November 2, 2010

CIPD warns of 1.6 million job losses

by Jan Harris

The Chartered Institute of Personnel and Development (CIPD) today said that the government has hugely underestimated the number of jobs that will be lost as a result of the spending review.

It expects the combination of public sector spending cuts and next year’s increase in VAT to 20% to lead to the loss of 725,000 jobs in the public sector and 900,000 in the private sector.

However, the official figures from the independent Office for Budget Responsibility are for the loss of 610,000 public sector jobs by 2015-16.

The CIPD’s forecast was called ‘nonsense’ by Conservative MP Michael Fallon during a session of the Treasury Committee.

John Philpott, chief economist at the CIPD, asked Mr Fallon to withdraw the comment, but was later called ‘as reliable as a dead octopus’ by Fallon, because of his prediction last year that UK unemployment would reach 3 million during 2010.

The CIPD’s prediction of higher job losses in the private sector than in the public sector goes against the CBI’s expectations that job creation in the private sector will offset public sector job losses.

This would require the private sector to create more than 300,000 jobs a year which the CIPD is calling a ‘tall order’ given the expected growth rate for the UK economy.

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