Public-sector jobs cull has begun already, says CIPD

(Bloomberg)

Four in 10 public-sector employers have begun to make workers redundant, new data will reveal today, just a month after the Government spelled out its plans for cuts in the Comprehensive Spending Review (CSR).

The figures from the Chartered Institute of Personnel and Development (CIPD) will alarm labour- market analysts, who had expected the public sector to phase in job cuts more slowly. However, the CIPD, which earlier this month gave warning that the CSR could result in 1.5 million job losses in the next five years, said it believed that during the next few months at least, the private sector would be able to take up the strain of these initial public-sector losses.

The CIPD's quarterly survey of the employment market, conducted in association with the accountancy firm KPMG, shows a net positive balance of 11, which suggests more employers are planning to hire staff than to shed them. This is the third quarter in a row in which the survey has produced a positive balance, with the latest balance up nine points on three months ago.

The split between the private and public sector is, however, stark: the private-sector balance is 39, while in the public sector it is minus 44. Moreover, there is evidence that the latest private-sector figure is being boosted by employers planning to hire workers on short-term contracts for the Christmas season and that employers are becoming more cautious about the outlook for next year.

In the private sector, the manufacturing sector reports the strongest demand for new staff, while IT businesses are also recruiting actively. Almost all parts of the public sector plan to shed staff, with central and local government taking the most aggressive approach to job losses. Some 41 per cent of public-sector organisations said they plan to make staff redundancies by the end of the year, with around 14 per cent of their workforces likely to be affected.

John Philpott, the chief economic adviser at the CIPD, said that seasonal recruitment would alleviate the worst of the job cuts during the next couple of months but that the outlook for 2011 was a cause for concern. He said: "What remains to be seen is how much of this good news is merely a pre-festive-season surge in private-sector jobs or evidence of a sustained improvement that will continue to offset large-scale public-sector job cuts which, as the survey shows, are already well underway."