The CIPD has predicted that half a million jobs could be cut in the public sector over the next 5 years. This could be potentially damaging to the umbrella company marketplace, since many workers reside in this sector.
Dr John Philpott, the chief economic of the CIPD believes that cutting jobs when the economy is still weak could harm the country’s economic recovery.
He is concerned that if the Tories win the election and push ahead with their plans to cut spending by £6bn, the result could be higher unemployment.
Dr Philpott said that the squeeze on public spending after the election is much greater than the political parties will admit to at present. He believes that the public sector workforce may be shrunk by as much as 10%.
He also said that it was misleading to say that the pain of job loss can be alleviated through pay cuts or reducing working hours. Although this strategy was successful in the private sector during the downturn, it is just a short-term solution.
Kevin Green from the REC commented on the prediction yesterday and reiterated his organisation’s view that deep-rooted reform rather than severe cuts is needed to solve the public sector problems. It has yet to be fully understood exactly what impact a change of government will have on UK recruitment agencies and umbrella companies.
The REC is currently promoting a resourcing campaign that focuses on attracting leadership talent to the sector, outsourcing and implementing flexible staffing measures.
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