Whenever a new player joins the club, he is always automatically given the lowest number available in your squad, so if #1 is available, a new player will get it.
Myself, I try to make my squad as much like real life as possible (not neccessarily in number positions), but I only use each number, once a season. I use squad numbers 1 - 30. At the start, I have 22 shirts allocated, and 8 empty. If, for instance, the #10 then leaves, I don't use that number again until next season.
LONDON CITY
Olympic Stadium...East London
Season 47...........Manager Level 33