The long-awaited public sector job cuts now seem to be having an impact on the UK labour market. Excluding employment as a result of this year’s census, employment in the public sector fell by 97,000 between March and June. Including census jobs, public sector employment fell by 111,000 over the three months.
The deteriorating outlook for public sector workers is reflected in other labour market indicators, such as public sector pay growth and redundancies. But it is also impacting upon headline labour market indicators – unemployment is 0.3 percentage points higher in July than it was three months ago.
This re-emphasises the requirement for the private sector not only to replace the jobs lost during the recession but to offset those currently being cut in the private sector too. And as Cities Outlook 2011 showed, the private sectors of some cities, such as Newport, are likely to find it much harder to do this than others, such as Milton Keynes.