Job losses and redundancies

Labour is out campaigning against 1.3 million alleged public sector job losses and compulsory redundancies. The government needs to put the record straight promptly before this camapign gets out of hand.

The official figure for job reductions in the puboic sector over the next five years is 600,000 according to the Office of Budget responsibility. This is around 10% of the public sector total. As 300,000 or so leave the public service every year you could save 600,000 with no compulsory redundancies at all. Where quangoes and offices are being closed down the employees could be offered something else elsehwere in the large public sector, as jobs become vacant.

Labour’s figure is 1.3 million or 20%. Over five years that is around the likely level of departures, but as far as Labour are concerned would entail redundancies as well. This figure is made up. The leak to the Guardian of “secret Treasury figures” was a leak of wrong Treasury figures. There is no secret plan to sack more than the OBR forecast. The OBR figure remains the best forecast. We can calculate a more accurate figure once we have seen the autumn spending round conclusion. That will depend on the balance between benefit bill reductions and the rest.

The government needs to be careful how it presents all this. Getting too many of your staff offside too soon when you need them to help you change the way public service is delivered would not be a good idea. They need to stamp on Labour’s attempts to whip up the public sector Unions.


  1. george Rowley
    July 5, 2010

    I also tghink that we should not be just looking at numbers but focusing on who and what the gaps are going to be. Some services are in my opinion already shaky and it wont take much to push them over the edge.

    We need to be promoting equality and combating inequality, lets look at what effect the reductions have on vulnerable people.

    1. Lola
      July 5, 2010

      Example. There are about 600,000 teachers but 1.4m people on the education budget. So just what are the other 800,00 doing?

  2. davidncl
    July 5, 2010

    Perhaps the idea is to precipate a showdown, win and move on.Much as Thatcher did.

    1. Martyn
      July 5, 2010

      Mention of Thatcher reminded me of something she once said, which was "the trouble with Socialism is that it always eventually runs out of someone else's money"…
      Doubt that anyone could make a more succinct and accurate assessment of our situation than that!

  3. Brian Tomkinson
    July 5, 2010

    Government spending is increasing every year in the budget but we hear nothing but savage cuts in spending; projected job losses are continually reported as double the official figures; natural wastage in the public sector is more than adequate to cover the numbers of job reductions but we are told that redundancy terms must be altered to enable the government to make redundancies. I thought we had seen the last of spin with Labour's departure – it doesn't seem like it. Why can't we have a clear explanation of what is being proposed?

    1. Alan Jutson
      July 5, 2010

      In todays Telegraph it is reported that the compensation scheme for Public Service Employees seems to be very generous, and outlines a minimum of 2 years salary as redundancy payment for anyone with 20 years service for voluntary redundancy, Compulsary redundancy triggers a 3-6 year salary payment for such service, depending on scale and position.

      It would seem that these employees (if true) not only have a gold plated Pension Scheme, but also a Gold plated redundancy scheme as well.

      The presenmt scheme it would appear was set up by the Conservative Party in the 1980's.

      Unless the rules have changed, or are going to change, this is going to be an expensive excercise.

      No wonder we may wait for natural wasteage.

  4. Andy
    July 5, 2010

    John the plain fact is: The majority of the electorate did not vote for the Tory/ToryLite coalition slash & burn policies. Your party has revealed it's election campaign of bring de-toxified to have been a sham, in short you've been rumbled.

    Your party has a pathological hatred of Publuc Services and is using the puffing up of a non-crisis into hysterical rhetoric to justify consigning public service to history.

    It will surprise you that it's not just Unions that distrust you. The public showed they don't either, by denying you an overall majority.

    The anger at your Party's actions is only tempered by a feeling of complete betrayal by your coalition partners.

    When will the Tory and Orange Book Liberals merge?

    1. Duyfken
      July 5, 2010

      "hysterical rhetoric" – you provide a fine example Andy.

    2. Alan Jutson
      July 5, 2010

      The majority who bothered to vote, voted Either Conservative or Liberal Democrat.

      Those who did not vote at all, I guess did not care who they got, so your assumptions and mathematics are wrong.

