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Government 'flying blind' on public sector cuts, says Work Foundation

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The Government is “flying blind” on the damage public sector workforce cuts could be doing to the labour market, a report from the Work Foundation concludes today.

In the wake of the West Coast Mail Line franchising fiasco and with the Coalition reaching the halfway point for its spending review, an in-depth analysis by the influential work think tank raises concerns about the impact of cuts on public sector skills, as seen in the recent events at the Department of Transport.

The Coalition is making cuts at a faster rate than the governments of either Margaret Thatcher or John Major. The Work Foundation report, Public Loss Private Gain, shows that under these previous two Conservative governments cuts fell on the public industries and administrative services. This time, if the Office for Budget Responsibility (OBR) forecasts of public job losses through to 2017 are correct, public sector employers will have to make significant reductions in priority service areas of education, health and social services and the police, on a scale not previously seen in the UK.

The report finds nearly one million who said they were employed in the public sector at the end of 2010 had left by the end of 2011, far more than can be accounted for by public sector job cuts. It reveals that the OBR’s attempts to forecast the cuts in the public sector on a year-by-year basis have been thwarted by the lack of workforce planning across the public sector as a whole, making it impossible to predict where and when the biggest cuts will fall.

Ian Brinkley, director of The Work Foundation, said: “The Government has some major blind spots around the impact of its public sector workforce cuts. These cuts are progressing at a rate not yet seen in the UK; however, the Government appears to have little knowledge of what this is doing to the labour market or the skills and experience of the public sector workforce. So far there has been little evidence it is driving significant changes in the way public services are being delivered, although recent events at the DfT could be indicative of a wider problem.”

The report finds that, although female workers make up the majority of job losses from the public sector, male public sector employment has fallen faster in percentage terms than female public sector employment to date.

It also concludes the expansion of the public sector under New Labour was not excessively large, compared to similar periods of expansion in other OECD economies. It shows that the UK has remained in the middle of the table for OECD economies for public sector employment.

“We would also like to see the public debate move on from some of the unhelpful rhetoric, “ added Brinkley.

“Our analysis shows that claims of a previously ‘bloated’ public sector and unsustainable job growth have been greatly exaggerated. Neither is there compelling evidence that a small public sector is essential for economic growth.”

The report calls for a more active role for the Cabinet Office and the Office for Manpower Economics in providing a regular public sector labour market picture. This would allow the Government and observers to identify the problems and make recommendations for public sector managers and policy-makers. It identifies particular blind spots over what happens to public sector workers who are made redundant and the impact on the regions.