Up to 40,000 public sector jobs could go in 2010-11 under the Conservatives

Up to 40,000 public sector jobs could be lost under the Conservatives in a bid to save up to £2bn on recruitment costs in the first year after the election.

Peter Gershon, efficiency adviser to the Tories, has told the party leader David Cameron that the money could be saved on public sector recruitment to help create the £12bn savings needed.

He told the Financial Times that controls on public sector recruitment would include “driving down the use of agency and contract staff” and not filling empty posts, which would save “perhaps £1bn to £2bn” in 2010-11.

Colin Talbot, professor of public management at Manchester Business School, said the savings on the public sector payroll translated into “roughly 20,000 to 40,000 job losses”, based on an estimate that each job costs an average of £50,000.

But the Conservatives have denied that the efficiencies could lead to the loss of up to 40,000 jobs. The party said the savings were based on a hiring freeze, not job cuts.

David Willetts, the shadow skills secretary, told the BBC: “We are not talking about compulsory redundancies. What we are focusing on is a recruitment freeze. We have made that clear throughout.”

Gershon also revealed cuts to “discretionary” spending, including consultants and staff expenses, should save a further £2.5bn for 2010-11.

He added: “The areas that I’ve identified are additional to what the government set out in the Budget and, with focus, they are achievable.”

Of the £12bn savings to be achieved from government waste over the next year, half will be re-spent by government departments, but the other £6bn will be used to negate the need for a National Insurance rise.

But chancellor Alistair Darling criticised the Conservatives’ plans to reduced spending, the Daily Telegraph reported.

He said: “It is not credible because of their £12bn additional savings. Most are already being delivered, counted and banked, and you cannot spend money twice.”

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