Best Insurance

Can the private sector create additional 500,000 jobs in the next four years? (02-Nov-2010)

The fear has come true… public sector job losses are no longer just a threat; they will soon be a reality. It is well known that the public sector will have to shed atleast 490,000 jobs in the next four years. Politicians are hoping that the private sector will take up the slack and bridge the gap, but can they?

CIPD warned that the private sector will be hit even harder than the public sector by the spending cuts and looming increase in VAT. It estimates that the combined direct and indirect effect of public spending cuts will lead to 650,000 private sector job losses, while the impact of VAT rising from 17.5pc to 20pc will undermine profits to claim a further 250,000 jobs. It also added that the 490,000 losses forecast for the public sector appears to be an underestimate "given what most public sector managers are telling the CIPD" and excludes about 50,000 cuts likely to fall in the current financial year and 120,000 in 2015-16, the organisation said.

Dr John Philpott, the CIPD's chief economic adviser, said: "The question 'Where will the new jobs come from?' is bound to be asked for quite some time yet."

While it is debatable whether the strategy of government to cut costs at such a drastic pace is the right and should they be rather not be following the path that USA and in the recent past, Japan has followed. The fact is that these job losses are bound to happen. It has been shown time and time again in the past that when state support dwindles only the fittest and strongest survive. Stuart Boseley, Director of Best Insurance said, “it is not the time to be complacent, people who cannot depend on their savings should consider other options such as income protection and payment protection insurance and not be caught unawares. There is infact no where to go. If anyone loses their job in the current market, it is highly unlikely that they will find one immediately. So why wait for the disaster to happen, it always pays to be proactive and secure yourself”.