Page last updated at 05:49 GMT, Tuesday, 16 June 2009 06:49 UK

'Huge job cuts' for public sector

Queue outside a job centre in Bristol
The CIPD says public sector cuts will impact on service provision

As many as 350,000 public sector jobs could be lost over the next five years, the Chartered Institute of Personnel and Development (CIPD) is warning.

Chief economist John Philpott says the recession will bring "a bloodbath in the public finances" which will force employers to slash their workforce.

This could lead to "guerrilla war" in the workplace, characterised by repeated strike action, he said.

The public sector union, Unison, said support for Labour had "collapsed".

Speaking ahead of the union's national conference, general secretary Dave Prentis said a poll of 1,000 members found just over 30% planned to back Labour at the next election, down from 42% a year ago.

"Public sector workers were always regarded as the heartlands of Labour, but that vote has collapsed," he said.

'Fiscal squeeze'

Figures released last week by the Office for National Statistics showed that overall UK unemployment was rising faster in this recession than at any time since the 1980s.

Despite this, employment in public sector occupations such as education, health, and public administration were up 2% year-on-year.

But Mr Philpott believes any optimism based on figures like this is "premature".

"The public sector has yet to feel the full impact of the recession, and the resultant bloodbath in the public finances," he said.

Sympathy will have been frayed by private sector job losses and pay freezes which will have touched many families
John Philpott, CIPD

"The CIPD's current estimate is that the fiscal squeeze implied by government plans will result in a total of 350,000 job cuts in the public sector overall between 2010/11 and 2014/15.

"This will be preceded by around 30,000 job cuts in local authorities in the next year."

Mr Philpott said the likely scale of job cuts required would "inevitably have an impact on levels of public service provision".

And he stressed that the "impending age of austerity" would mean that "the greater job security and relative generous pay and pensions packages enjoyed by public sector workers will soon be a thing of the past".

The CIPD is also warning that there could be a dramatic increase in industrial action.

"As a result the coming era of public sector austerity might not only witness large scale job cuts, but also an ongoing 'workplace guerrilla war' marked by waves of major public sector strikes and regular bouts of unrest," Mr Philpott said.

"One brake on this possibility may well be wider public opinion.

"Here sympathy will have been frayed by private sector job losses and pay freezes which will have touched many families, and further exacerbated by a growing awareness of the huge gulf between generous public sector pensions and private sector pension schemes that have been squeezed and in many cases closed."

A report by the NHS Confederation warned last week that the health service in England is facing a real-terms budget reduction of between £8bn and 10bn over the three years after 2011.

And on Monday, Shadow Chancellor George Osborne said it would be "ridiculous to pretend there won't be cuts" in public spending in the coming years.

CBI plea

Meanwhile the CBI has said that businesses are being deterred from bidding for public service contracts by the need to match what it says are "costly" pensions when staff transfer to private firms.

The business group said firms had to pay between 25% and 50% of salary to fund the pensions of ex-public sector staff.

That the CBI said, was leaving many unable to compete against a public sector employer, which contributed roughly 15%.

Staff moving to a private contractor should be able to retain membership of their public sector scheme, the CBI said.



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