Public Sector Cuts Causing Further Unemployment

The latest UK unemployment figures have been released which show that the number of people out of work has risen to over the 2.5m. This figure, in the 3 months to October, meant a rise from 7.8% to 7.9%. Experts had expected a drop of 15,000, which would have lowered the unemployment rate to 7.7%, yet there was actually a rise of 35,000 people.

The rise was affected by a drop in public sector employment; 33,000 jobs were lost over this period due to the government cutting some major IT contracts. Figures from the Department of Work and Pensions also saw temporary staff contracts reduced by £650,000, a cut of around 21%.

This comes despite positive reports last month as well as the number of people claiming jobseeker’s allowance falling by 1,200 in November.

The government had recently announced that public sector jobs cuts would be reduced to around 330,000 from 490,000, with the cuts expected over the next four years. They have continued to insist that this will be compensated by a rise in private sector jobs, however, today’s data showed that private sector employment has flat-lined; a concern raised by the REC back in October.

There has been a lot of reaction from contractors and freelance workers, with many agreeing that it will be difficult for the private sector to take over these cuts. Although, Nigel Meager, director of the Institute for Employment Studies, found that temporary contracts actually increased by 23,000 this quarter to 592,000.

Roger Tweedy, of the REC, also believes that the problem is not the lack of opportunities, but the lack of suitable workers. He said, “The feedback from recruiters in many sectors is that the main challenge is going to be a lack of suitably skilled candidates for some of the specific opportunities that are starting to open up.”

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