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The side-effect of public cuts...
mvengemvenge
Posts: 599 Forumite
At least 2.3m private sector service jobs are at risk from looming cuts in public spending, according to an independent study of the size of the sector providing services to government.
The jobs are in big IT contracts, defence, training, construction, health, welfare-to-work, benefit and other administration, schools and waste management, social care, legal, property and other services, where outsourced providers supply government services but whose employees do not count on the government’s payroll.
Research by Oxford Economics, the consultancy, calculates that the public sector purchased almost £80bn of services from the private and voluntary sectors in 2007-08 – in addition to the £140bn it spends on the purchase of goods, from paperclips to hospital beds and tanks.
That £80bn of spending on services directly supports more than 1.2m jobs, the study found. A further 1.1m jobs depend on the supply chain to those companies and charities, researchers calculated, and from the spending of their employees more widely – in retail shops, restaurants and elsewhere.
Sam Moore, economist at Oxford Economics who undertook the study, said people tend to talk as though only public sector jobs will go.
“But there will undoubtedly be an impact in the private sector as well,” he said.
The number of jobs outsourced to the private sector is likely to have increased further since the study, he said.
The 2.3m figure is total private sector jobs now reliant on public service spending, he said.
“Not all public spending is about to stop,” Mr Moore said.
“But it is undoubtedly the case that there will be an impact on a proportion of these workers as public spending is reduced.
“If there is reduced demand from the public sector, there will be a real impact on these business and their jobs.”
There would also be an impact from cuts to capital spending on transport, hospitals and schools and other forms of infrastructure, Mr Moore said.
Even in advance of Tuesday’s emergency budget, Labour had already planned to halve capital expenditure between last year and 2013. Jobs will also be affected as the public sector cuts back on purchase of goods.
Almost a third of UK public services are now outsourced to the private sector, according to a 2008 review of the “public service industry” by the economist Deanne Julius.
Slightly more than 6m people work directly in the public sector, official figures suggest – but another 1.2m report themselves as working for it, according to the Labour Force Survey.
On Friday, the Work Foundation also warned that “public procurement of goods and services is a significant source of revenue for many private sector businesses”.
If cuts are not carefully managed the chances of new jobs and growth in private firms could be wrecked, it said.
http://www.ft.com/cms/s/0/5d2a8604-7b00-11df-8935-00144feabdc0.html
The jobs are in big IT contracts, defence, training, construction, health, welfare-to-work, benefit and other administration, schools and waste management, social care, legal, property and other services, where outsourced providers supply government services but whose employees do not count on the government’s payroll.
Research by Oxford Economics, the consultancy, calculates that the public sector purchased almost £80bn of services from the private and voluntary sectors in 2007-08 – in addition to the £140bn it spends on the purchase of goods, from paperclips to hospital beds and tanks.
That £80bn of spending on services directly supports more than 1.2m jobs, the study found. A further 1.1m jobs depend on the supply chain to those companies and charities, researchers calculated, and from the spending of their employees more widely – in retail shops, restaurants and elsewhere.
Sam Moore, economist at Oxford Economics who undertook the study, said people tend to talk as though only public sector jobs will go.
“But there will undoubtedly be an impact in the private sector as well,” he said.
The number of jobs outsourced to the private sector is likely to have increased further since the study, he said.
The 2.3m figure is total private sector jobs now reliant on public service spending, he said.
“Not all public spending is about to stop,” Mr Moore said.
“But it is undoubtedly the case that there will be an impact on a proportion of these workers as public spending is reduced.
“If there is reduced demand from the public sector, there will be a real impact on these business and their jobs.”
There would also be an impact from cuts to capital spending on transport, hospitals and schools and other forms of infrastructure, Mr Moore said.
Even in advance of Tuesday’s emergency budget, Labour had already planned to halve capital expenditure between last year and 2013. Jobs will also be affected as the public sector cuts back on purchase of goods.
Almost a third of UK public services are now outsourced to the private sector, according to a 2008 review of the “public service industry” by the economist Deanne Julius.
Slightly more than 6m people work directly in the public sector, official figures suggest – but another 1.2m report themselves as working for it, according to the Labour Force Survey.
On Friday, the Work Foundation also warned that “public procurement of goods and services is a significant source of revenue for many private sector businesses”.
If cuts are not carefully managed the chances of new jobs and growth in private firms could be wrecked, it said.
http://www.ft.com/cms/s/0/5d2a8604-7b00-11df-8935-00144feabdc0.html
Fokking Fokk!
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Comments
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I'm not sure how you could lose 2.3m jobs and 80bn of spending by making little over 6bn in cuts. The Government are looking to make cuts which equate to less than 0.5% of GDP. Lets not get carried away! They saved 10bn this month by not even trying.0
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I'm not sure how you could lose 2.3m jobs and 80bn of spending by making little over 6bn in cuts. The Government are looking to make cuts which equate to less than 0.5% of GDP. Lets not get carried away! They saved 10bn this month by not even trying.
They saved money by having tax receipts rise due to economic growth. Dump people on the dole and they stop spending money. That puts even more people on the dole and stop the growth. Which stops the tax receipts.0 -
I repeat, less than 0.5 of GDP in an economy with an annualised nominal GDP growth of 8%.0
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all these jobs are just public sector in all but name - so another plus really0
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Can I claim the dubious honour of being the first on this board that this applies to?
