NEW jobs in the private sector failed to offset major declines in state sector employment in the second quarter of the year, figures from the Office for National Statistics (ONS) revealed yesterday.
With chancellor George Osborne’s austerity plans beginning to kick in, government roles were down by 111,000 in the three months to June -- the largest fall in state employment since the records began in 1999 -- while the commercial sector created 41,000 new jobs.
Not all of the public sector job losses were unexpected, however – 14,000 were staff employed on a temporary basis to work on the census.
And over six million people are still employed by the state, despite 240,000 positions being cut in the last 12 months. In the same period, 264,000 jobs have been created in the private sector.
Yet figures for the three months to July show unemployment increased by 80,000 to 2.51m compared with the previous three months -- a rise of 0.2 percentage points to 7.9 per cent and the largest spike in almost two years.
Employment minister Chris Grayling said the figures “underline the scale of the challenge we face particularly given slower growth across Europe and North America”.
Grayling pointed to measures including the creation of “enterprise zones”, expected to create 30,000 jobs by 2015, and steps to cut tax and red tape on companies as evidence of government action on unemployment.
An extra 30,000 people claimed job-seekers’ allowance in August than in the month before, a lower increase than analysts predicted.
“We anticipated a rise in the claimant count of 40,000,” said Investec’s Victoria Cadman. “Despite the smaller rise, the UK’s recovery prospects look to be negative.”
The number of people in employment also sunk in the three months to July, down by 69,000 compared to the previous three months.
Long-term unemployment increased as well, with 849,000 people now out of work for over 12 months – 51,000 more than in the previous three months.
“The government is taking the steps needed to support growth and rebalance the economy,” said Grayling. In terms of the long-term jobless, “our new Work Programme is now up and running across the country and will offer flexible support tailored to people’s needs to help them get into employment.”