Recession recovery by public sector will take longer than private firms

The public sector will continue to be hit by the recession many months after the private sector has recovered, a report has claimed.

A study by conciliation service Acas claimed that despite the private sector cutting the most jobs so far as a result of the credit crunch, the impact of the recession on public sector organisations was still to be felt.

April’s Budget showed spending on public services would be reduced this year, and local councils have admitted were are already suffering reduced income from business rates, the body said, which it predicted would lead to a major jobs cull across the sector.

Acas chairman Ed Sweeney warned that businesses needed to work harder to improve employee morale ahead of possible job cuts.

He said: “As the workplace responds to the pressures brought about by the downturn, it has never been more important to engage employees and maintain morale. Otherwise there is an increased risk of disputes arising.”

In April’s Budget, chancellor Alistair Darling said he would seek to claw back £15bn of costs from back-office functions by 2013-14, by speeding up the introduction of shared services, cutting an estimated 6,000 HR jobs.

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