PUBLIC SECTOR TO EXPECT 40% JOB CUTS – Public sector workers are bracing themselves for what will be the biggest number of public sector job cuts in 50 years and will see a number of questionable parts of state administration being axed in order to reduce public spending.
In a report by the Institute for Fiscal Studies (IFS) it noted that the reductions are part of a wider plan in order for the Coalition Government to reduce the national deficit.
There can be no argument that Britain needs to bring spending under control and with approximately 1.1 million public sector jobs expecting to be cut it could reduce the deficit significantly.
For every action there is a reaction and in this case where Britain would certainly reduce the deficit it will inevitably put people out of work thereby increasing the welfare bill.
With the recent welfare reforms capping benefits to a maximum of £26,000 per year the Government will need to carefully consider where and if the cost savings can be met when weighing employment and the payment of taxation as opposed to paying welfare.
The IFS has said that the programme would prove challenging for poorest parts of Britain. The Office for Budget Responsibility was expecting to cut the 1.1 million jobs during an eight year period and yet in 2010 / 2011 only one quarter of the cuts have been achieved to date.
The IFS went on to state that such a decision to protect the budgets for the NHS and schools effectively meant that the bulk of job losses would be in the so-called ‘non-protected’ parts of the central government workforce.
Such would then force the Government to axe the workforce by 40% from 2.2 million to 1.3 million within the next six years.
The report stated that the Government now employs a smaller proportion of the workforce more than at any other time in the previous 40 years and such dramatic cuts could well change the landscape of the UK labour market.
Currently the NHS and Education dominate the public sector workforce. In 1961 it equated to 37% of jobs, in 1991 this increased to 47% and by the end of 2013 this had increased to 60%.
The IFS stated that if the NHS and Education is to be protected then it could amass a workforce approaching 70% of the public sector labour market.
This is without doubt a delicate balancing act and one that involves protecting the NHS and the Education system although considering recent revelations of inefficiencies it might be time the Government took a long hard look at ways to streamline the administration system in order to make it more efficient and significantly reduce costs.
Putting so many people on the unemployment line will also be met with opposition, especially at a time when migrant workers are now free to enter the UK from mainland Europe and work without any restrictions.
The question remains as to whether we can sustain an economic recovery that is being fuelled by personal debt and whether we can address issues such as welfare and public sector jobs in order to reduce the national deficit in order to decrease public borrowing.