Public sector cuts must wait until private sector jobs market recovers, says The Work Foundation

The coalition government has been urged not to cut public sector jobs until the private sector jobs market recovers, amid fears the move would be counterproductive.

The government is expected to cut around 500,000 jobs in the next five years as it tackles the deficit, but The Work Foundation has insisted a growth strategy based on expanding private sector jobs in all regions and countries should be the first priority. Only then, when the private sector is able to take up the slack, should public sector cuts be considered, it argued.

Ian Brinkley, director of the knowledge economy programme at The Work Foundation, said: “Much of the public debate and discussion has been on reducing the deficit through public spending cuts and tax rises. However, any successful deficit reduction strategy must encourage growth and jobs, and this has so far received little attention in the public debate.”

In its latest policy document Cut, Tax, Grow?, the foundation recommends the government “nurtures and supports” innovation and entrepreneurship in the four sectors likely to provide many future jobs: manu-services, the low carbon economy, the creative and cultural industries, and high-tech and business services.

Attention should also be paid to ensuring public-sector-dependent regions cut their spending in a way that does not destabilise their private sector and local economy, the think-tank said.

Brinkley told Personnel Today that public sector HR departments can learn a lot from the approaches adopted by the private sector during the recession – echoing a call made by the CBI last month.

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“One of the striking things is the way the private sector has avoided job losses, using different methods such as hours and wage flexibility, allowing people to take more unpaid leave and sabbaticals, and people wanting to drop from full- to part-time for a while. There are lots of things you can do around the edges,” he said.

“If cuts do have to be made, it’s how those are handled without destroying the morale of the people left.”