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Comprehensive Spending Review: 490,000 public-sector jobs likely to go

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The chancellor has confirmed 490,000 public-sector jobs will be lost over the next four years.

Speaking this afternoon George Osborne suggested this could partly be achieved through "natural turnover", but he said redundancies can’t be "avoided if the country has run out of money".

The cuts will come as part of a large-scale reform of the public sector in a bid to cut the country’s £109 billion budget deficit.

But Osborne also announced an increase of 75,000 adult apprenticeships each year until the end of the spending review.

Commenting on the announcement, Brian Wilkinson, executive board member at Randstad, said: "We expect many of those in the public sector that lose their jobs to be able to find employment in the private sector. We still expect the private sector to rebound faster than in the early 1990s because the UK economy is more service-based, has closer ties with the global economy and has a more mature recruitment agency sector. Private sector recruitment is already increasing in areas such as finance, HR and media.
 
"At the same time, Randstad is also seeing demand increasing in the public sector for people who can manage sizeable organisational change, such as those with financial expertise and high-end HR professionals that have the skills to rationalise and integrate teams, as well as those with TUPE experience who can support the potential externalisation of public services to the private sector."  

Stephen Menko, managing director of HR recruiter Ortus added: "These cuts haven’t come out of the blue - the writing’s been on the wall since before the Spending Review was finalised.  The government introduced a recruitment freeze last year and there has been an estimated 75% reduction in the recruitment of permanent staff year on year as a result.  Anyone working on an interim basis has also had plenty of warning and many have started explore other opportunities in the market place already.  Last year, the government took action to reduce the use of temporary, agency and interim staff and the latest figures show the total number has already fallen by an estimated 30%.  
 
"And the "scorched-earth fiscal policy," savage as it is, has been well-flagged.  That’s given HR professionals the chance to be involved in ground-breaking transformation and change - or to look at their own job prospects. Ipsos MORI suggests a drop in business as usual positions but a consistent push on project and programme management.  This same report indicates that HR is one of the most requested management roles."

But the public sector shake-up will localise power in the public sector as the chancellor suggested it would, for example, gives schools the right to reward their own teachers.

Jayne Carrington, managing director of Right Management, global talent and career management consultancy, added: "Today’s comprehensive spending review has confirmed what has been widely expected for some time that public services will be reshaped with the result of major job losses across the sector. It is a moment of transformational change and organisations that embrace this change and manage it well are more likely, not only to survive, but also to be regarded as pioneers and ‘thought-leaders’.

"To do this, leaders and managers should explore the future purpose of an organisation and review talent strategy. Revisiting the capabilities and competencies of staff needed to deliver ‘new look’ services, will mitigate the risk of a losing talent.

"While public sector organisations are skilled at managing change, there has not been much experience of large-scale redundancies. As many people will make the move from public to private sector, career transition support to help people identify transferable skills will be invaluable. Also, appreciating the significant emotional toll managing and facing the risk of redundancy can take, public sector employers could look to provide their staff with an Employee Assistance Programme (EAP). Talking to counsellors and qualified experts, unsurprisingly, reduces stress and absenteeism and can dramatically increase morale, engagement and productivity.

"Finally, strong and engaging leadership will be key to ensure the public sector continues to deliver an effective service during this challenging environment. Leaders who can communicate their vision for the organisation with clarity are going to be best placed to steer their organisations through these difficult times."