Job cuts to soar again - with public sector hardest hit

Bad news for civil servants: the CIPD says public sector jobs are (predictably) about to get hammered...

Last Updated: 31 Aug 2010

When there was a surprise fall in unemployment at the end of last month, we couldn’t help feeling it would turn out to be a false dawn. And a new report from the Chartered Institute of Personnel and Development certainly suggests as much: according to the latest CIPD/ KPMG research, redundancies are set to accelerate during the first three months of 2010. The findings are particularly bad news for workers in the public sector, where a third of employers are apparently planning job cuts. With more budget-trimming inevitable in the next few years, this is surely a sign of things to come...

The CIPD survey suggests that the jobs outlook for the current quarter is pretty grim. The number of companies planning redundancies continues to outstrip those planning to recruit – and they’re expecting to make twice as many people redundant this quarter as they did last quarter. All of which suggests that despite things perking up a bit in the private sector, the unemployment figure is only going in one direction: upwards. Equally, staff who do keep their jobs shouldn’t expect a bumper pay rise any time soon; while private sector pay is forecast to rise by 2%, public sector employees will fare even worse, with an average basic increase of just 0.9%.

Unfortunately for civil servants, this may just be the beginning. We already know that with the budget deficit spiralling upwards, whoever’s in Government will need to put a serious squeeze on public spending. Some areas (like health and education) may escape the worst, but every other department will be forced into painful cuts. This will probably mean public sector employment deteriorates even as private sector jobs recover. Hence why the CIPD’s John Philpott believes the recent signs of life will be short-lived: ‘Despite the jobs market proving resilient in recent months, while the number of redundancies has eased in the private sector and cuts yet to be felt in the public sector, this represents a mere pause for breath,’ he doom-mongered today.

Still, perhaps we should be grateful for small mercies. According to the Centre for Economic and Business Research, a think tank, there would be twice as many people in the dole queue if Tony Blair had signed the UK up to the euro back in the day. While growth may have been slightly stronger between 1998 and 2006 if we’d joined the eurozone, things could have been much worse post-crash – the CEBR reckons GDP would have fallen by 7% instead of 5%, and unemployment would be nearer 15% than 8%. A scary prospect - although it may not be be much consolation within Whitehall today.

In today's bulletin:

Job cuts to soar again - with public sector hardest hit
UK firms: Raise VAT to cut deficit, not NICs
RBS hobbled by its largest shareholder?
The Sharp End: Cobblers to the gentry
MT Expert's Ten Top Tips: Act your way to the top

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