Public sector job cuts of 500,000 probable, CIPD analysis warns

Half a million public sector jobs could be shed over the next five years as the new government begins to tackle the £167bn deficit – dwarfing any assessment the current political parties are willing to make, the CIPD has warned.

An analysis of the three main political party election manifestos by the Chartered Institute of Personnel and Development has found it is “probable” that the 5.8 million core public sector workforce will be reduced by 10% by 2015.

Chief economic adviser John Philpott said: “The CIPD estimates that the post-election squeeze on public spending will be far greater than any of the main political parties is at present prepared to admit.

“A 10% reduction in the 5.8 million core public sector workforce is probable, the prospect of 500,000 public sector jobs being shed in the next five years dwarfing anything implicit in the election manifestos.”

The latest unemployment figures by the Office for National Statistics are due out on Wednesday.

Philpott warned ministers that it was misleading to suggest that the volume of likely job losses in the public sector could be eased by a combination of pay cuts or short-time working.

“This strategy has been successful in the private sector during the recession as a means of avoiding redundancies during a cyclical downturn in the economy, but is not an effective response where long-term structural change is involved,” he said.

With almost 30 million people in work – in which tens of thousands of jobs are lost and created every year – the labour market should be able to cope with large-scale cuts in the public sector without job losses resulting in higher unemployment, Philpott added.

The Conservative plan to immediately cut £6bn in spending would threaten economic recovery, Philpott warned.

However, the CIPD advocated the Tory plan to reverse much of Labour’s planned National Insurance contributions hike in 2011.

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