Public sector jobs will reduce by almost half a million over the next four years, according to figures released by Chancellor George Osborne in today’s spending review.
The estimate, set out by the independent Office for Budget Responsibility, is for public sector headcount to decrease by 490,000 as the coalition aims to cut the budget deficit.
Osborne was at pains to stress the reduction would not happen “overnight” and said much of it would come from “natural turnover” through not replacing staff once they leave.
However, he admitted there would be redundancies and left it up to the individual departments to decide where the axe would fall.
Kevin Mountford, head of banking at Moneysupermarket.com, says: “The threat of unemployment will be weighing heavily on the minds of many UK families, and not only for those working in the public sector, as there will be an inevitable impact on the private sector also.”
But Osborne cited the creation of 178,000 jobs in the UK economy during the last three months as reason to be hopeful.
The Treasury will lead by example in cutting its departmental budget by 33% he added. And in addition, government departments that have not been specifically protected will lose an average of 19% funding in the next four years.
In a bid to fulfil his pre-election promise of protecting frontline services, Osborne said no stone would be left unturned in the search for waste.
Osborne said significant savings could be made in the police by cutting bureaucracy, which wouldn’t affect the quality of frontline services. Police spending will fall by 4% each year.
Spending on the NHS and schools, on the other hand, will increase over the next four years. Health spending will increase by £10 billion from £104 billon to £114 billion and spending on schools will increase from £35 billion to £39 billion.
The chancellor added that the ring fence round certain school grants would be taken away to allow schools to allocate their budget as they wished.
However, a £2.5 billion “pupil premium” would be introduced to give “good” schools an incentive to help pupils from poorer backgrounds.