Town halls are likely to slash more jobs this year, as the public sector suffers from the post-recession economic ‘lag’.
Cllr Margaret Eaton, chairman of the Local Government Association, has warned that, with unemployment forecast to rise further before the general and local government elections, town halls could be forced to reduce their workforces further despite severe cuts last year.
‘Town halls have been swept by the cold winds of recession. Up and down the country, many councils feel they have to take the decision to cut jobs in response,’ she said.
Birmingham City Council, Britain’s largest local authority, last week announced plans to axe 2,000 posts as part of its savings drive.
Cllr Eaton’s comments were quickly followed by the publication of a new report by the Chartered Institute of Personnel and Development (CIPD), which predicts that unemployment could increase by 50,000 per month in the second half of 2010, to 2.8 million. CIPD researchers believe the public sector, including local government, will bear the brunt of the new job cuts.
John Philpott, chief economic adviser at CIPD, said: ‘The UK jobs market is still on the ropes, with a public sector fall in productivity now a reality.’
Researchers also found that a quarter of all private sector firms are planning further cuts this year. That is likely to mean that employment and welfare policies grow in importance prior to the elections.
