in the next few years.

“In recognition that some parts of the country are more affected by pressures in the public sector than others, we are putting substantial amounts of money, plus tax incentives, into boosting support for the private sector in those areas.”

That extra support included a £1bn “regional growth fund” to encourage private investment, a national insurance tax break for new firms and a forthcoming “Work Programme” for the jobless.

Nevertheless, Mr Grayling’s admission will throw further doubt on a much-disputed forecast that 2m private-sector jobs will be created over the next five years – more than cancelling out job losses.