From ”Distribution of Industry” to “Local Keynesianism”: The Growth of Public Sector Employment in Britain

A striking feature of British economic and political development in the recent past has been the huge increase in employment reliant on state funding, especially in the less prosperous parts of the country. In many cities, direct public employment provides 30–40 per cent of all work, and private sector employment has hardly grown at all in the last 10 years. Despite widespread claims about the predominance of ‘neo-liberalism’ in recent British policy making, the state now provides more employment directly and indirectly than ever before in peacetime. This policy of ‘local Keynesianism’ has not been the outcome of an articulated political programme, but rather has arisen from the combination of a national policy of seeking to expand welfare provision from the proceeds of economic growth, with the striking incapacity of the private sector to create employment across much of Britain.