Public sector could lose 200,000 jobs

16 Jul 09
The Trades Union Congress has warned of 200,000 future public sector job losses, as economists predict that £80bn would need to be slashed from spending to restore the public finances.
By Tash Shifrin

16 July 2009

The Trades Union Congress has warned of 200,000 future public sector job losses, as economists predict that £80bn would need to be slashed from spending to restore the public finances.

A TUC analysis of official spending figures found that public spending rose by £174.6bn between 1997/98 and 2007/08. This had increased public sector jobs by 572,000, with the extra investment focused on the NHS and education.

The analysis used the ratio between public spending increases and jobs growth to calculate that a future 10% cut in public spending – £58.27bn – would lead to around 200,000 public sector job losses.

But in a July 13 forecast, the Centre for Economics and Business Research predicted that the next government would need to claw back around £100bn to restore the fiscal deficit by 2014.

‘If the new government is Conservative, the forecasts suggest tax rises of £20bn and spending cuts of £80bn,’ the CEBR said. ‘If Labour is re-elected, the mix is more likely to be £40bn of tax rises and £60bn of spending cuts.’

TUC general secretary Brendan Barber said: ‘A mania has gripped otherwise sensible commentators, who are calling for deep cuts in public spending to reduce the budget deficit. They talk as if these cuts would have no effect on the private sector or the wider economy, and that health, education and frontline services would hardly notice. But this is a delusion.’

Cuts in public spending would ‘inevitably hit the private sector’, he said, arguing that the amount spent on goods and services from private companies was greater than the public sector pay bill.

Did you enjoy this article?

AddToAny

Top