Up to 725,000 public sector jobs could be axed over the next five years – 225,000 more than previously feared, the Chartered Institute of Personnel and Development (CIPD) will warn today.
The CIPD previously predicted 500,000 government jobs could go by 2015, as the coalition attempts to reduce the £156bn budget deficit, but will now raise its forecast following revelations about how the government intends to create the savings.
The CIPD will also predict that plans to cut spending will stall any recovery in the jobs market later this year and will cause unemployment to reach 2.95 million by the second half of 2012.
The initial CIPD forecast of 500,000 job cuts was based on the prediction the government would address its debts using a 60:40 split between public spending cuts and tax rises.
But, in a speech later today, John Philpott, chief economic adviser at the CIPD, will say: “If as seems likely the coalition government adopts a split closer to 80:20, UK public sector jobs losses of around 725,000 are expected.”
Philpott told Personnel Today that HR jobs will feature prominently among the jobs to be axed because they would be seen as “a populist cut”, with Whitehall HR functions being specific “candidates for the chop”.
But he said: “It’s not inconceivable the affect on some parts of HR could be delayed because they will have to implement the initial phase of the cuts and then be cut themselves.”
He added “at least a third of the cuts could be in local government”, while quango staff would be heavily affected and the NHS would see many management and administrative positions going.
Philpott will add that private sector job creation in the 1990s recession enabled 800,000 public sector job cuts to be offset, but these conditions “do not exist as we enter the current age of austerity”.
“This time around, deficit reduction will slow an already anaemic recovery and in the short-run be bad for jobs in both the private and public sectors, stalling any hopes of a sustained improvement in job prospects this year and causing the labour market to relapse next year,” he will say.
Philpott will also warn that government plans to rely on public spending cuts rather than tax increases to create savings “makes the short-term outlook especially bleak” for those already struggling during the downturn.