      Even the Labour Party said it would have to cut, indeed many of the cuts (that Labour instigated) were already taking place in the NHS months BEFORE the election. I Know, as we have friends and family members who work in the NHS.

      You cannot spend more than you earn (or receive in Tax) forever.

    3. A.Sedgwick
      July 5, 2010

      Perhaps you also believe in perpetual motion?

  5. Iain
    July 5, 2010

    "The government needs to be careful how it presents all this."

    Its more than a presentation issue, yes people can see the state needs to be slimmed down, but you need to show that the state is on the side of the people. Trying to fiddle the contracts of Government staff to make it cheaper to sack them seems to me to be very unfair, for we don't see the contracts of Executives being revisited to cheapen the cost of getting rid of them. No then a contract is a contract, so it should be for the little people. The state also needs to be on the side of people to get a new job, you cannot plan for whole sale sacking of people whilst loading the jobs market against these people by continuing to allow mass immigration, and inter-company transfers a scheme that is being subject to whole sale abuse by companies. But above all there has to be a fairness evident, and while senior Executives are trousering cash by the millions, who have seen a 400% rise in their salary packages over the last 10 years becomming little more than robber barons, , while the little people have seen a 13% rise no argument for austerity is going to be well received.

    1. simon
      July 5, 2010

      The odds are now so heavily stacked against the average man in the street that it's going to be very difficult to persuade them to go along with these austerity measures .

      What little family silver is left is due to be sold off into private hands (not "back to the people) and the majority only have a life of debt slavery and insecurity to look forward to .

      Think we also need measures of protection for our own people to limit foreign ownership of housing .

  6. Martin
    July 5, 2010

    I find Labour's attitude to unemployment figures beggars belief.

    They spent years massaging the Claimant figures downwards and didn't give two hoots about the decline of private sector workforce.

    Now that their public sector buddies (and their Union dues) are under threat Nu-Labour are inflating the figures like crazy.

  7. StrongholdBarricades
    July 5, 2010

    In the private sector, many people had to accept reductions in salaries and/or hours when the credit crunch bit their companies

    Can the public sector really be so inflexible when confronted with the same issues?

    I can see no point in the government taking the Unions head on like BA, but I do think that the Unions do themselves great damage (and their members) if they get the worst solution possible because of the costs involved.

    If the issues really are so bad in the public sector, and we are going to get rid of the bean counters, why can't they come up with solutions such as job shares, hours or salary reductions that will actually save jobs in the long run, but also insure that there is still a pool of talent within the public sector available?

  8. English Pensioner
    July 5, 2010

    When I joined the Civil Service back in 1968, I was sent on a "Middle Management" course at the Civil Service College. The first thing we all had to do was to talk for a few minutes about our job and answer questions from the others on the course. Mine was quite easy to explain, as an engineer I was overseeing and testing some new equipment at one of the Civil Aviation radar stations. But I always remember a Civil Servant from, I think, the DTI or its predecessor, whose job was to collate and publish some statistics each month. When asked why, he replied that some MP had once asked in the House for some facts on the subject, and the Department had been collecting this information ever since in order that the minister might have it available if necessary!
    I just wonder how many jobs are like that?

    1. Paul B
      July 5, 2010

      Quite a few jobs I think EP…

      Some of the jobs and salaries that out there are staggering.

  9. Norman
    July 5, 2010

    I do feel for those who have been deceived by Labour that the golden goose would carry on prodigously laying eggs regardless of how it was treated but the government has to govern in the interests of all the people, not just public service workers. The private sector (both businesses and individuals) are being taxed to death to sustain a behemoth of a system few of us want and even none of us needs.

    Please, stand up for us as well, we don't have large, well funded unions to cajole and threaten on our behalf so let's hope the government will stand up for us little guys in all this.

  10. libertarian
    July 5, 2010

    There are currently 498,000 advertised unfilled job vacancies in the UK.

    Get a bit fed up with sound bite politics and especially people like Andy (tories are evil and hate public sector) who have no understanding of the real world at all but would rather inhabit a fantasy land of every thing being a one dimensional zero sum game.

