Support for the private sector to create jobs is critical in avoiding a double dip recession, according to Dean Shoesmith, president of the Public Sector People Managers’ Association (PPMA) and HR director, Sutton and Merton Council.

Last week Deputy Prime Minister Nick Clegg launched a £1bn Regional Growth Fund to assist areas at risk of being particularly affected by public spending cuts.

The fund, which will operate in 2011/12 and 2012/13, will help areas most reliant on public sector employment. Both private bodies and public-private partnerships will be able to bid for funding by demonstrating that their proposal will bring in private investment and support sustainable rises in private sector jobs and growth.

Shoesmith told Recruiter: “So far, there has been a lot of emphasis on cuts but very little on growth. Economic recovery is often not just about cuts but stimulation of growth. Growth right now is fragile.

“There is a danger that if we cut lots of public sector jobs and if there is not sufficient new private sector jobs creation, we will have rising unemployment and that could cause a double dip.

“Having a local investment cycle is critical to economic recovery as well as to local and national prosperity. There is a big task ahead for the public sector to ensure that workers can work under any sector’s management because we may well see public sector services being transformed where they are run in different ways, sometimes by the public sector but sometimes through shared services.”

Andy Robling, public services director at Hays, adds: “It is positive that the government is being realistic about the need to offer financial support to private sector employers if they are to drive the economy forward in the changing environment. The line between the two sectors continues to blur and both sectors need support throughout the transformation.

“Not only will the private sector need to be encouraged to increase job opportunities but the public sector will need to ensure it remains an attractive employer so that it can recruit the right skills to manage the transformation, despite the job cuts, pension review and salary freeze.

“Hays is adapting its business model to suit the new environment and provide essential support to employers through this period of change by recruiting a new team of relationship managers. The new public sector team will be focused on understanding the needs of employers and devising cost effective solutions.”