By Lucy Phillips
9 April 2010
Conservative plans to cut the public sector payroll by up to £2bn within a year would cause widespread damage to public services, critics have warned.
The Tories have pledged to make £12bn of efficiency savings during 2010/11 on top of the £15bn already planned by Labour. Between £1bn and £2bn of these will be achieved through a recruitment freeze and using less agency staff, according to an interview with Sir Peter Gershon, the Conservative’s chief efficiency adviser (who used to advise Labour on the same matter), in today’s Financial Times.
However, Colin Talbot, professor of public policy and management at Manchester Business School, told Public Finance that the savings equated to between 20,000 and 40,000 job losses across the public sector. ‘The damage it will do will be quite extensive because they’re doing it by freezing recruitment and it’s completely random where the vacancies occur. Whether it’s a finance director or an IT specialist, it means you can’t replace them,’ he said.
Talbot added that frontline services were ‘bound’ to be affected, although it was unclear if the jobs freeze would apply only to civil servants or the whole of the public sector. He expected prison officers, job centre staff and tax collectors to be particularly vulnerable.
The Tories have stressed that staff costs would be cut without compulsory redundancies wherever possible, and they are maintaining their commitment to protect frontline jobs.
The efficiency savings put forward by the Conservatives have been in the spotlight since party leader David Cameron said a Tory government would scrap most of Labour’s planned rise in National Insurance. Cameron’s move, backed by over 80 business leaders, has prompted the biggest row of the election campaign so far. The efficiency savings outlined by Gershon, which also include cutting back on IT projects and negotiating better procurement contracts, are aimed at counteracting the £7bn expected to be raised from higher National Insurance contributions.
Talbot said the Tory’s total efficiency package of £27bn equated to 9% of spending on public services, which he branded ‘ridiculous’. But he criticised both parties for failing to deal with the government’s £167bn deficit. ‘One of the ironies of this is both main parties are ready to trade punches over efficiency savings but they keep avoiding the main question of what they are going to cut,’ he added.
Public sector unions reacted angrily to the Tory proposals. Unison said that failure to implement the National Insurance rise would ‘pile pressure on the NHS and other public services, who will pay the price with swingeing cut backs’. General secretary Dave Prentis said: ‘The NHS is not for sale and we cannot afford to waste precious public money bumping up the balance sheets of big business.’
9 April 2010
Conservative plans to cut the public sector payroll by up to £2bn within a year would cause widespread damage to public services, critics have warned.
The Tories have pledged to make £12bn of efficiency savings during 2010/11 on top of the £15bn already planned by Labour. Between £1bn and £2bn of these will be achieved through a recruitment freeze and using less agency staff, according to an interview with Sir Peter Gershon, the Conservative’s chief efficiency adviser (who used to advise Labour on the same matter), in today’s Financial Times.
However, Colin Talbot, professor of public policy and management at Manchester Business School, told Public Finance that the savings equated to between 20,000 and 40,000 job losses across the public sector. ‘The damage it will do will be quite extensive because they’re doing it by freezing recruitment and it’s completely random where the vacancies occur. Whether it’s a finance director or an IT specialist, it means you can’t replace them,’ he said.
Talbot added that frontline services were ‘bound’ to be affected, although it was unclear if the jobs freeze would apply only to civil servants or the whole of the public sector. He expected prison officers, job centre staff and tax collectors to be particularly vulnerable.
The Tories have stressed that staff costs would be cut without compulsory redundancies wherever possible, and they are maintaining their commitment to protect frontline jobs.
The efficiency savings put forward by the Conservatives have been in the spotlight since party leader David Cameron said a Tory government would scrap most of Labour’s planned rise in National Insurance. Cameron’s move, backed by over 80 business leaders, has prompted the biggest row of the election campaign so far. The efficiency savings outlined by Gershon, which also include cutting back on IT projects and negotiating better procurement contracts, are aimed at counteracting the £7bn expected to be raised from higher National Insurance contributions.
Talbot said the Tory’s total efficiency package of £27bn equated to 9% of spending on public services, which he branded ‘ridiculous’. But he criticised both parties for failing to deal with the government’s £167bn deficit. ‘One of the ironies of this is both main parties are ready to trade punches over efficiency savings but they keep avoiding the main question of what they are going to cut,’ he added.
Public sector unions reacted angrily to the Tory proposals. Unison said that failure to implement the National Insurance rise would ‘pile pressure on the NHS and other public services, who will pay the price with swingeing cut backs’. General secretary Dave Prentis said: ‘The NHS is not for sale and we cannot afford to waste precious public money bumping up the balance sheets of big business.’
