Headlines: September 17th, 2010

The Chartered Institute of Personnel and Development has warned that swift reductions in public sector jobs will harm the economy. It calls for the cuts to be implemented in a way that minimises adverse effects on the government’s wider objectives for growth, jobs, welfare to work initiatives and public service reform.

The Institute argues that the rate of net private sector job creation will be insufficient to start offsetting the impact of public sector job cuts before 2013. It has urged ministers to limit public sector job cuts in the fiscal years 2010-11 to 2012-13 to no more than 125,000. This amounts to around 1 in 5 of the total job cuts expected to result from the coalition’s austerity programme. Ideally, the majority of subsequent job cuts would also fall closer to 2015-16 than 2013-14.

Deferring cuts in this way would prevent total UK unemployment from rising above 2.8 million by 2012 and thereafter make it easier for stronger private sector job creation to enable unemployment to fall. A more aggressive approach to public sector job cuts would push unemployment close to 3 million and be especially harmful to those regions of the UK least well placed to enjoy an early and significant improvement in private sector employment.

This concern about rapid job cuts is shared within local government because swift cutting of payrolls would harm the capacity of councils to implement change and bring in longer term transformational changes in the way services are delivered. Morale has already suffered from the redundancy climate. Some councils have made cuts and all are planning to do so. The axing of the Government Offices for the Regions and the Regional Development Agencies has added to the gloom.

Andy Hancox, Director of the West Midlands Improvement and Efficiency Partnership said: “Managing change to implement the budget cuts will be extremely difficult. There is concern that if the Comprehensive Spending Review demands not only deep but rapid reductions in resources they will have to be implemented alongside the management of very challenging workforce issues.