    I'm not a tory. We don't need full time paid politicians they have no useful purpose

  11. Mr Sakara Gold
    July 5, 2010

    The cause of the country's huge twin deficits goes back to the Thatcher and Major adminstations, of which, as I recall, you were once refered to as an "illegitimate" member.

    Their destruction of the industrial base of the nation due to an artificially high exchange rate and for political reasons resulted in Britain's withdrawal from whole swathes of manufacturing industry. The result was mass unemployment, huge costs in benefits, an ever-growing structural deficit, high taxes and a massive exodus of well-educated talent to our competitors, all in the name of "market forces"

    Furthermore, those two administrations, of which you were involved, squandered the oil revenues from the North Sea on tax cuts for the wealthy and unemployment benefits instead of setting up our own Sovereign Wealth Fund to invest for the future.

    Non productive government "jobs" paid for out of taxation or borrowing money from foreigners are what the Coalition government needs to scrap. Somehow we must rebuild our manufacturing base and start making things at an affordable price that the rest of the world wants to buy from us.

    Reply: Look at the figures. Manufacturing expanded under the last Conservative government 1979-1997 and contracted under Labour 1997-2010

    1. libertarian
      July 7, 2010

      What a load of utter nonsense.

      The union militants did for the British Car industry, docks and coal mining and severely damaged steel.

      Despite that manufacturing grew during the Thatcher years and despite going down in the last 13 years Britain is still the world's 7th largest manufacturer.

      Your post is a classic example of what I wrote earlier about sound bite fantasists

      1. Sakara Gold
        July 9, 2010

        Under John Major's administration this country became a net importer of manufactured goods for the first time since the industrial revolution! It was high interest rates damaging exports and a refusal by british manufacturing companies to invest in new technology that did for manufacturing in the UK.

        Inward investment by foreign companies wanting access to european markets raised the number of low-paid manufacturing jobs in Wales and Northern Ireland short-term, but now those companies have moved to Shanghai or Malaysia.

        Our competitors in Germany, Italy and even Sweden dealt with their unions in a less confrontational way. Had we not had interest rates at eye-watering levels in a futile attempt to maintain our ERM status the unions would have been less militant in attempting to defend their member's interests. Did you get your house re-possesed?

  12. Andrew Johnson
    July 5, 2010

    After 13 years of being propagandised by New Labour – daily told boom and bust has been abolished and that we had one of the strongest economies in the world, it's no wonder that the majority of people question why cuts on the scale being proposed might be necessary. I believe posters who say people do understand why we need to make cuts are just plain wrong. The majority do not.
    I was among several posters who said the coalition had to have an ongoing information campaign to explain to people, that Labour had lied to them, and for 11 of their 13 years had annually spent far more than the nation earned. GB faces hugerising interest payments. Get the message across – There really is no money left. The coalition is failing to do this big time. It needs a dedicated coalition team and a sustained press, tv, internet and radio campaign for months.

  13. Andrew Johnson
    July 5, 2010

    Continued: If the coalition fails to convince the majority of the need for cuts it will fall and soon. Huge strategic error to ask Govt depts to prepare plans for 40% cuts and so publicly review redundancy payments of low paid public sector jobs.
    New politics- we're going to tell you the truth – parliament's power needs to be increased? Classic New Labour.
    John have a word, tell them to get a grip, or do they want to see a million public sector workers on the streets with all the damage that would do to GB PLC?

  14. John
    July 5, 2010

    There are two points to Labour’s heckling on this issue which really irritate me and which they should be directly challenged on :

    1) Despite trying to claim themselves credit by saying they’d already announced a plan to halve the deficit in the next parliament, not a single Labour MP has produced a credible detail breakdown of where those savings were actually going to come from. Indeed I don’t recall ever seeing Labour challenged over it’s ‘halving the deficit’ plan, as planning to still be borrowing £80bn a year in 5 years time was almost no plan at all.

    2) When Labour stoke up the ponderous ‘savage cuts in public services’ argument, we should remember that Labour added over a million people to the public payroll during it’s tenure, and some 700,000 since 2005. Most of those were not frontline staff. How many more nurses, firemen, police and army do we have out of that 700,000? Not many.

