Budget watchdog forecasts further public sector job cuts

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The number of public sector job losses is forecast to increase to 1.1 million over the next few years amid further cuts in public spending, it was disclosed today.

The Office for Budget Responsibility (OBR) said in its report published alongside the Autumn Statement that Government employment was expected to fall further than previous estimates because of an additional year of spending cuts pencilled in for 2017-18.

The UK's general unemployment rate is expected to increase slightly over the coming year, peaking at 8.3%t at the end of 2013, before recovering gradually from 2014 and reaching 6.9% at the end of 2017, said the OBR.

"Between the start of 2011 and the start of 2018 we expect total market sector employment to increase by around 2.4 million, more than offsetting a total reduction in general Government employment of around 1.1 million."

Dr John Philpott, director of The Jobs Economist, commented: "Although the OBR has lowered its forecast for the peak in unemployment, it nonetheless paints a very bleak outlook for the UK labour market in 2013.

"The number of people in work is forecast to be unchanged between Q4 2012 and Q4 2013, the employment rate is forecast to fall from 58.4% to 58.1%, the number of people unemployed is forecast to rise by 100,000, with the unemployment rate increasing from 7.9% to 8.4%.

"Whatever the medium term employment impact of the policy measures contained in the Autumn Statement, the OBR clearly does not expect these to help the jobless in the short term.

"The picture for the public sector is even bleaker. The OBR is now projecting that the coalition's spending plans will eventually result in the loss of more than one million public sector jobs, including 700,000 in the current Parliament.

"Forecasts of job losses on this scale were ridiculed in 2010 but are now being realised. Assuming the OBR is correct in forecasting 2.4 million additional private sector jobs in the coming years, the share of public sector employment in total employment is heading toward a record post war low."

PA