Massive Job Losses expected in Public Sector

Spartacus_Mills

The public sector is facing “job losses across the board” in the wake of sweeping spending cuts, local government leaders have been told.

Local authorities will have to set “a very tough agenda for very tough times,” Gillian Hibberd, president of the Public Sector People Managers Association, told delegates at a Local Government Workforce Leaders conference yesterday.

“We are entering an era of unprecedented levels of public-sector cuts. Most local authorities in England are planning for budget gaps of between 20 and 30 per cent. This represents a massive reduction in capacity, probably on a scale none of us in local government have experienced before,” Hibberd said.

The Institute of Fiscal Studies has estimated the public sector will have its budget slashed by £36 billion from 2011, following the chancellor’s pre-budget report on Wednesday. Alistair Darling also confirmed public-sector pay increases would be capped at one per cent for two years, while Gordon Brown announced a 20 per cent cut in the senior civil service pay bill earlier this week.

Hibberd, also head of HR at Buckinghamshire County Council, said senior management roles were most likely to be culled, as local authorities were forced to redesign their organisation models and cut bureaucracy in the workforce. She also predicted that the sector would see an increase in outsourcing and shared services.

But local job markets could be plunged into crisis if council jobs are axed, as many regions are reliant on local authorities as a major employer, the conference heard.

“Council jobs often account for five to fifteen per cent of employment in a council area and can be a key employment area for women who work part time,” said Tracey Dennison, managing director of HR at the Audit Commission. “The loss of local government jobs will have an effect on local labour markets.”

She added that, conversely, the pressure on public services would be greater during an economic downturn, at a time when public sector budgets were stretched and front line jobs would be cut.

“Historically, in a recession there is a higher level of demand for housing, social care and benefits. People rely on public services in a greater way – particularly those who are vulnerable,” Dennison said.

This obviously cannot be good news for unemployment especially when we appeared to have weathered the worst of it and it will have an impact on the recovery as well as housing and house prices.

Less people in work but doing more to cover for those who have been released.

Mind you this has been the way in the private sector in all the time I have been in it.

Generali

In parts of the North East of England (as I have been banging on about for a while) 70% of GDP comes from Government spending. They are going to feel very real pain as Government spending is cut.

amcluesent

Canny public-sector managers will have seen this coming for 18 months. Their unit's 'establishment' headcount will have 25% vacancies, so 'cuts' mean nothing more than deleting some boxes on a powerpoint and they can then report headcount is down.

Even then, managers will use more contract staff so they don't appear on HR's lists.

kennyboy66_2

Generali wrote: »

In parts of the North East of England (as I have been banging on about for a while) 70% of GDP comes from Government spending. They are going to feel very real pain as Government spending is cut.

Perhaps the real radical idea from the Conservatives will be to scrap national payscales for the likes of Education and Health.

(you could say the same thing about the national minimum wage).

The CEBR did a report on this a few months ago and pointed out that government spending in Cuba as % of GDP is expected to fall to 60% in the next year or so.

Yes Cuba !

olly300

amcluesent wrote: »

Even then, managers will use more contract staff so they don't appear on HR's lists.

In many London boroughs they do that already. Staff have been employed for years via agencies.

Old_Slaphead

amcluesent wrote: »

Even then, managers will use more contract staff so they don't appear on HR's lists.

It's the topline budgets that are being cut back of which approx, 50% is total expenditure on staff costs. The reductions cannot be circumvented by changing staff from inhouse to contract - only other 'efficiency' savings will help ameliorate a reduction in FTE headcount.
My friend in LG finance has been told to plan for 10% overall cost reductions in 2010 and 2011.

carolt

olly300 wrote: »

In many London boroughs they do that already. Staff have been employed for years via agencies.

Totally. And, ironically, it's actually more expensive. And the workers get paid less.

But the agencies in the middle are creaming it, so that's alright in wonderful Nu Labour land!

Not that the Tories wouln't be more than happy with that particular bit of the status quo.

HammerSmashedFace

A lot of people seem to think the worst is behind us (Autumn 2007-2008), they are very likely to be wrong, the worst is almost certainly in front of us. Imagine this scenario....

In Autumn 2007, an individual as finally ran out of easy credit that they have been basing their lifestyle on for over 7 years. Over the next 18 months they do cut back and cut back, but it's too late, they are going under, then at the last minute they find another credit card with nothing on it and a 10k limit. They are saved (phew!), they then return to their spending way of life......the card though now is reaching it's limit and when that one is out, they are going down.

The individual in my scenario is the UK. My betting is QE will have to be maintained now indefintely, without it, we either default or IR's will have to rise to around 6%+ within a few months, devastating the housing market.

abaxas

My OH works in the public sector, in a department that is designed to cut other depts buying costs.

I'm expecting her to be the first to go :P

Old_Slaphead

carolt wrote: »

Totally. And, ironically, it's actually more expensive. And the workers get paid less.

But the agencies in the middle are creaming it, so that's alright in wonderful Nu Labour land!

Not that the Tories wouln't be more than happy with that particular bit of the status quo.

Why aren't these sourced via the jobcentre ?

Why let the agencies "cream it". Is the jobcentre is too inefficient to compete?

HAMISH_MCTAVISH

The public sector is nothing but a giant parasite in the intestines of the wealth creating private sector.

It has now grown so large and so hungry for resources, it is in danger of killing off the host.

A massive public sector jobs cull, spending cuts, and benefits reductions to a strict time limit of 4 years per person per lifetime, (obviously excluding the genuinely severely disabled) would be a price worth paying for a house price crash.