Despite Britain’s Exit from the Recession Unemployment Remains a Concern

Source: BBC News

The UK economy is facing more redundancies, with substantial cuts expected in the public sector, a report has said.

Almost one in three public sector employers plan to shed jobs this quarter, the Chartered Institute of Personnel and Development (CIPD) said.

Its latest quarterly survey found that the jobs outlook had worsened despite the UK emerging from recession.

"The UK jobs market is still on the ropes," the CIPD said.

Unemployment currently stands at 2.46 million.

The number of people out of work had been steadily rising since the summer of 2008, but saw a surprise fall in the three months to November.

The latest unemployment figures will be announced on Wednesday.

Tests ahead

John Philpott, chief economic adviser at the CIPD, said that although the number of people in public sector jobs had actually risen during the recession, the "tide was already turning".

"Despite the jobs market proving resilient in recent months, this represents a mere pause for breath with the number of redundancies easing in the private sector and spending cuts yet to be felt by large swathes of the public sector," he said.

It looks as though the trend towards outsourcing and off-shoring will continue

John Philpott, CIPD chief economic adviser

Unemployment in graphics

"Unfortunately, there are more testing rounds ahead. Alongside the spectre of deep public spending cuts, the private sector will be dealing with ongoing concerns about productivity, wage costs and inflation.

"The CIPD's survey of more than 700 employers found that firms in all sectors plan to cut 6.2% of their workforce in the first three months of 2010, compared with 3.8% in the previous quarter.

In the public sector, defence and public administration look set to be hit particularly hard.

Outsourcing fears

However, there was better news from the private sector, which expects to see staff numbers grow for the first time since the start of the recession.

The CIPD's survey also reveals that the outsourcing of jobs abroad is a concern for the employment market again.

One in 10 companies is looking to outsource jobs in 2010, with almost half of IT companies saying they would be moving jobs abroad.

India remains the most popular outsourcing destination, followed by countries in Eastern Europe.

"As things pick up it looks as though the trend towards outsourcing and off-shoring will continue," Mr Philpott told the BBC.

This would put further pressure on the jobs market in the UK, he added.