UK jobs market: 'Bleak' outlook for public sector workers

Published by Jon Land for 24dash.com in Local Government and also in Communities

The number of job losses looks set to double as the outlook for employment worsens and cuts spread to the public sector, a gloomy new report predicted today.

A survey of over 700 employers also revealed a "substantial" fall in employment intentions among public sector organisations, marking a "difficult" first quarter of the year for jobs.

The Chartered Institute of Personnel and Development (CIPD) said the jobs market was still "on the ropes", with a number of concerns ahead, including more outsourcing of work.

The study showed there was overall return to growth in sight for jobs, with employers planning to cut their staff by over 6% in the current quarter.

More employers were planning to cut staff rather than hire new workers, and the outlook was particularly "bleak" in the public sector.

Public administration and defence will be particularly badly hit for jobs, it was warned.

John Philpott, chief economic adviser at the CIPD, said the UK jobs market was "still on the ropes" and the resilience of recent months "a mere pause for breath".

He warned there were "more testing rounds ahead", adding: "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."

The survey showed that one in 10 private firms planned to outsource jobs abroad this year to countries including India and those in Eastern Europe.

Alan Downey, head of public sector at KPMG, which helped with the research, added: "It is now only a matter of time before we are faced with the deepest and most prolonged cuts in public expenditure that anyone can remember.

"In fact, many public sector bodies have already started to feel the pain and are drawing up clear and radical plans to reduce costs."

He said alternative ways of cutting cuts than reducing the pay bill needed to be considered, including consolidating operations and "reconfiguring service delivery" to reduce costs while maintaining quality.

He said: "Some of this can be achieved quickly, but many of the changes that are needed will require careful planning.

"Plans need to be made now, so that the public sector is ready to respond immediately, whenever the incoming government decides it is time for the axe to fall."

The report was published ahead of new unemployment figures on Wednesday which will show that around 2.5 million people are out of work.

The CIPD report showed that one in four employers planned to make redundancies in the first three months of this year.

These employers, from all sectors of industry, planned to cut 6.2% of their workforce, compared with 3.8% in the previous quarter.

Almost a third of public sector employers planned to reduce headcount in the first quarter of 2010.

Shadow work and pensions secretary Theresa May said: "It's deeply worrying that there are a million people on part time work looking for full time jobs, a record eight million who are economically inactive and more than 900,000 young people out of work."

Employment minister Jim Knight said: "We are investing £5 billion to help people into jobs - opposed by the Tories. There are 450,000 fewer people currently unemployed than predicted in last year's budget and 70% of people leave unemployment benefit within six months."