Conservative spending plans ‘to accelerate public sector job cuts’

17 Jun 15

The pace of public sector job cuts is set to quicken to 2018/19, an analysis of government spending plans by the Institute for Fiscal Studies has found, with a projected workforce reduction of more than 500,000.

In a report published yesterday, the economic think-tank said the Conservative Party’s spending plans implied a further reduction in public sector employment of 580,000 between 2014/15 and 2018/19.

The fall has been calculated on the basis of the government not being able to impose further public pay restraint.

This would be a greater reduction in the public sector headcount than in the period from the start of 2010 to the end of 2014, when there was a reduction of 375,000, according to researchers.

During the last parliament, falls in employment were initially sharp, with a fall of around 210,000 posts (2.9%) between the second quarter of 2010 and the and second quarter of 2011. However after 2011, the pace of public workforce cuts slowed, which allowed almost all former public sector workers to be fully absorbed by the private sector, the Mobility of Public and Private Sector Workers report stated.

Overall, the reductions fell on unprotected areas of government spending, in particular public administration, including the civil service, local government and Jobcentre Plus.

Reductions have been smallest in the areas of protected spending, such as the NHS and schools spending.

The trend in the last government of public sector workers being able to move to the private sector would need to continue to prevent former public workers spending a significant amount time out of work, IFS programme director Luke Sibieta said.

Sibieta, an author of the report, said the fact that about 5% of public sector workers in 2013 moved to the private sector, the highest level since the early 1990s, was encouraging.
“With the pace of workforce cuts set to accelerate in the coming years, the capacity of the private sector to absorb former public sector workers will need to increase further to prevent them spending a significant amount of time out of work,” he added.

The IFS report comes as latest figures from the Office for National Statistics published the latest public sector employment figures. In the first three months of 2015, there were around 5.4 million people working in the public sector, down 22,000 from the last three months on 2014.

This fall was accounted for by a 23,000 reduction in the local government workforce, to stand at nearly 2.3 million, while central government employment was also down, by 2,000, to 2.9 million. But the number of people working for public sector corporations increased by 3,000 over the three months.

Over the last year, public sector employment has fallen by 59,000, and it remains at the lowest level on a headcount basis since comparable records began in 1999.

Today’s figures for total unemployment, which cover the three months to April, showed the unemployment rate was 5.5%, lower than the three months to January, when it stood at 5.7%, and compared to the same period a year earlier (6.6%).

In total, there were 1.81 million unemployed people in the three months, 43,000 fewer than for the 3 months to January 2015 and 349,000 fewer than for a year earlier.

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