Osborne's austerity drive cut 270,000 public sector jobs last year

ONS says 71,000 jobs were cut from education and nearly 31,000 from the NHS as public sector workforce shrank to 5.94 million

Heather Stewart; guardian.co.uk, Wednesday 14 March 2012 12.05 EDT

http://www.guardian.co.uk/business/2012/mar/14/osborne-austerity-270000-public-sector-jobs

More than 30,000 NHS workers and 71,000 in education were among more than a quarter of a million public sector staff who lost their jobs in 2011 as the government's austerity measures started to bite.

Official figures revealed that a total of 270,000 posts were cut from the public sector payroll last year, reducing the workforce by almost 7%, to 5.94 million.

Dave Prentis, general secretary of the public sector union Unison, said: "It is clear that we are not all in this together. Since the coalition came to power, one public sector job has been lost every 2 minutes and 18 seconds. That's 625 public sector workers joining the dole queues every single day. The government urgently needs a credible plan for growth and recovery."

The Office for National Statistics published the tally of public sector jobs alongside the latest unemployment figures, which showed that the flatlining economy is still taking its toll on the labour market.

Unemployment continued rising in the three months to January to hit its highest rate since 1995, with the number of people out of work on the government's preferred International Labour Organisation measure increasing by 28,000, to 2.67 million. That compared with a 45,000 rise in the three months to December.

The more timely claimant count measure of unemployment also rose: there were 1.61 million people claiming unemployment benefits in February, up 7,200 on a month earlier.

Malcolm Barr, UK economist at JP Morgan, said: "While the labour market data do not have the look of an economy in or close to recession, nor do they send a clear signal that the economy is either already accelerating or is about to do so."

Employment minister Chris Grayling said: "The international economic outlook remains difficult but we will do everything we can to help the unemployed find jobs."

With women disproportionately represented among the public sector workforce, the Fawcett Society calculated that more than 80% of the increase in unemployment in the latest quarter came among female workers. Women's unemployment is now at a 25 year high.

Anna Bird, Fawcett's acting chief executive, said: "With one week to go until the coalition's third budget, these latest unemployment figures show beyond doubt that women are bearing the brunt of measures to reduce the deficit."

Over the year as a whole, there was scant evidence that private sector hiring is soaking up the jobs lost through austerity measures, as the government hoped: a total of 226,000 new jobs were created in the private sector.

The most recent figures, covering the final quarter of the year, were more hopeful: in the three months to December, the public sector payroll declined by 37,000, while over the same period, 45,000 jobs were created in the private sector.

However, Tony Dolphin, chief economist at thinktank the Institute for Public Policy Research, said recent business surveys had suggested many firms still remain wary of hiring.

"Contrary to the government's hopes, its tough fiscal stance has not led to a resurgence of activity in the private sector. On the contrary, companies have responded to talk of austerity by becoming more cautious.

TUC general secretary Brendan Barber also pointed out that many of the new posts being created in the economy are part-time. "The rise in employment is encouraging, but the new jobs being created are mainly part-time. These jobs are not paying enough to replace the full-time earnings that people need."

Wednesday's data also underlined the squeeze facing Britain's struggling households, with pay growth sliding sharply. Average earnings excluding bonuses were 1.7% higher than a year ago in the three months to January, down 0.5 percentage points on the three months to December. Excluding bonuses, pay growth was 1.4%. This lower number suggests the bonus round in the City — which is large enough to skew the national average — has been weaker this year than in 2011, though full figures won't be available until later in the year.

Alastair Hatchett, of pay analysis group Incomes Data Services, said: "During much of 2011, pay growth in the finance and business services sector was at or around 5% and one conclusion we reached was that this was partly driven by more senior people getting higher salary increases as a partial offset for the planned reduction in bonus levels. These latest figures would tend to bear this out."

The unemployment crisis among Britain's youngest workers has also continued, according to the ONS. The number of 16-to-24 year olds out of work hit 1.04 million, taking Britain's youth unemployment rate to 22.5%, the highest since records began in 1992.

Liam Byrne MP, Labour's shadow work and pensions secretary, responding to the latest unemployment figures, said: "Britain's jobs crisis shows no signs of letting up, yet complacent ministers are failing to act.

"The surge in women's unemployment is reaching shocking levels but instead of helping more families into work, next month's cuts to tax credits are set to make thousands better off if they quit their jobs and start claiming out of work benefits.