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Budget crackdown could claim 725,000 public sector jobs
Economists have warned job losses could reach 725,000 as the public sector recession begins.
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Economists have warned job losses could reach 725,000 as the public sector recession begins.
Chancellor George Osborne said today that unprotected departmental budgets will be cut by 25% over the next four years – 5% higher than Labour originally planned. This is on top of a two year public sector pay freeze for public sector servants paid more than £21,000 and an investigation into public sector pensions, also announced in the emergency budget.
Jon Sibson, partner and head of government and public sectors at PricewaterhouseCoopers LLP, said the long-awaited public sector recession means staff numbers are bound to reduce and some services will inevitably be scrapped altogether.
Dr John Philpott, chief economist at the Chartered Institute of Personnel and Development, said that 725,000 jobs will be lost in public sector by 2015 as a result of the government’s plans to cut the deficit, pushing unemployment levels in the UK to three million by the end of 2012.
Dave Prentis, Unison’s general secretary, meanwhile has warned that a 25% cut in departmental public spending will ‘decimate our public services’. He said that throwing tens of thousands of public sector workers on the dole will cost the country billions in lost tax revenue as well as piling billions onto the benefits bill.
‘This would almost entirely cancel out the reduction in the pay bill, as well as dealing a massive blow to local economies and communities,’ he added.
However, George Osborne has announced plans to help those most affected by the cuts.
Firstly, anyone working in the public sector who is earning under £21,000 will get a flat pay rise of £250 in the next two years.
Meanwhile, to help create jobs in the private sector Osborne has also announced measures to boost entrepreneurship and reduce the tax bill for businesses.
Osborne said: ‘It is my deeply held belief that a genuine and long-lasting economic recovery must have its foundations in the private sector. That is where the jobs will come from – and we will do absolutely everything to support their creation’.
To help create businesses in the regions where the private sector is not nearly strong enough, Osborne has said anyone who sets up a new business outside London, the South East and the Eastern region in the next three years will be exempt from up to £5,000 of employer national insurance payments, for each of their first 10 employees hired.
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11 comments so far. Why not have your say?
S B
Jun 22, 2010 at 22:49
The headline should read "725,000 purchased Labour voters to be cut". After all, when the state employs people using money it is borrowing what else do you call them?
report thisIan
Jun 23, 2010 at 09:58
725,000 would be a good start with many more to go. I do not understand the logic of Dave Prentis saying that tax revenue will be lost as it cost billions at the beginning to retain these jobsworths and it will be cheaper to keeo them on the dole until they obtain real jobs.
report thisHarry
Jun 23, 2010 at 09:58
Dave Prentis is wrong - technically cuts of 10% would decimate our public services. This is actually 2.5 times worse than a decimation.
report thisBob
Jun 23, 2010 at 10:40
Okay - let's "centricate" the beggars.
report thisIan ?????
Jun 23, 2010 at 10:52
Lets face it---we used to run an Empire , without a computor or even a phone,
all things concidered did a fair job of it in the main, given 1 man and a dog +
pencil. Now look at this cancerous mess of parasites , who create bugger all
but a sea-anchor on anyone with a job out of government.
report thisSinic
Jun 23, 2010 at 10:58
Ian's maths is about as accurate as Alistair Darling's. There are approximately 7m public sector workers so the theoretical loss of 725,000 jobs is just about 10%.
The Adam Smith Institute suggest that 270,000 public sector jobs could go with no discernible impact on public services.
Perhaps public sector staff who retain their jobs should consider working a full week like most of the private sector, working until they are 65 to get a full pension like most of the private sector, and not expecting a copper bottomed gold plated pension paid for by the taxpayer, who at best will have to work until they are 68 and then retire into comparative poverty if they come from the private sector.
report thisSinic
Jun 23, 2010 at 11:01
Humble apologies to Ian, whose maths I am sure is excellent. I did of course mean Harry's maths!!!
report thisjohn
Jun 23, 2010 at 11:41
A good start , but the first priority should be to get them back to a 40 hr week and the same pensions as the rest of us.
report thisJon
Jun 23, 2010 at 12:54
Under the 13 years of Labour approximately 1m new public jobs were created. We managed to survive very well (or rather better) before all of these extras, suffered less red tape and restrictions on our lives.
So cutting 725,000 should not be a problem if it is done sensibly. For a start cut NHS "management" by 50% and get them making a positive and effective contribution towards patient care instead of have "very important meetings".
report thisRoger Savage
Jun 23, 2010 at 20:03
Some good comments above! The thing about those in public sector jobs is that they often seem to think they automatically *deserve* a job, even if it's a 'non-job' (e.g. those employed by pointless quangoes or the raft of hospital administrators) that doesn't provide any net benefit to anyone other than the state employee. They think they should be shielded from any pain suffered routinely by those in the private sector. How arrogant. Things really have shifted from those in the public sector serving the public to the public serving those in the public sector. Unacceptable and high time to get rid.
report thisBill
Jul 13, 2010 at 11:41
Clearly there is a need to reduce the number of jobs - but people above need to be careful - in the same way as the world economy is connected - in ways we don't always understand - the same is now true of the private and public sector. I have worked in it for over 20 years at very senior levels - about 50%-60% of budgets I have been responsible for (often £100's Millions) end up purchasing good and services from the private sector. I completly accept that there are big savings to be made -and should be made - but the sort of comments above are over simplistic and fail to understand the risks of massive cuts taking place very quickly - it is not just school children that will suffer from poor schools not being rebuilt - but it takes millions away from the private sector!
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