Warning cuts could lead to 100,000 public sector job losses

The Scottish Government was warned there can be "no sacred cows" in efforts to restore growth, in the report.

Paul Brewer, public sector specialist with PwC in Scotland said: "We have already come to anticipate the heavy job losses that are likely to arise in the public sector due to the greater reliance on this sector for employment in Scotland and the impact of the impending spending review, however, what this report emphasises is the knock on effect this might also have on private sector employment.

"While sectors such as construction and business services will undoubtedly be hit harder, others may find a silver lining as government and public sector organisations seek to reduce their non-core and fixed cost operations by shifting delivery of front-line services to private and third sector organisations."

The report indicates that about 95,000 jobs - about 4.1% of all jobs - could be lost the public and private sectors in Scotland as a direct result of the public sector spending cuts. Only Northern Ireland, Wales and north-east will be worse off.

Across the UK, almost half a million private sector jobs could be lost.

The public sector spending cuts could reduce UK private sector gross output by around 46 billion a year by 2014/15.

Mr Brewer added: "It is critical that there is a robust return to growth and if we are to achieve this, the Scottish Government must be creative, decisive and leave no stone unturned. In short, there should be no sacred cows.

"If we are to truly secure financial, social and environmental sustainability for Scotland in the long term, we must make this as painless as possible while maximising any opportunities that lie ahead, for example in sectors where we have a competitive advantage such as financial services, renewable and life sciences."