500,000 public-sector jobs at risk, report says

More than 500,000 public-sector jobs could be axed in the next five years under a post-election squeeze on spending, which will be far greater than any of the main political parties were admitting, a business group has warned.

The jobs cull could lead to a 10 per cent reduction in the 5.8 million public-sector workforce that would "dwarf" anything in the party election manifestos, predicted a report from the Chartered Institute of Personnel and Development (CIPD). Its chief economic adviser, Dr John Philpott, said it was "misleading" to suggest the pain of job losses could be eased by pay cuts or short-time working.

"This strategy has been successful in the private sector during the recession as a means of avoiding redundancies during a cyclical downturn in the economy, but is not an effective response where long-term structural change is involved," he said.

"An economy with almost 30 million people in work and in which tens of thousands of jobs are lost and created every year should be able to cope with a period of large-scale public-sector downsizing without this resulting in higher unemployment." The report was published ahead of joblessness figures on Wednesday, the last official unemployment data before the election.