16.09.15
Bleak future ahead for public sector as employment continues to crash
Public sector employment in the UK is at its lowest level since the start of data collection in 1999, figures released by the Office for National Statistics (ONS) revealed.
The data, released today (16 September), showed that the public sector staff pool crashed by 16,000 from the first to the second quarter of the year – its lowest level on a headcount basis.
Employment in local government was the hardest hit, falling by 13,000 to 2.270 million, which is also the lowest level since 1999.
Central government employment dropped by 1,000 and now stands at 2.909 million.
Public corporations are also taking in 2,000 less staff compared to the second quarter of last year.
Despite this, private sector employment skyrocketed, taking on 58,000 since quarter one – and is now 472,000 higher than this same period last year. It has risen every quarter since the end of 2011 and is now at its highest recorded level.
This is in line with a Manpower employment survey reported by PSE earlier in September, which revealed public sector employers were predicting the need to cut posts rather than take on staff as a result of weakened nationwide confidence around the upcoming Spending Review.
The survey showed that the public sector employment outlook has slipped to -1% for the first time since the end of 2014, with confidence in the north east of England – where one-fifth of workers are publicly employed, the highest proportion in England – being hit the hardest.
Amanda White, operations manager at Manpower, said at the time: “Part of this drop in hiring intentions is being driven by the public sector, where confidence has slipped nationwide following the government’s renewed commitment to cuts. We are also seeing a marked divide between job prospects across the north and those in London – a clear sign that the government’s plans to rebalance the economy through the creation of a Northern Powerhouse have so far failed to ignite.”
ONS labour market figures also released today showed that nationwide unemployment rose by 10,000 as a whole since the February to April period, standing at 5.5%. However, the number of unemployed people is still 198,000 less than one year ago.
And comparing the May to July period to the same time a year earlier, total pay (including bonuses) and regular pay for employees in Britain rose by 2.9%.
John Philipott, professional economist from The Jobs Economist and former chief economic adviser at the CIPD, said public sector workers will be feeling “less than chipper”.
He highlighted that their average weekly pay is also rising at a rate almost three times slower than the average rate in the private sector, and calculated that the first half of the year saw a 22,000 fall in the number of public employees.
In contrast, Michael Martins, economic analyst at the Institute of Directors, said the figures are proof that businesses “continue to power the recovery”, with the proportion of people in work suggesting the economy is “close to full employment”.
“People will have to look hard to find a negative story in today’s figures, which provide yet more evidence that the UK economy is strong and stable enough to begin the gradual and incremental process of normalising interest rates after the US Federal Reserve,” he added.
David Kern, chief economist at the British Chambers of Commerce, took a lighter stand, saying the “mixed figures” confirmed the UK is recovering at a “satisfactory pace” – but the rise in unemployment indicates that this recovery is “still fragile and significant risks will persist”.
But the TUC union slammed the figures, with general secretary, Frances O’Grady, calling the “worrying” data a sign of unequal nationwide recovery.
She said: “It is welcome that private sector earnings continue to rise, but there is still a long way to go to make up lost ground and the public sector is even further behind. We need a stronger and fairer recovery that works for everyone – with more investment in skills, infrastructure and innovation to help better job creation and sustainable pay growth.”