Prebudget statement spending squeeze delivers blow to hopes for full employment

Chancellor Alistair Darling has been accused of damaging employment in both the public and private sector with his long-awaited comprehensive spending review.

Darling yesterday revealed the budgets each government department will have from April 2008 to April 2011. Total spending will grow by just 2.1% over the three years – with the Department for Work and Pensions (DWP) allocated funding that falls in real terms by 5% each year.

Economists and trade unions warned that this squeeze on public spending will lead to Whitehall job cuts as well as harming the government’s ambition to reach full employment.

John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD), said: “With the DWP easily the biggest loser in the spending review, the government will face an uphill struggle in making progress on its Public Service Agreement for jobs.”

The Public and Commercial Services Union (PCS) said the budget cuts heightened the likelihood of further industrial action. PCS members have already taken part in two one-day strikes over pay and privatisation in the civil service, and are currently voting on further action, with a result expected on 23 October.

Mark Serwotka, PCS general secretary, said: “Services are already being cut to the bone. These additional cuts will lead to 25,000 jobs going at Revenue and Customs by 2011 and puts at serious risk the government’s ability to deliver on key priorities.

“Sadly today’s announcement raises the spectre of more job cuts and heightens the possibility of further industrial action, unless civil service management and government sit down with the unions and properly negotiate over the key issues of jobs, pay and privatisation.”

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