Latest Public Sector News

04.12.14

OBR warns a million public sector jobs will be lost by 2019

A million more public sector jobs will be lost during the next Parliament, according to a new report from the Office of Budget Responsibility (OBR).

The government has already reduced the number of public sector workers by almost a fifth (250,000) from 2011 to mid-2014, but the latest set of forecasts from the OBR predicts this is just the start.

The warning comes in the Treasury spending watchdog’s latest Economic and Fiscal Outlook, published in response to the chancellors Autumn Statement.

The report says: “Over the course of the next parliament, we project that government employment will fall by 1.0 million, compared to the 0.4 million decline that we are likely to have seen over this parliament.”

It blames the fall on Osborne’s plan to cut public spending to levels not seen since the 1930s. The OBR says spending on public services as a share of gross domestic product is set to fall by considerably more over the next five years than it did over the last five years. The OBR says that spending in non-protected departments will fall from £147bn in 2014-15 to £86bn in 2019-20 – on top of all the cuts to spending in recent years.

“Total public spending is now projected to fall to 35.2% of GDP by 2019-20, taking it below the previous post-war lows reached in 1957-8 and 1999-2000 to what would probably be its lowest level in 80 years,” the report says.

The projected spending cuts will see public spending per head cut by a third during the 2010-2020 decade. The OBR says that it could require cuts in non-protected departments such as police, local government and justice amounting to a further £60bn by 2019-20.

The pain for public sector workers will not be just confined to job losses. Osborne said in the statement that the stringent restrictions on public sector pay over the past four years – with salaries frozen for two years since 2010 and subsequent rises of 1% – had saved £12bn and he expected to deliver similar savings in the next parliament.

Responding to the Autumn Statement Mark Serwotka, general secretary of the Public and Commercial Services Union (PCS), said: "The legacy of this government's obsession with austerity is a broken economy where low pay and insecure work are rife, meaning we have economic growth but falling living standards and rising employment but falling tax revenues.

"Instead of targeting low-paying employers, ministers have fuelled a deeply unpleasant and dangerous hate campaign against migrants and people who rely social security, blaming the least culpable for the government's failures."

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