News and features

Fri, 15 May 2009

Public sector is "recession-free zone"

In response to unemployment statistics, CIPD calls for pay freeze among public sector employers.

Public sector employers have been relatively untouched by the recession gripping the UK economy, despite new figures revealing that the unemployment level has risen above two million for the first time since 1997.

This is according to the Chartered Institute of Personnel and Development (CIPD), which claims that the public sector remains a "recession-free zone" while job cuts continue to ravage employers in the private sector.

Chief economist at the CIPD John Philpott referred to a "public sector-private sector divide" as the most recognisable feature of the current recession.

Data from the Office for National Statistics (ONS) shows that the unemployment rate increased by 6.5 per cent between November and January, with 2.03 million people now out of work.

The CIPD said that although the government is right to maintain staffing levels in the public sphere, it should move to impose pay restrictions in the sector immediately.

"With the private sector in dire straits … there is no labour market necessity or strong economic justification for public sector earnings to rise faster than private sector earnings," Dr Philpott commented.

"Cash-strapped private businesses are asking staff to make sacrifices to save jobs. The government and public sector employers should do likewise, redirecting savings on wage bills to help combat the rising toll of unemployment."

According to the ONS figures, 23.6 million people were in private sector employment in December 2008, down by 13,000 from September.

Reports from the British Chambers of Commerce and the CBI predict that UK unemployment will exceed three million next year.

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