Delay public sector job cuts to stimulate growth, says CIPD

The Government should temporarily halt public sector job cuts in order to stimulate growth and tackle rising unemployment rates, the Chartered Institute of Personnel and Development (CIPD) has claimed.

According to a report published today by the CIPD, public sector job losses in the first quarter of the current financial year were five times greater than the figures projected by the Office for Budget Responsibility (OBR) for the whole 12-month period.

Figures from the Office for National Statistics show that the number of people employed in the public sector fell by 111,000 in the three months to June, the largest drop since records began.

In addition, the CIPD’s report, “Public sector job cuts revisited”, predicted that more than 600,000 public sector jobs would be cut between 2010-11 and 2015-16, one-third more than ministers had predicted.

The report argues that the Chancellor should announce plans to temporarily halt further cuts in the public sector in order to encourage growth and address rising unemployment.

Dr John Philpott, chief economic adviser at the CIPD, commented: “With the economy and labour market in such a fragile condition, it is worrying that public sector job losses are turning out to be much greater than ministers have previously been suggesting.

“Public sector job cuts in this context are a false economy, adding to unemployment and, in turn, hindering rather than helping the task of fiscal deficit reduction.”

He added that a “more sensible course” for the Government’s growth plans would be to delay public sector job cuts to the end of this Parliament and, if necessary, to the next, to enable the labour market to absorb them more easily.

A Treasury spokesman said the cuts were an essential part of the Government’s deficit reduction plan and vital in ensuring sustainable growth.

“Half a million private sector jobs were created last year and the independent Office for Budget Responsibility has forecast that there will be 900,000 more jobs created in the private sector than lost in the public sector by 2015,” the spokesman commented.

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