Private and public sector jobs gap widens

The difference in job prospects between the private and public sectors is widening, even as the UK emerges from recession, according to new figures.

The CIPD/KPMG survey of 800 employers reveals the private sector was more optimistic about creating jobs in the second quarter of 2010.

However, public sector employers are radically more pessimistic about employment intentions compared with three months ago.

Gerwyn Davies, CIPD public policy adviser and author of the report, warns the public sector faces huge difficulties as employers seek to close the lid on employment, pay and promotion.

“This will present huge challenges to public sector managers in their attempt to keep employees engaged; particularly if the cost of living continues to rise,” said Mr Davies.

“It will also present challenges to the employment participation rate of women and the economic development of some UK regions, which have both been boosted by record increases in public spending in the past decade.”

For the first time since late 2008, the overall net balance between the percentage of employers expecting to recruit and those looking to cut staff across all sectors of the economy is now positive at +5%.

Although this is a significant improvement from -5% in the previous quarter, the boost was nearly wholly enjoyed by the private sector, which surged from +5% to +29%.

In stark contrast, the public sector recorded a net balance of -43%, representing the most significant negative score since the survey began in 2004. Even though all main political parties have identified education as key to the UK’s future economic growth, the sector posted a -45% confidence vote from employers.

Brendan Barber, General Secretary of union TUC, told FE News it would be “utter madness” to force hundreds of thousands of public sector workers into dole queues, risking a double-dip recession.

“The best way to reduce both public spending and unemployment is to invest in new jobs and training, particularly for young people who have been hit hardest by the recession,” said Mr Barber.

“Investment in the Future Jobs Fund and Apprenticeships now will save money in the long run by keeping people off benefits and ensuring that they are well placed to take up new jobs as the economy recovers.”

Alan Downey, head of public sector at KPMG, said the findings show employers in the public sector have woken up to the scale of the financial challenge heading their way.

“It has been clear for some time that the steady increase in public sector jobs would have to come to an end. So the change in attitudes is not in itself a surprise,” said Mr Downey.

“What is surprising is the speed and extent of the U-turn in attitudes. Just three months ago public sector employers were relatively optimistic and many were continuing to recruit. Now they are massively more pessimistic than their private sector counterparts about job prospects, with more than 40% contemplating a reduction in headcount and a significant number planning a pay freeze.

“It is clear that the chill wind of the recession has reached the public sector with a vengeance.”

Jason Rainbow