Public sector job cuts are likely to hit three quarters of a million rather than the implied 490,000 over the next few years as the coalition government looks to completely restructure service provision in the UK, an HR body has warned.
The chancellor in his Comprehensive Spending Review (CSR) announcement said that planned real cuts in public expenditure would result in the loss of nearly half a million public sector positions by 2014-2015. But according to the Chartered Institute of Personnel and Development (CIPD), the figures are misleading, understating the full impact of the downsizing initiative.
John Philpott, the CIPD’s chief economic advisor, said: "What the CSR conveniently fails to mention is that the Office for Budget Responsibility’s complete forecast suggests a loss of 660,000 public sector jobs between 2010-2011 and 2015-2016. Unless the chancellor decides to reverse spending cuts pencilled in for 2015-2016, he should admit this will be the outcome, at least until the OBR publishes its next forecast on 29 November."
The CSR did not acknowledge the likelihood of very large percentage cuts in admin costs across Whitehall, local authorities and even ostensibly ring-fenced areas of spending such as the NHS, which would have a "disproportionately negative impact" on some of the most labour intensive parts of the public sector.
As a result, Philpott estimates that, if the coalition sticks to its existing longer-term spending plans, total job losses are likely to rise to some 725,000.
He acknowledged that, in theory, the toll on jobs could be reduced if, as the CSR recommends, public sector employers were to push for voluntary pay restraint or reduced working hours to cut payroll costs, which could lessen the need for redundancies.
But the problem with this scenario is the difference between "the role of pay restraint in the face of a cyclical downturn in demand and what makes sense when an organisation, or entire sector, is engaged in fundamental restructuring and long-term downsizing", Philpott warned.
As a result, if public sector bodies were expecting to maintain current levels of service provision and staffing in the long term, which would mean looking for short-run cost savings for a couple of years, it would make "perfect sense" to look at all possible alternatives to job cuts.
"But the objective of the coalition government is not only to cut costs but also, and primarily, to completely restructure the role of public sector provision in the UK. There is no suggestion in the CSR that expected public sector job downsizing will at some future point be reversed," Philpott said.
Therefore, because public sector organisations were expected to shed jobs on a permanent basis, which "probably describes the vast majority of the intended impact of the CSR", it made little sense for them to ask for pay restraint or introduce changes to working hours to "lessen the blow". It also made it unlikely that workers would be "prepared to make sacrifices since they can expect nothing in return", Philpott said.
