Unemployment figures reveal slowdown in public sector job cuts

Government plans to cut the public sector payroll appear to be faltering, as official figures revealed a sharp slowdown in job cuts across Whitehall and local government over the summer, reports The Guardian.

The number of civil servants declined by 5,000 in the three months to the end of July, and the overall drop in public sector employment was restricted to 39,000, as cuts that have reduced the civil service headcount by more than 600,000 since the financial crash ran out of steam.

Ministers heralded a 235,000 decline in the public sector payroll during the quarter, to 5.9 million, but the Office for National Statistics said the cut followed a decision to reclassify 196,000 further education and sixth-form teachers as private sector employees.

The number of health workers was higher than three years ago, at 1.55 million, and the number of teachers remained at 1.6 million, including FE and sixth-form staff. Analysts said it was becoming more difficult for ministers to find easy ways to reduce staff numbers as the coalition’s austerity plans entered a third year.

David Cameron said he was disturbed by a rise in youth unemployment and a 16-year high in the number of people out of work for more than a year.

ONS figures showed the jobless total fell by 7,000 in the quarter to July to 2.59 million, an unemployment rate of 8.1%. The number claiming jobseeker’s allowance last month was 1.57 million, down by 15,000 on July – the largest monthly fall since June 2010.

More than 100,000 people gained full-time employment and 136,000 part-time jobs were created during the three months to July, while the number of vacancies remained static.

One economist said creating 236,000 jobs in a single quarter was “a remarkable achievement at any time but in current economic conditions is near miraculous”.

John Philpott, director of the Jobs Economist, said: “Even more remarkable is the fact that the economy is adding so many jobs against a backdrop of a near static level of job vacancies. Indeed, the number of unemployed people per vacancy is slightly higher than in mid-2010. In other words, the labour market is proving really effective at filling whatever vacancies do arise even though, as a result of weak macroeconomic conditions, the economy isn’t creating net extra vacancies.”

The Olympics is believed to have played a part in boosting the figures, after a recruitment drive during June and July in London, where the ONS found the largest rises in employment. The capital accounted for 5,500 of the fall in the so-called claimant count.

The number of part-time workers increased by 134,000 to 8.12 million, the highest since records began in 1992. The number of Britons working part-time because they could not find a full-time job also hit a record high, of 1.42 million. The number of people out of work for more than a year was the highest for more than 16 years, at 904,000, up 22,000 on the previous quarter.

The prime minister said there were some “very encouraging” figures in the data, but pressed by Ed Miliband during PMQs he acknowledged: “The long-term unemployment figure is disturbing.

“That is what the work programme is designed to deal with. The work programme we have got up and running within a year has helped already 690,000 people and the key part of it is that those who are hardest to help – people on the incapacities-style benefit – and also who have been long-term unemployed we pay the training providers more to help them into work and that is the key for dealing with this problem in the time ahead.”

Miliband said the clearest evidence that the work programme was not working was the fact that over the past 12 months the number of young people unemployed for more than a year was up 247%. Cameron said it was “disappointing” that the latest figures showed youth unemployment was up by 7,000 in the last quarter, but stressed the figure included those in full-time education.

John Walker, chairman of the Federation of Small Businesses, said the continued fall in unemployment was good news, but for the economy to recover at a faster pace more people need to find full-time work. “Policies targeted at stimulating job creation, such as extending the national insurance contributions holiday, are needed to give small firms the confidence to create full-time positions and take on staff,” he said.

Unison’s general secretary, Dave Prentis, said the government needed a long-term plan of job creation to ease the UK’s economic woes. “For families suffering the misery of unemployment, any decrease will be welcome news, but it is clear when you look at the bigger economic picture that any talk of growth is premature. In areas such as Yorkshire and Humberside, and the West Midlands – where unemployment is already among the highest in the UK – unemployment continues to go up, meaning yet more misery for families struggling to get by.”