Latest Public Sector News

07.02.13

1.2 million job cuts expected in public sector – IFS

Public sector job losses could rise above a million by 2018, the Institute for Fiscal Studies (IFS) has warned in its Green Budget.

Analysis of the Government’s spending plans suggest that losses are set to be 300,000 higher than currently predicted by the Office for Budget Responsibility (OBR). The IFS has found that Whitehall departments are cutting jobs faster than the OBR has forecast.

Between 2010 and 2012, the number of people employed in the public sector fell by 300,000, or 5% of the overall workforce. If the cuts continue at this rate beyond 2014/15, public sector employment will be 1.2 million lower by March 2018.

The IFS also reported that UK borrowing could be £64bn more than forecast.

Paul Johnson, IFS director, said: “As economic performance and forecasts have worsened the Chancellor has followed a dual strategy. He is allowing borrowing to increase substantially in this parliament – allowing the automatic stabilisers to work – whilst promising another dramatic dose of public spending cuts in the next parliament. The effects of concentrating all those cuts on currently unprotected areas of public service spending look hard to contemplate.

“A more likely scenario perhaps is that other choices will be made after the next election. Taxes could rise, hitherto protected elements of public spending, like the NHS and pensions, could be hit, or the date at which we reach fiscal balance will be pushed further out.”

A Treasury spokesman told the BBC: “As the Institute for Fiscal Studies shows, the government continues to tackle the deficit in a way that ensures those with the broadest shoulders bear the heaviest burden.

“The IFS points out tax and benefit changes since the beginning of the Parliament will 'hit the richest households hardest', and changes this April will benefit working households.”

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