From the TUC

Public sector jobs under threat

24 Sep 2009, by in Economics, Public services

In the opening months of the recession, the public sector was relatively sheltered from job losses and this was frequently highlighted by right-wing newspapers calling for cuts: ‘sharing the pain’ was a common theme. If that is what they wanted, they must be very pleased with the turn events have been taking.

The University and College Union has revealed that 6,000 jobs in further and higher education are currently at risk – 45 universities and 55 colleges are cutting jobs now, 99 universities plan to cut jobs in the near future – 100,000 students could be affected.

Last month the Local Government Association showed that seven thousand council jobs had been lost in the previous six months. Local authorities claimed a £4bn income deficit compared with 2007, due to falling property prices and interest rates, making it likely that more redundancies would follow. Unsurprisingly, a survey by Active Health Partners found that the number of town hall working days lost due to depression, stress and tiredness this summer was 45% higher than it had been a year previously.

The National Council for Voluntary Organisations’ CEO, Stuart Etherington, has worried that voluntary organisations could be seen as a ‘soft target’ for cuts – 25,000 of them receive more than three quarter of their income from the state. This month it emerged that consultants McKinsey have advised the Government that planned efficiency savings in health of £20bn would require the loss of 10% of the workforce – 137,000 jobs – by 2014. The Chartered Institute of Personnel and Development has predicted that public sector job losses will accelerate just as private sector employment begins to stabilise.

A new TUC report has found that the impact of large public spending cuts would be worst in areas that already have high unemployment. In towns such as Liverpool, Middlesbrough and Leicester unemployment levels would rise more than 40%. Nationally, a 10% cut in jobs would cost 700,000 jobs, increasing claimant count unemployment by 45% and raising the total number of unemployed people (using the ILO measure) to over 3 million.

That is why, at TUC Congress, Brendan Barber warned that public spending cuts could cause a double-dip recession that would hit the private sector as well. Not only would jobless public sector staff have less money to spend, indirectly hitting the private sector, but public spending on the private sector would also face cuts. The state currently spends more on goods and services from the private sector than it does on public sector pay; a 10 per cent cut in public spending would take one per cent of GDP out of the private sector.

Watch this space – next month we’ll be publishing a new Touchstone pamphlet – Speaking up for Public Services: the Vital Role of the Public Sector in and Beyond the Recession.

One Response to Public sector jobs under threat

  1. Cameron’s ten pledges: the pretense is over, Thatcherism is back! | ToUChstone blog: A public policy blog from the TUC
    Oct 2nd 2009, 1:33 pm

    […] for two years – another measure which would risk accelerating the already rising number of job losses in local […]