Weak economic growth means public sector job cuts should be delayed, if necessary beyond the next general election, the Chartered Institute of Personnel and Development has warned.
The institute said employment in the sector had fallen far faster than the government had predicted, with an insufficient compensating increase in private sector job creation.In a report published today, it warns that in the current economic climate the continued loss of posts on the scale seen in the past year ‘would be a false economy’.
The Public sector job cuts revisited report found almost 250,000 public sector jobs were lost in the year since the current government took office. In the April-June quarter of this year, five times more jobs were shed than had been predicted by the Office for Budget Responsibility for the entire year.
These figures implied a loss of 600,000 posts from the public sector in the 2011–2016 period, one-third more than ministers have said they expected.
Continued job losses would be ‘exacerbating weakness in the labour market, adding to unemployment and in turn hindering rather than helping the task of fiscal deficit reduction’, the institute said.
It added: ‘A more sensible course would be to delay all further public sector job cuts to the end of this Parliament and, if necessary, into the next, thereby enabling them to be more easily absorbed without nasty macroeconomic side-effects.’
Report author John Philpott, the CIPD’s chief economist, said: ‘With the economy and labour market in such a fragile condition, it is worrying that public sector job losses are turning out to be much greater than ministers have previously been suggesting.
‘The chancellor should also avoid the own goal of cutting public sector jobs at a time of high and rising unemployment.’
But the Treasury was unmoved by the CIPD’s warnings, insisting that public spending cuts would not be changed.
A spokeswoman said: ‘Risks in the global economy make it even more essential to stick to the Government’s deficit reduction plan.
‘Half a million private sector jobs were created last year and the independent Office for Budget Responsibility has forecast that there will be 900,000 more jobs created in the private sector than lost in the public sector by 2015.’
