Public sector job prospects bleak while private sector grows

Job prospects in the private sector look set to grow but the picture is bleak for the public sector, latest figures show.

According to the Chartered Institute of Personnel and Development (CIPD)/KPMG Labour Market Outlook survey, carried out in March, private sector employers are optimistic about creating jobs over the next three months.

But their public sector counterparts are ‘radically more pessimistic’ about employment intentions compared with three months ago.

The quarterly report found the percentage of employers expecting to recruit and those expecting to cut staff across all sectors of the economy is now positive at +5% – the first time since winter 2008 and an increase from -5% in the previous quarter.

However, the growth is largely due to a sharp rebound in the private sector, which recorded +29% – up from +5% in the previous quarter. In stark contrast, the public sector recorded a net balance of -43%, the largest negative balance since the survey began in 2004.

Falls in employment are widely anticipated among local authorities and central government (-59%), in education (-45%) and in healthcare (-38%), the survey said.

Gerwyn Davies, CIPD public policy adviser and report author, said: “Public sector employers will be looking to close the lid on employment, pay and promotion. This will represent huge challenges to public sector managers in their attempt to keep employees engaged: particularly if the cost of living continues to rise.”

Alan Downey, head of public sector at KPMG, added it had been clear for some time that the steady increase in public sector jobs would have to come to an end. “Just three months ago, public sector employers were relatively optimistic and many were continuing to recruit. Now they are massively more pessimistic than their private sector counterparts about job prospects, with more than 40% contemplating a reduction in headcount and a significant number planning a pay freeze.”

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The report also flagged up a divide in job growth prospects between UK regions, with London and the South East leading the way at +21% from -3%. However, employment looks set to continue to fall in areas such as Scotland (-25%) and Wales (-23%).

The Labour Market Outlook survey, published in November 2009, revealed the era of redundancies had eased but cautioned the UK jobs market was no closer to returning to proper health.