January 2010 – How did the public sector fare?
As we ease ourselves into the second month of 2010, let’s take a look at the main issues that have dominated the public sector headlines so far.
Imminent cuts in public service
This is not going away anytime soon. While the three main political parties argue about how deep the cuts are going to infiltrate (currently, the Conservatives favour cutting public expenditure, Labour favour cutting pay and slashing bonuses and the Liberal Democrats favour long term pay freezes and cutting back on future pension schemes), public sector workers all over the UK are bracing themselves for a difficult year.
Speaking on BBC One’s Politics Show recently, David Cameron, Leader of the Conservatives is alleged to have hinted that his party would make huge cuts in public spending if they form the next government. He has since denied these claims but insists that 2010 is the year to start reducing public spending in order to reduce the UK’s budget deficit which is believed to be the worst in the developed world. Meanwhile, Chancellor of the Exchequer, Alistair Darling, has warned that public sector staff will have to accept pay cuts if they want to keep their jobs. And if Darling’s grim predictions of a possible repeat recession later in the year are proved correct, the next government will have to make some tough decisions.
Social worker shortage
Partly due to the recession and the inter-related increase in domestic problems, social worker workloads are at an all time high. In light of childcare tragedies that have hit the profession in the last few years (Baby P, the Doncaster brothers scandal, to name but a few) less people are willing to enter a career so fraught with scapegoat culture and high-stress levels and many already in it are looking to leave. However, subsequent blogs on Jobsgopublic.com will address why this doesn’t necessarily have to be the case.
‘Wellderly’: increasing the retirement age
If the recent plans unveiled by Harriet Harman, Government Minister for Women and Equality, are met with approval, senior citizens over 65 (the so-called ‘wellderly’) could continue to work well into their 70s or 80s. The plans went public during London’s Age UK event in early January. While some criticise the plans as attempts to deal with the skills gap left by retired generations and to disguise the fact that pension coffers are rapidly emptying (therefore the plans would keep pension costs down), the government insists it is purely to tackle ageism and utilise the skills workforce rather than lose it. Those of you who are regular viewers of BBC’s The Thick of It (think Nicola Murray and her ‘fourth sector’ plans) will perhaps see the funny side.
University places shortage
Despite government accusations of ‘scaremongering’, the HEFCE (Higher Education Funding Council for England) has warned that budget cuts in the higher education sectors would leave thousands of prospective students without a university place. According to the HEFCE, 160,000 students who applied last year missed out on university places which will increase competition for university places this year as last year’s rejected and this year’s potential students fight for fewer places.
All in all, it’s been a trying month for the public sector with all political parties desperately trying to unveil seemingly recession-ending policies whilst criticising their opponents’ plans. This will only intensify in the next few months in the lead up to the general election and it remains to be seen who will ascend to the government throne. But until then, don’t take the budget cuts too seriously just yet. Nothing is certain until the fat lady sings. And at the moment, she’s nowhere to be seen, let alone heard.
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When you use the phrase “labor shortage” or “skills shortage” you’re speaking in a sentence fragment. What you actually mean to say is: “There is a labor shortage at the salary level I’m willing to pay.” That statement is the correct phrase; the complete sentence and the intellectually honest statement.
Some people speak about shortages as though they represent some absolute, readily identifiable lack of desirable services. Price is rarely accorded its proper importance in their discussion.
If you start raising wages and improving working conditions, and continue doing so, you’ll solve your shortage and will have people lining up around the block to work for you even if you need to have huge piles of steaming manure hand-scooped on a blazing summer afternoon.
And if you think there’s going to be a shortage caused by employees retiring out of the workforce: Guess again: With the majority of retirement accounts down about 50% or more, most people entering retirement age are working well into their sunset years. So, you won’t be getting a worker shortage anytime soon due to retirees exiting the workforce.
Some specialized jobs require training and/or certification, again, the solution is higher wages and improved benefits. People will self-fund their re-education so that they can enter the industry in a work-ready state. The attractive wages, working conditions and career prospects of technology during the 1980’s and 1990’s was a prime example of people’s willingness to self-fund their own career re-education.
There is never enough of any good or service to satisfy all wants or desires. A buyer, or employer, must give up something to get something. They must pay the market price and forego whatever else he could have for the same price. The forces of supply and demand determine these prices — and the price of a skilled workman is no exception. The buyer can take it or leave it. However, those who choose to leave it (because of lack of funds or personal preference) must not cry shortage. The good is available at the market price. All goods and services are scarce, but scarcity and shortages are by no means synonymous. Scarcity is a regrettable and unavoidable fact.
Shortages are purely a function of price. The only way in which a shortage has existed, or ever will exist, is in cases where the “going price” has been held below the market-clearing price.
Igor,
Thank you for your comments. This blog post was written from a purely neutral stance and is merely a summary of the public sector issues that have dominated the headlines in January 2010. We appreciate many observers will interpret these issues differently. We shall agree to disagree on this one.
Once again thank you for your comments.
Jobsgopublic