    I get so annoyed when the BBC, Unions and Labour MP’s keep trotting this out. Blair used to say it as well when he was in office. Having sanctioned the increases in staffing they keep suggesting that frontline staff will be the sacrifice of spending cuts. The fact that they seem happy to prioritise all the frontline staff for cuts instead of the legions of non-jobs they have created since 1997 illustrates thier thinking. It’s a “human shield” of public spending. When will the BBC (or a parliamentarian) challenge this canard of an argument?

  15. Andrew gately
    July 5, 2010

    Any chance of a comment on the nil compensation for Bradford and Bingley.

    Bradford and Bingley like Northern Rock, Alliance and Leicester, Lloyds HBOS, RBS, Dunfemline building society, Derby building society etc. were victims of the systematic liquidity shortage caused by the interbank markets freezing up in response to the US sub prime mortgage crisis.

    Now we are supposed to believe that a business which employs 3000 employees and has 900,000 shareholders as well as over a billion in shareholders funds is worth nothing. This is because of biased compensation terms that would make Robert Mugabe blush.

    As the only financially literate MP in the house we need you to speak out on shareholders behalf. We are being robbed and something needs to be done about it.

    1. nonny mouse
      July 6, 2010

      Are you willing to give back the profits made in the good years from the reckless lending strategy that was employed on your behalf?

      Investing in stocks is gambling. Most of the time it pays off, but when it doesnt you cant expect tax payers to make up your losses.

      1. Andrew gately
        July 6, 2010

        Investing in stocks is not gambling, it is buying an asset that you hope will provide you with an income stream.

        Also the taxpayer has not made any losses on the contrary the tax payer is making a handsome profit from the loans provided to banks. in his budget statement Alistair Darling stated that 8 billion had flowed into the treasury coffers from the support offerred to banks.

  16. Javelin
    July 5, 2010

    I watched in horror the last court case (lost by the Labour Party) trying to bring public sector redundancy costs down. A non exceptional example of somebody on £30k having 15 years experience getting paid £60k were roughly the sorts of figures. I’m glad now a law will be brought in to bring these figures down to the private sector.

    I understand why the original contracts were honoured in court and a change of law is now needed. But I haven’t heard the conservatives point out that the Labour party had started the legal process in the first place and have no right to complain.

  17. Magelec
    July 5, 2010

    For how long will the natural wastage of 300,000 per anum public employees obtain? Retirements yes, but other leavers will have to have jobs to go to. Will the jobs be there in the private sector? Surely many people will stick with what they have rather than risk the real world if thay have the option.

    1. libertarian
      July 7, 2010

      As I said earlier if you care to read there are currently 498,000 unfilled job vacancies.

      The number of vacancies have risen for 8 consecutive months. The number of jobseekers fell 4% in May ( the last official figures)

  18. Lola
    July 5, 2010

    If, as you say, 300,000 (and they are the figurtes I have) people leave Government employment each year, all you need is a recruitment freeze and you'll cut 1.5m jobs in 5 years. (And that at NAE of approx £25K p.a. plus 28% pension subsidy is a saving of £48Bn p.a. – forever) You might want to make sure that you replace doctors and nurses etc, but as Socialism has no means of economic calculation you can only be sure that the 'right' numbers of doctors and nurses etc are being employed if you privatise health (and education) delivery – if not funding, which should follow the patient/student. The only thing you absolutely need to repace on the state payroll is military personnel.

