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CIPD/KPMG report indicates almost one in three public-sector employers plan to cut jobs

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Almost one in three public-sector employers plan to shed jobs this quarter according to a CIPD/KPMG report, but slashing public-sector jobs would hinder Britain's economic recovery, Unite has claimed.

The survey, conducted by IPSOS Mori, indicates no overall return to growth in sight for the jobs market. Redundancies look set to almost double this quarter, compared with the final quarter of 2009, among those employers that plan to make redundancies. 

Employers from all sectors plan to cut 6.2% of their workforce in the first quarter of 2010, compared with 3.8% in the previous quarter.  Almost a third of public-sector employers plan to reduce headcount in the first quarter of 2010.

And despite signs that some private-sector employers are emerging from the recession with intentions to increase staff levels, the overall net balance between the percentage of employers expecting to recruit and those expecting to cut staff across all sectors of the economy is still negative (-5%). This represents a fall from -3% in the previous quarter.

The findings show this negative growth is almost wholly down to a bleak quarter ahead for the public sector, which recorded -31% (down from -13% in the previous quarter).  The public administration and defence sector looks set to be hit particularly hard (-62%). This compares with more positive feedback from the private sector (+5%), which will see staff numbers grow for the first time since the start of the recession. Prospects for private-sector services (+12%) will continue to improve, with manufacturing and production still struggling  (-4%).

This divide extends also to pay prospects, with the private sector predicting a rise of 2% compared with less than 1% (0.9%) for the public sector at the next pay award. The average basic increase at the next pay award is predicted to be 1.5% on average.

John Philpott, chief economic adviser at the CIPD, said: "The UK jobs market is still on the ropes, with a public sector fall in employment now a reality as it feels the impact of the longest recession in modern times. Despite the jobs market proving resilient in recent months, this represents a mere pause for breath with the number of redundancies easing in the private sector and spending cuts yet to be felt by large swathes of the public sector.

"Unfortunately, there are more testing rounds ahead.  Alongside the spectre of deep public-spending cuts, the private sector will be dealing with ongoing concerns about productivity, wage costs and inflation.  With many private-sector companies looking to move jobs abroad in an attempt to find the right balance between skills, quality and cost reduction, the jobs market needs all the continued support and protection it is getting from the Government."

But Unite said that the public sector was ‘integral' to recovery, as the CIPD predicted that defence and administration in the public sector would be particularly hard hit.

Gail Cartmail, Unite assistant general secretary for the public sector, said: "Public services and their staff are integral to the UK's recovery from the global recession caused by reckless banking practices.

"Organisations, such as Oxfam, and numerous leading economists caution against cutting public services, as they view recovery as being reliant on the stimulus and support public expenditure provides.

"According to TUC analysis, a 10% cut in public-sector expenditure equates to 200,000 jobs.

"In cities, such as Newcastle where two thirds of the economically active are employed in the public sector, the impact of such cuts would be devastating to the local economy -reduced taxation, reduced spending and, ironically, greater reliance on public services such as job centres and increased government expenditure on supporting the unemployed and their families."