It may not have been a real job but it saved many times more govt expenditure than I cost.
'Luckily' as MaxHeadroom discovered if you are sensible and have savings then it doesn't cost the govt anything if you are unemployed so it looks like I need to blow a couple of hundred k in the next few weeks if I want to benefit from all the benefits - anyone up for helping me?!I think....0 -
Can I claim the dubious honour of being the first on this board that this applies to?
It may not have been a real job but it saved many times more govt expenditure than I cost.
'Luckily' as MaxHeadroom discovered if you are sensible and have savings then it doesn't cost the govt anything if you are unemployed so it looks like I need to blow a couple of hundred k in the next few weeks if I want to benefit from all the benefits - anyone up for helping me?!
Was it or was it not a real job? It might not have been a real job if it was just a Labour fill-in job to keep dole figures down + possibly helped you build up such high savings. Would you really prefer to spend fast through your savings and join the line to claim JSA?
Yet if you were being paid, you can still claim one part of JSA if you've been employed for a certain amount of time, if memory serves me correct.
I don't think your memory serves you correct over MaxHeadroom. He was gutted at his decision to delay claiming for 2 weeks after his final day at work, and very annoyed he couldn't get his claim backdated. From what I gathered he didn't have liquid savings of £100Ks+. Maybe £10K for what was implied imo.
I only work part-time, with a limited income for the moment, but have previously built up savings. Beyond contribution based JSA, income based JSA is a safety net, and not for people with £100K+ in savings accounts.
You sound peeved that you can't relax with £100Ks in savings and also have the juicy JSA rolling in on top (beyond the time-limited, think it is 6 months, contribution based JSA)
Thought you'd bought a house recently? That St.Albans one you were hot for at the time, or similar around there? You seemed to think it was great value?0 -
not really a real job - govt spends lots of money but finds it isn't really getting any benefit from doing so - I (plus colleagues) figure out how they can actually achieve what it was they hoped they would get by spending the money in the first place - I guess only a real job if you think what they wanted to acheive in the first place was worth the tax payers money it cost and the general consensus (which I share) is that a lot of what the govt has felt worthwhile of late was not worth the money.
Yes I have my house, savings could pay of the mortgage if needed. I guess my comments re benefits are that the term 'national insurance' makes it sound like insurance against redundancy, ill health etc but it turns out if you also make your own provision you can not claim.I think....0 -
The_White_Horse wrote: »all these jobs are just public sector in all but name - so another plus really
No, because a job is a job. It keeps a person off the streets, off the dole queue and doing something. You might question the value of such jobs, but they are still jobs.0 -
mvengemvenge wrote: »At least 2.3m private sector service jobs are at risk from looming cuts in public spending, according to an independent study of the size of the sector providing services to government.
The jobs are in big IT contracts, defence, training, construction, health, welfare-to-work, benefit and other administration, schools and waste management, social care, legal, property and other services, where outsourced providers supply government services but whose employees do not count on the government’s payroll.
http://www.ft.com/cms/s/0/5d2a8604-7b00-11df-8935-00144feabdc0.html
Very true. And this is why the government needs to think very carefully before ordering a massacre in the public sector. Despite what so many people on this board, and at large, seem to believe, the public and private sectors are very closely intertwined. The next few months will be extremely interesting.0 -
not really a real job - govt spends lots of money but finds it isn't really getting any benefit from doing so - I (plus colleagues) figure out how they can actually achieve what it was they hoped they would get by spending the money in the first place - I guess only a real job if you think what they wanted to acheive in the first place was worth the tax payers money it cost and the general consensus (which I share) is that a lot of what the govt has felt worthwhile of late was not worth the money.
Yes I have my house, savings could pay of the mortgage if needed. I guess my comments re benefits are that the term 'national insurance' makes it sound like insurance against redundancy, ill health etc but it turns out if you also make your own provision you can not claim.
I'm still uncertain about the 'real job'. You're describing it as not really a job, as your work didn't result in the efficiency savings and enhance value for money in the way you and colleagues would have liked.
Yet if you were being paid a salary, if it was actually a real job despite those setbacks, IIRC, if you've worked for a certain amount of time, uninterrupted, you can claim 6 months of contribution based JSA, no matter how much in savings you have. It is something like that, I'm pretty sure.
So that is a safety net of sorts, and insurance which pays a little back under sudden job loss, in some circumstances. If you're entitled to it, you should claim it, and not delay your claim as they rarely backdate it, according to a few threads I've read.
Also of course, whilst maybe not applicable to yourself, council tax reduction if on benefits + you can continue to claim NI contributions (I think), even after 6 month contribution JSA ended (if you've not secured a new job in that time). Apologies if I'm telling you something you already knew.How it works
There are two types of Jobseeker's Allowance, 'contribution-based Jobseeker's Allowance' and 'income-based Jobseeker's Allowance'.
Contribution-based Jobseeker's Allowance
Jobcentre Plus can pay this for up to 182 days. It’s based on how much National Insurance you have paid in the last two tax years. Generally, self-employed contributions will not help you qualify for contribution-based Jobseeker’s Allowance.
Income-based Jobseeker's Allowance
This is based on your income and savings. You may get this if you have not paid enough National Insurance contributions (NICs) (or you've only paid contributions for self-employment) and you're on a low income.
Please read 'National Insurance' for more information about National Insurance contributions.0
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