  19. Ian Pennell
    July 5, 2010

    Dear John Redwood

    Again, excellent analysis of the current situation, Sir! But I would add, it is important to remind folk in this country that there have not been any real-terms cuts to date. But with the massive Budget Deficit and the huge liabilities of unfunded public sector pensions and Private Finance Initiative costs there is no doubt that deep cuts to departmental budgets will be necessary. Since the NHS and International Development are to be ring-fenced that does mean massive cuts (20 to 25%) to other departmental budgets. We need to target the quangos and the vast amounts spent on single teenage mothers wanting Council houses and a generous allowance for having babies and we must also target those who take time off for "stress and anxiety" and who expect to be subsidised by the Government for the privilege. As, according to the Taxpayers Alliance the quango bill annually is £160 billion, it follows we could cut the size of all quangos by 75% and save £120 billion annually. By targeting the feckless and the lazy we could net a further £25-30 billion. And all that together would eliminate the Budget Deficit without sacking a single policeman, teacher, doctor or nurse. If we can show that that is how we would eliminate the massive public debts we can expose Labour for all their spin and distortions and render them ineffective in ailienating the British public from us.

    However, Sir, there are other threats to our economy, not merely just the huge debts and although the Conservatives are compromised somewhat by having to govern in Coalition with the Liberal Democrats I feel that Sir David Cameron should give due weight and consideration to the three other areas Britain could be derailed, namely:

    1) We need to be braver in making the case for less tax and less regulation for the wealth-creators in our economy. It is businesses that make things of real value that the public consume, they create wealth not the Government. And it is businesses therefore that will lead us out of recession and strengthen the economy so that tax revenues increase (some of which can then be used to pay off Britain's debts faster, with the rest improving public services and assistance to the poorest in society). If we believe the 50% top rate of tax is damaging to business we must say so and George Osborne must be persuaded to axe it ASAP. Britain will not cope with austerity if this involves more taxes on businesses.


  20. Ian Pennell
    July 5, 2010


    2) We need to stand toe to toe with the European Union in a much more forthright manner when they propose legislation that will seriously damage Britain's economy. The legislation covering Alternative Investment funds and ,lately, the proposals to make business cough up much more for final salary pension schemes would damage Britain's economic competitiveness. Even at the risk of upsetting our Liberal Democrat partners in the Coalition the Conservatives must not slavishly gold-plate every bit of piffle that comes forth from the European Union, if the EU threatens Britain for non-compliance we threaten to withdraw from the European Union. The excessive legislation stifles British businesses, the taxes and regulation they expect us to impose and the fact that we are net contributors to the EU coffers surely outwieghs the benefits of access to the Eurozone market for Britains economy. I am suprised that, of all those who would govern Britain, Conservative MPs as a whole are either unable (or refuse) to acknowledge this and then to pressurise the Executive to do something about it.

    If Britain's economy, along with the rest of Europe, struggles over coming years it is most likely to be because of reduced demand from the Eurozone (arising from European governments having to impose austerity measures) combined with the excessive red-tape and taxes that the EU would impose on us. David Cameron wants to think seriously about the longer term, the Conservatives will pay dearly at the next Election if Labour could get the public to believe that because of the necessary austerity measures Britain needed to take that we are back in recession with rising unemployment, when the truth was our inability to be brave and to face down those who want to tax and regulate Britain to the death. It is better to risk ailienating the Liberal Democrats and having to go to the country sooner so we can break Britain free from the highly taxing regulatory bodies that encumber the economy (the EU, and the Liberal Democrats who want us to slavishly stay with the EU), than have to face a very angry electorate in five years time.

    3) The third major area which there is disagreement with the Liberal Democrats (and the European Union) on is Britains energy policy. The situation facing the World is the fact that the oil is running out, the gas is running out and we have a limited window (ten years, perhaps) to replace our reliance on oil/gas with another secure source of energy- nuclear power. But quite a number of our nuclear power stations are about to shut down, they being near the end of their working lives. So this is one area, perhaps where the new Coalition Government really needs to be spending money, about £10 billion a year, to get many nuclear power stations up and running by 2020 complete with a major Uranium recycling centre (so we can re-use the spent fuel rods) and a good few million tons of Uranium. If the lights go out and the economy goes crash as a consequence it will be a disaster for Britain, and for the Conservatives electoral fortunes for decades afterwards!

    So we need to stand up to the EU, we must tell them where to put their biofuels and renewables directives and we must be willing to stand toe to toe with the Liberal Democrats on this issue. Wind power, wave power and solar power are not going to make up the shortfall in Britain's energy needs, again the Conservatives must be willing to risk the collapse of the Coalition if that is the price for not getting pushed into something that will prove catastrophic for both country and the Conservatives in the longer term.

