GEORGE Osborne’s spending plans are keeping closely to schedule because of the unexpectedly rapid cuts in public sector jobs, according to a PwC report out today.
This time last year the Office for Budget Responsibility forecast 400,000 state jobs would be lost by 2015-16.
But local authorities anticipated this before the 2010 election, and began the process early. That means 290,000 jobs were cut in the 18 months to June 2011, the report said.
“By now the figure is over 300,000,” chief economist John Hawksworth told City A.M. “Natural wastage, as staff leaving are not replaced, goes a long way towards cutting headcount, but job losses accelerated in quarter three.”
“The government has a good chance of meeting its target of eliminating the structural deficit by 2015-16, despite the slowdown in economic growth to one per cent this year.”
Progress made so far means “there is room to slow down capital spending cuts” to provide a minor fiscal boost.
One problem remains the government’s communications strategy, the report found.
“The government must explain there is no miracle policy to create jobs – it is the private sector which boosts employment,” Hawksworth said.