Can a public sector recruitment drive solve the looming UK unemployment crisis?

Analysis: An aim of the government’s hiring policy is to help deal with an expected surge of unemployment as the Treasury winds down its jobs furlough scheme. But how likely is this to succeed? Ben Chu investigates

Economists see a public sector recruitment drive as welcome, but mainly as a way of improving the quality of the UK’s public services rather than a means to boost overall employment in this historic recession (Getty)

Boris Johnson has said his government is planning a major public sector recruitment drive. “Together, we are on a mission to build back better – protect our NHS, make our streets safer, educate the next generation and unleash Britain’s potential,” the prime minister said this week.

However, another apparent aim of the policy is to help deal with an expected surge of unemployment as the Treasury winds down its jobs furlough scheme.

The Office for Budget Responsibility has projected that unemployment will shoot up to 4 million by the end of the year, levels even higher than seen in the 1980s recession.

But how likely is this to succeed? Is it realistic to expect the newly unemployed to move into public sector positions such as teaching, policing and the prison service?

What new jobs are the government creating?

The Tory manifesto in December pledged to recruit an extra 20,000 police officers, 50,000 more nurses and 6,000 more doctors in GP surgeries.

It also pledged to boost teachers’ starting salaries to £30,000 by 2022 to help with retention.

The Department for Education has approved more than 3,000 university places to train extra nurses.

On top of this, there are plans to recruit 1,000 additional probation officers.

What has happened to public sector job numbers in recent years?

The shadow chancellor, Anneliese Dodds, was scathing about Mr Johnson’s proposals, arguing that the reason the prime minister needs to launch a recruitment drive in the first place is that “Conservative governments have cut our public services to the bone”.

On the face of it, the Conservatives presided over the loss of a million public sector workers in the decade of austerity that began in 2010.

The official number of public sector workers peaked at just under 6.5 million in September 2009 and by the end of last year it had fallen to 5.5 million.

However, this was rather distorted by various factors such as the reclassification of tens of thousands of Royal Bank of Scotland and Lloyds staff as public sector workers after the lenders were bailed out by the government in 2008 and their reclassification, once again, as private sector workers in 2014 when the government’s stake in Lloyds was finally sold off.

After removing such distortions, the Office for National Statistics estimates that the number of public sector workers was 5.6 million in 2010 when the Conservatives came to power and 5.3 million at the end of last year.

That suggests a fall of 300,000, or roughly 5 per cent.

As was widely noted during the election campaign, the Conservative pledge to hire an additional 20,000 police officers would only restore the numbers to where they were a decade ago.

The number of people employed in the state education sector and the NHS actually rose over the past decade, although arguably not by enough to keep up with the rising number of school and patient numbers.

Will this actually help the overall jobs market and the wider economy?

Economists see a public sector recruitment drive as welcome, but mainly as a way of improving the quality of the UK’s underfunded public services rather than a means to boost overall employment in this historic recession.

The Resolution Foundation says there is a strong case for a big hiring drive for social care workers – jobs that are often funded by local councils – although the think tank stresses that it will need to be accompanied by better pay and conditions in order to retain staff.

Hannah Slaughter of the Resolution Foundation notes that a lot of the most vulnerable workers at the moment are in the hospitality and retail sectors and are likely to be lower skilled.

In theory, these workers could move into the public sector, but they would require training and it would take time.

“It’s not something that’s going to take off straight away when we’re expecting the crisis to hit in months,” she says.

The labour market expert John Philpott agrees, saying it’s unlikely that public sector hiring would be able to keep pace with redundancies in the private sector.

“Public sector job expansion is best seen as necessary to improve the extent or quality of public services, in particular reversing the over-sacking that occurred during the austerity years, rather than a form of counter-cyclical publicly funded job creation,” he tells The Independent.

Mr Philpott argues that a better way to boost the jobs market would be to use public resources to support private sector employment. To this end, calls are multiplying for the chancellor to rethink his plans to wind down the furlough scheme by the end of October.