    I trust Sir that you, in a position to contact Sir David Cameron directly, will remind him of what is important. Cutting the Budget Deficit is vital, but so too is ensuring we can make Britain sufficiently tax/regulation friendly to thrive, ensuring that Britain has a sound and reliable energy supply long into the future and then, if need be, standing up to the EU and the Liberal Democrats to achieve this.

    Yours etc

    Ian Pennell

  21. Chuck Unsworth
    July 5, 2010

    "This figure is made up."

    Indeed. And this isn't anything new for New Labour, is it?

  22. john east
    July 5, 2010

    No matter how well you present the necessity for, and the fairness of the cuts you will meet fierce ideological opposition from the left. You cannot win against the likes of Bob Crow with reasoned argument.

    So my question to Cameron is this. Well done so far in going for cuts, and for trying to make them fairly, but are you up for the inevitable fight to come?

  23. billyb
    July 5, 2010

    Show us the savings on "non-jobs" that can safely be cut without affecting frontline services.

    Or aren't there really that many?

  24. Kevin Peat
    July 5, 2010

    People will believe what they want to believe.

    You just have to get on with the job which is going to be terribly difficult – especially now that many of the manifesto promises are being dropped… no gain for lots of pain. Your party has managed to alienate a lot of supporters who know that the serious problems facing Britain are not only economic ones.

    I always told you that you that winning would be a poison chalice.

    I wish I hadn't voted Conservative.

  25. nonny mouse
    July 6, 2010

    The risk to this strategy is that the good people leave and the worst stay.

    In a typical private enterprise there are rounds of layoffs when times are tough, Those that are cut are typically the lowest performers. At the same, if a company is looking shaky and morale low then the best will find other jobs.

    A more efficient (if not politically acceptable) method would be to evaluate every public sector employee in every department and quango and cut the lowest 10%, even if that means you need to re-hire at a later date.

  26. BigJohn
    July 6, 2010

    Have the unions read what is happening in California :-

    They obviousy have a better laws about throwing away taxpayers money than we have.

    If you haven't got the money, you have to stop what you are doing.

  27. Kevin Peat
    July 6, 2010

    In view of looming industrial actions I find it ironic that the Government are keen to limit union led strikes where a low voter turnout has endorsed it.

    Why not apply this to general elections too ?

    Low voter turnout is not down to 'apathy' but because of a lack of parties that the people want to vote for. A 'none of the above' box on the ballot slip would show just how disenfranchised the British public are.

  28. christina sarginson
    July 6, 2010

    I agree the message from the government needs to be a strong and accurate one, however you cant blame the Labour party for having their say John, I am not really sure what people will believe anymore they are told so much by different paties and different MP's. I think most people make up their own mind up and realise that all is fair in love and politics.

  29. Jane
    July 6, 2010

    Went to the shops in Bath today, the ssales are on but hardly anyone seems to be buying. In thi scity there are quite a few public sector workers – council, university, nhs, MOD – and when they lose their jobs, or fear that they may, they stop spending and supporting all the shops, restaurants, hairdressers, music teachers, beauty therapists, kitchen fitters, builders, gardeners, etc etc.. shops are closing at an alarming rate even in Bath.

  30. jane
    July 6, 2010

    The NHS and social care are already being cut and the panic is on to find even more savings, even where there are genuinely none to be had, such as in old peoples' services. It is no exaggeration to say we will not be able to fulfil our basic statutory duty to look after frail old people in their own homes and keep them safe, if cuts of the magnitude being discussed are actually made. you will have to say goodby to the much vaunted personalisation agenda in social care – opting to stay at home with round the clock care staff coming in at a cost of 5k per week in some cases, when you could be looked after in a nursing home for 600, will have to go. Not to mention those who get hundreds of thousands in compensation for injuries including care costs then get all their care provided free by the NHS. Unpopular targets, but then we are all in this together, aren't wek?

  31. […] Job losses and redundancies […]

Comments are closed.