The idea that private sector growth will offset public sector jobs losses, by creating new jobs, is simply not believable and in areas of the UK, such as Scotland, where there are predictions of 90,000 job losses, the impact will go much further than the immediate headcount in the public sector. Local suppliers depend on public sector contracts – everything from the corner shop that sells sandwiches to council workmen to companies selling photocopiers. Research by APSE and CLES has shown that for every £1 spent by local councils at least £1.64 is returned to the local economy.
By councils using community benefit clauses in procurement that can be doubled to £2 for every pound spent. Instead of cutting jobs which will hack out the heart of local economies we should be encouraging the state to pull the lever in supporting local economies and thus regional jobs growth and sustainable employment.
The idea that we can stimulate economic growth by moving to regional pay bargaining is equally flawed but it is increasingly clear that that is what the government, and certain employers, would want to see happen. This will lead to a race to the bottom in pay terms. Should a council in the South move its payroll services to the north east just to save a few quid? But in doing so create havoc in their own local economies. Anyone with any sense within public sector management or elected members in local government should resist this – regardless of party political allegiances. No one gets elected to govern to transfers jobs out from their own area.
There is a distinct role for councils to play in stimulating economic growth and in setting the standards for employment. The only people who will benefit from regional pay bargaining (read as regional pay cuts) will be the fat cats set to profit from the bigger public sector contracts at a cost to SMEs and workers in the local area.
Con Dem Housing and Local Government Minister Grant Shapps MP has already intimated that Best Value will be reviewed, no doubt signalling the end of the Code of Practice on Workforce Matters – regional pay bargaining is simply another piece of kit in the Tory toolbox to make working people poorer.
Now is a good time to revisit the work of APSE and CLES on the economic imprint of public service employment - which by using case studies demonstrates the value to local economies of public sector jobs:
economy. By councils using community benefit clauses in procurement that can be doubled to £2 for every pound spent. Instead of cutting jobs which will hack out the heart of local economies we should be encouraging the state to pull the lever in supporting local economies and thus regional jobs growth and sustainable employment.
http://www.cles.org.uk/files/102868/FileName/EXECUTIVESUMMARYFootprints.pdf