From the TUC

OBR analysis: Are public sector corporations excluded?

12 Jul 2010, by in Economics, Labour market

The OBR Budget forecast shows ‘general Government employment’ falling from 5.53 million at the end of this financial year (March 2011) to 5.04 million by March 2015. As has been reported elsewhere, this is a fall of 490,000. But ‘general government employment’, as defined by the Office for National Statistics, includes employment levels in local and central government only. At the moment the most recent figures for public sector employment (March 2010) show 6.09 million people in work in the public sector. This is because the total figure includes public corporations, where 555,000 people are employed (Q1 2010). But these people seem to have been left out of the OBR analysis.

Public corporations do include nationalised banks – and at the end of 2008 total employment in public corporations increased by 229,000, suggesting this is an approximation of the number of bank employees who are accounted in this figure. But even if these people are excluded, this leaves around 326,000 other employees at least some of whom will be in jobs directly funded by the public sector.

ONS provide the following definition of a public corporation: “Public corporations are companies or quasi-corporations controlled by government. Examples include Royal Mail and London Underground Ltd. These companies receive more than half their income from sales of goods or services into the market place.” And a full list of public corporations is provided by the Treasury on page 109 of its Public Sector Expenditure Analysis. This shows that public corporations in reciept of Government funds include Ordnance Survey, the Land Registry, BBC World Service, British Waterways, London Underground and the Defence Science and Technology Laboratory.

It does seem conceivable that employees in these organisations will also be hit by funding cuts, particularly if they receive close to 50 per cent of their funding from Government. Specifically, Transport for London is reportedly already facing a significant reduction in its grant, and British Waterways has recently issued a press release stating that “waterways will undoubtedly have to shoulder their share of government spending cuts which can only exacerbate the funding shortfall that currently exists across the waterways in England and Wales.” It has also been reported that BBC Monitoring – which is funded by the BBC World Service – may be facing closure, which would lead to the loss of several hundred jobs.

While The Guardian have been informed that employees of public corporations are not included in the general government figures, it could be that any job losses in these areas have been included in the OBR’s analysis of how many private sector jobs will be lost by forthcoming spending cuts (an analysis that is yet to be made public). However, to date our enquiries to the OBR as to whether or not this is the case have gone unanswered.

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