Working in local government was once considered a rock solid, if unexciting, career. With a workforce of more than 2m, the public sector may often be a region’s largest employer. Now this could change. Council employment could drop as the recession deepens.

Local authorities claim that, far from escaping the recession, they have been trapped in a pincer movement of falling income and rapidly increasing demand for services. With few authorities willing to sacrifice public services, or significantly increase council tax, the latest industry surveys indicate that local councils could lose up to 40,000 jobs.

Victoria Price is an administrative manager for Essex County Council. She said she was deeply worried by the council’s controversial announcement that all public services could be outsourced to private companies, putting at risk more than 6,000 jobs. “I’ve worked here for 20 years and my husband works for the Royal Mail. I don’t know what to worry about first,” she said.

Price added that the council’s announcement had been met with disbelief. “It is unprecedented for a council to say that all its services might be outsourced. The purpose is cost cutting because the council says it wants to cut £200m from the budget over the next three years. Those cuts can only come from staffing. The companies left in the tender process are all foreign. Will they understand British values and carry over our terms and conditions?”

Essex County Council has confirmed that the proposal could result in some of the authority’s 39,000 jobs being sent overseas, with India’s Tata group one of the main bidders. The authority’s deputy chief executive Nick Bell said the Conservative-led council was “not ruling out any options”.

According to Price: “People in the office are very worried.

The council is a huge employer in this area. If we lose our jobs we will only be adding to the burden on the council, which could end up paying benefits to former staff. Added to that, this region has seen a much higher demand for council services because we have a lot of former City workers who have been hit by the credit crunch.”

A recent study by the Local Government Association confirmed that councils in southeast England have reported the highest level of job cuts, with 57% claming that some staff will be lost. Experts have blamed falling council income on a “double whammy” of a combined drop in interest from council investments, coupled with falling land sales as property development comes to a halt.

The public-sector trade union Unison argued, however, that council reserves have more than doubled in the past five years and that job cuts are a politically motivated response, rather than a financial necessity.

Unison’s regional officer for Essex, Kumar Sandy, said: “They say they are cutting fat, but we have already been through year-on-year efficiency savings, and we are cut to the bone. Essex County Council had £25m in reserves last year, and has now decided to raise council tax by only 1.9%. In some years councils have raised council tax by up to 11%. This is all about politics.”

While back-room and managerial staff like Price may well expect to see their jobs restructured, and even merged into larger teams that serve “shared authorities”, some fear the cuts will also affect frontline workers. Newcastle City Council has reported that it will cut 500 positions, with half of those in management. Aberdeen City Council has announced that many of its 385 redundancies will affect primary school assistants.

Jennifer Maddell is the manager of a children’s home in the Midlands that faces closure. “When the local authority said it was going to save money by closing one of our homes, the children became very upset and disturbed. These are young people who have already experienced a lot of disruption in their lives. For us as staff it is also unsettling. We have a challenging job managing the children through their education, arranging family contacts and meetings with key workers. Now we have the extra worry of wondering if we will lose our jobs and not be able to pay our mortgages. The council responded by telling us that it was going to allocate a room for us to lie down in if we were feeling stressed.”

Karen Ellis works for the same authority, driving old people to a local day centre. “I’ve had old people in the bus crying because the day-care centre is closing and they will have nowhere to go. Some said they would rather be dead. Personally, I don’t know what I’m going to do now. I’ve always worked in the voluntary sector, and I like working with the elderly. I am 59 and most of my colleagues are women in their fifties. Who will want to give us jobs? We are on the scrap-heap.”

Women like Ellis are in the most perilous position, according to Chris Game of the Institute of Local Government Studies at the University of Birming-ham. “The great bulwark of local-authority staff are low-paid middle-aged women, and they are going to suffer the most from these cuts.”

Game added that while previous threats of job cuts in local authorities had resulted in few actual redundancies, he had no doubt that this time the crisis was real – with three-quarters of local authorities saying they were revising their budgets in light of the recession.

“The public sector has got off lightly in comparison to the private sector, but it may not look that way in nine months. There’s been a remarkable set of circumstances that’s seen falling income, rising demand for services and councils choosing to set low council-tax rises. Jobs will be cut as a consequence. Those job losses are serious, but more so are the consequences for local democracy. A council is about more than providing cheap services, and these cuts are about the destruction of local government.”

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