When the public sector budgets start getting pruned, where does the effect actually get felt ? Yes, some jobs will go; at my Authority we are already looking into over 200 posts going in the next couple of months as the cuts already announced bite, and these will almost all be 'front line' jobs as the funding reduction cuts the grants that pay their wages. However, look at something like Building Schools for the Future - contracts with PRIVATE contractors have already been signed, and are now worthless; ContactPoint was being developed by PRIVATE IT consultancies, as was the ID card scheme. Councils and other public agencies spend huge amounts of money in contracting in services and supplies, all from the PRIVATE sector.
And as for the new 'free' schools, they are being funded in part by diverting £50 million from the Harnessing Technology Grant from existing school budgets.
And of course, given the projection of 300,000 public sector redundancies, these will all be competing in the jobs market with over 2 million already unemployed, and will have to be added to the welfare bill whilst they are looking for new employment.
This will affect everybody - unless you are a non-dom, have an offshore bank account, or can afford an expensive tax evasion lawyer.