14 February 2010
Redundancies are set to increase sharply in the first part of this year as public sector cuts begin to take effect, according to a survey of employers out today.
Labour Market Outlook reveals stark differences between the public and private sectors, with the public sector set to suffer most from redundancies and depressed wages. The quarterly survey, carried out by the Chartered Institute of Personnel & Development and KPMG consultancy, covered 750 employers, of which 31% were public sector organisations.
Two-thirds of the public sector employers would be reducing their workforces in the first quarter of 2011, the survey found. But the private sector would continue to generate new jobs, mainly in the manufacturing and services sectors.
Redundancy intentions were the highest in the public sector, with 52% of employers planning to lay people off in the first three months of the year. More than three-quarters (77%) of local government plan to cut their workforce.
Gerwyn Davies, public policy adviser at the CIPD, said: ‘The first quarter of 2011 was always going to be a quarter of reckoning for the jobs market, and it seems that last year’s modest recovery will be reversed by a modest relapse this year.
‘While private sector jobs generation is encouraging, it’s more important that ever that the government continues its growth efforts in the private sector so as to offset the jobs gloom in the public sector.’
Malcolm Edge, head of markets at KPMG, added that the figures a continued ‘marked divide in the UK jobs market, with the public sector still fearing the worst while the private sector shows signs of better health’.
Wages are also going to be depressed, the survey found.
Average pay settlements in the public sector are expected to fall to –0.33%
compared with 2.3% in the private sector.
Meanwhile, the GMB union published figures showing that almost 163,000 jobs are under threat at 290 councils and authorities across Britain. In most of these councils, a 90-day statutory consultation on redundancies is under way.
GMB general secretary Paul Kenny said: ‘The government is deliberately creating unemployment on a scale that we have not seen before... The private sector is not to going to create enough new jobs to make up for these public sector job losses.’
