It seems that public sector employers have finally woken up to the scale of the financial challenge that is coming their way.
The latest Labour Market Outlook Survey from KPMG and the Chartered Institute for Personnel & Development shows that the UK’s gradual emergence from recession is starting to lead to better job prospects in the private sector. However, this is in stark contrast to the public sector, where pessimism about job prospects is the order of the day.
It has been clear for some time that the steady increase in public sector jobs would have to come to an end. So the change of mind is not in itself a surprise. What is surprising is the speed and extent of the U-turn in attitudes.
Just three months ago public sector employers were relatively optimistic and many were continuing to recruit. Now they are massively more pessimistic than their private sector counterparts about job prospects, with more than 40% contemplating a reduction in headcount and a significant number (17%) planning a pay freeze.
For many months, independent commentators have been pointing to the size of the hole in our public finances and commenting on the reluctance of politicians and public servants to address it. It seems that finally the penny is beginning to drop.
It is now clear that the chill wind of the recession has reached the public sector with a vengeance.
Alan Downey is head of public sector at KPMG
