REC response to Chancellor’s Comprehensive Spending Review
Today's Comprehensive Spending Review has confirmed there will be a significant impact on jobs in the public sector. Following the Chancellor's announcement, the REC has issued an initial assessment of what this will mean for recruiters.
Key points in today's Spending review include:
- 490,000 public sector worker jobs to be lost over the next four years, mainly through natural attrition but there will be unavoidable redundancies
- increase in investment on adult apprenticeships by 50 per cent – resulting in 75,000 new adult apprenticeships
- Support for jobs in low-carbon economies
- 'Work Programme' to provide intensive support for those looking for employment with the budget for this coming from a reduced benefits bill.
- New universal credit to be introduced over two years and benefits to be capped
- The new economy which has created 178,000 new jobs in the past three months to be one of the drivers for private sector job creation.
Tom Hadley, the REC’s Director of Policy and Professional Services, said:
"Temporary staff have been a first casualty of the cuts with an estimated 120,000 assignments terminated over the last few months.
"Ringfencing the budgets for health and education will mean that flexible staff will continue to play a major role in delivering front line services in these areas. However, there is no doubt that overall demand for both permanent and temporary staff in the public sector will be hugely impacted.
“In the longer term, public bodies will be forced to become leaner and to fundamentally reform the way that many services are delivered. Flexible staffing arrangements will need to become an intrinsic element of cost-effective resourcing strategies. The REC will continue to drive a targeted campaign on this issue and to argue that using temporary, contract and interim management staff is part of the solution, not part of the problem.”
Commenting on some of the immediate implications for recruiters, Hadley concludes:
"The REC's public Sector Summit last April was geared towards providing recruiters with an initial heads-up in terms of potential impact. Agencies specialising in the public sector have been looking to spread their risk by moving into different sectors and international markets.
"The REC will continue to provide tailored business support services to facilitate this process. At the same time, we will also continue to fight our corner in terms of the ongoing role that temporary staffing and the acquisition of new talent can play during this period of seismic change within the public sector.”
The REC will be issuing more detailed analysis of what the spending review will mean for recruiters. To see the reaction from the sector groups on specific issues, go to http://www.rec.uk.com/press/news/1276