CIPD estimating thousands more UK job losses from spending cuts

| November 2, 2010 | 0 Comments

The Chartered Institute of Personnel and Development (CIPD) has said the private sector will be hit severely hard as a direct result of the Government’s spending cuts.

Last month, Chancellor George Osborne unveiled his Comprehensive Spending Review – in what has been described as the most savage spending cuts since the Second World War.

The cuts, designed to trim the budget deficit, will result in the loss of half a million public sector jobs by 2014.

However, according to the CIPD, the private sector will be hit harder by the cuts than the public sector and is forecasting that around 1.6 million job losses across both sectors.

The Institute’s chief economic adviser, Dr John Philpott, comments: “The full impact of the Coalition Government’s planned fiscal tightening has been understated.”

The Government has defended its harsh spending cuts and has pledged that they would bring the British economy “back from the brink”.

However, many experts believe that slashing the deficit too quickly could pose a threat to economic recovery and push the UK back into a recession.

Meanwhile, the CIPD actually estimates that the total number of jobs to be lost in the public sector between 2009-10 and 2015-16 to be approximately 725,000.

The number of jobs lost in the private sector due directly and indirectly from the cuts would be 650,000, it is predicting.

It also believes that an additional quarter of a million jobs will be lost as result of the VAT increase - due 1 January 2011.

However, the Institute concludes that the private sector could add over 300,000 jobs over the next 5-6 years if the economy expands faster than 2.5% per year on average.

However, all experts agree that growth will be hampered as a result of the cuts so this level of job creation is unlikely.

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