CIPD calls for audit of public sector job cuts

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The Chartered Institute of Personnel and Development (CIPD) has called on the Government to publish a comprehensive audit of public sector job cuts, to ensure that they do not exceed the forecasts of the Office for Budget Responsibility (OBR).

John Philpott, CIPD chief economic adviser, says that a full audit of cuts between now and 2014-15 would clear up the apparent difference between OBR forecasts and independent estimates of the scale of cuts.

Philpott added that this would also help to assess the impact of public sector cuts on the labour market as a whole, and be invaluable in maximising the chances of success and effective targeting of the Government’s policies to boost growth and job creation.

Philpott said: “Since its initial June 2010 forecast, a combination of methodological changes and more precise projections for public spending and public pay has enabled the OBR to reduce its forecast for the total reduction in general government employment between 2010-11 and 2014-15 from 490,000 to 310,000. While substantial and obviously painful for those individuals, organisations and local areas directly affected, public sector job losses on this scale are unlikely to have a significant impact on the UK labour market overall.

“However, the OBR forecasts contradict many independent estimates of the emerging scale of public sector job reductions published by the CIPD and other employers’ organisations, trade unions and professional bodies covering public administration, local authorities and the education and health sectors. Such estimates not only point to a larger overall scale of employment reductions but also, and perhaps more significantly for the wider labour market, suggest much larger reductions than the OBR in the current and next financial years.

“The CIPD accepts the OBR’s modelling methodology as robust and has no desire to talk up the scale of public sector job cuts. But we agree with the OBR when it notes that its own approach is not ideal but merely the best available ‘until the Government obviates the need for a forecast by publishing specific workforce plans’.

“The CIPD therefore recommends that the Government should, at the earliest opportunity, publish a comprehensive administrative audit of public sector jobs cuts drawn from available figures on workforce reductions being currently planned and/or being implemented across the public sector. Ideally, this would include information on the various ways in which reductions are being undertaken, whether through compulsory or voluntary redundancies, recruitment freezes or natural turnover.

“There is a wide confidence interval between the wilder upper end of speculation on likely public sector job losses and the most optimistic end of the scale. A comprehensive audit of this kind would help close this gap, giving far greater clarity to ongoing debate about the scale and phasing of public sector job cuts and improving assessment of the possible impact on unemployment at national, regional and local levels.”

For more information, see XpertHR’s latest survey on public sector cuts.

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