Figures recently released by the Chartered Institute of Personnel and Development (CIPD) estimates that within five years the austerity measures taken by the UK government will cost 1.6 million jobs. The private sector is expected to offer relief as new jobs are created to take up the losses seen in the public sector. But the CIPD is warning that the private sector will be unable to make up enough to get the economy on track when it comes to the UK workforce.
CIPD reports that the spending cuts and VAT increase coming up will hit the private sector much harder than the public sector. Instead of slowly adding jobs to the workforce as predicted by government it is estimated the private sector will lose 650,000 positions. The VAT increase is expected to hit profits so badly that 250,000 jobs will be the casualty of that plan. The CIPD states the number of public sector jobs estimated to be lost according to government reports fails to count the 50,000 likely jobs lost by the end of the current financial year and of the job losses of 120,000 that are likely to occur in the 2015-2016 financial year.
If as the CIPD reports the private sector will be so severely hit then the plan for private sector growth and job creation will be very unlikely to be at pace in time to save those who find themselves unemployed.
Dr. John Philpott, the CIPD’s chief economic adviser, said: “The question ‘Where will the new jobs come from?’ is bound to be asked for quite some time yet.”
“The full impact of the coalition government’s planned fiscal tightening has been understated.”
“The 490,000 public sector job losses cited in the Spending Review looks like an underestimate, given what most public sector managers are telling [us].”
The Treasury defended its spending cuts, saying: “The independent Office for Budget Responsibility has set out its forecast showing sustained economic growth in the years ahead, with employment rising and unemployment falling.”