20 October 2010 #Employment
As the headline figure of an estimated 500,000 public sector job losses starts to sink in following today`s spending review announcement, we should remind ourselves that this is only an estimate. The really hard work of how £83 billion worth of spending cuts by 2015 will translate into job losses is likely to take some months to thrash out and even then there will be plenty of negotiations to be had with the unions.
In France, proposed spending cuts of less than half the UK figure announced today together with the proposal to raise the retirement age has already led to rioting on the streets. Germany is set to make much deeper cuts where it is proposed to reduce spending by £66 billion. In Spain government workers are facing a 5% pay cut but there unemployment has doubled to an eye watering 20% since 2007. We should not forget Romania where workers face 25% pay cuts.
The challenge to the unions in the UK is to keep the estimated 500,000 figure down. No doubt there will be plenty more talk of strike action and protests in the coming weeks and months but reality will soon set in on both sides of the issue as the grind of negotiation gets underway.
One wonders how helpful these estimated figures are in the current jittery climate. Last week Birmingham City Council, the largest single local authority in the UK, wrote to 26,000 of its staff advising them of possible changes to their terms of employment in order to help reduce its spending by £230 million by 2014. This was done as part of the Council`s legal obligation to commence consultation over such changes in good time, recognising that staff may have to be reengaged on new contracts. That was interpreted by the GMB as bullying staff and putting 26,000 of them at risk of redundancy. The Council has insisted that its proposals would not lead to job losses on top of those already carried out.
So, beware the war of words in the media around these job loss estimates. The effect of the government`s cuts will only become clear over some time.