710,000 jobs to go – Austerity will be the new normal

One person who won’t have been surprised by this week’s economic forecast is CIPD Chief Economist John Philpott. Last year, he predicted public sector job losses of 725,000 contradicting the Office for Budget Responsibility’s official forecast of 400,000. During a typical outbreak of select committee grandstanding, he was insulted by Tory MP Michael Fallon:

“You are less reliable than a dead octopus,” Mr Fallon told him, in an apparent nod to Paul the ‘psychic’ octopus, who won fame by correctly calling World Cup clashes.

“Actually, the octopus was pretty accurate while he was still alive,” Mr Philpott said.

On Tuesday, the OBR revised its forecast to 710,000, not far short of the CIPD estimate. Anyone who has met John Philpott will know that he is far too polite to say Ner Ner Ne Ner Ner to Michael Fallon and the OBR but he’s entitled, at least, to a wry smile this week.

Not that there is much to laugh about. 710,000 extra claimants will increase government borrowing and, as the Redundant Public Servant explains, the resulting low morale is draining the energy from public sector organisations. Even those like RPS who have found new jobs are wondering if they will be made redundant a second time.

As if that isn’t bad enough, the longer term outlook doesn’t look to bright either. Former LGA boss John Ransford’s prediction, that public sector austerity could last for twenty years, probably isn’t far off. A combination of debt and demographics will put increasing pressure on the public sector over the next few years. Many of those 700,000 or so jobs may never come back.

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