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Monday, 1st February 2010

The widening public-private divide

Peter Hoskin 3:16pm

The growth of the public sector isn't exactly new news, but the figures attached to it are always pretty eyecatching.  These courtesy of Allister Heath in City AM:

"MORE evidence of a growing public-private divide: 57 per cent of extra UK jobs created during 1997-2007 were either officially on the government's payrolls or 'para-state', technically private but dependent on government funding. And that was before the private sector jobs bloodbath since 2008.

Manchester University's Centre for Research on Socio-Cultural Change calculates that of the 2.24m net new jobs created in 1997-2007, 1.27m were state or para-state (the latter includes the likes of rubbish collecting, government funded private nursery education and private healthcare and various consultants) including an astonishing 81 per cent of the 1.1m extra jobs taken by women.  In the North East, 79 per cent of new jobs were state-dependent, compared with 41 per cent in London and the South East, both still bastions of private enterprise. There was a net drop of 37,000 private jobs and a 105,000 rise in state and para-state jobs in the West Midlands."

As Allister goes on to say, the sheer size of the public sector payroll threatens to be one of the biggest impediments to getting the deficit down.  In which case, it's mildly encouraging that policymakers seem to be moving in the right direction on this.

Filed under: Labour (2143 more articles) , Private sector (41 more articles) , Public finances (753 more articles) , Public sector (118 more articles) , UK politics (5406 more articles)

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pete-s

February 1st, 2010 3:31pm Report this comment

Goto the University of Cambridge, Institute of Manufacturing, this shows that between 1997 and 2007, Labour lost 1.5M manufacturing jobs, 4.5M down to 3M. Don't remember labour shouting about that statistic.

Dennis Churchill

February 1st, 2010 3:39pm Report this comment

I often wonder what proportion of our workforce would be employable outside the public sector.
An education system that advocates Prizes for All and a political culture that equates Equal Opportunities with Equal Outcomes hardly prepares workers for an environment where success and profit are the only criteria used.

GHS

February 1st, 2010 3:41pm Report this comment

And weren't a large percentage of these 'new' jobs taken by immigrants?

David Lindsay

February 1st, 2010 3:47pm Report this comment

There isn’t really a private sector, as that term is ordinarily used. Not in any advanced country, and not since the War at the latest.

Take out bailouts or the permanent promise of them, take out central and local government contracts, take out planning deals and other sweeteners, and take out the guarantee of customer bases by means of public sector pay and the benefits system, and what is there left?

They are all as dependent on public money as any teacher, nurse or road sweeper. Everyone is.

And with public money come public responsibilities, including public accountability for how those responsibilities are or are not being met.

Billericay Dave

February 1st, 2010 3:48pm Report this comment

Someone please make an issue of this little gem http://www.redragonline.com/2010/02/more-labour-lies-exposed-unemployment.html

toco

February 1st, 2010 4:17pm Report this comment

These figures will come as no surprise to many.Coupled with virtually unrestricted immigration during the last decade, Labour has remained in office through buying captive voters.This deception like most frauds had to be exposed eventually but what a price many of us will have to pay.A start on the deficit without prejudicing any potential recovery would be to scrap unaffordable public sector pensions by bringing these into line with those in the private sector achieving a saving of in excess of £40 billion per annum.

biggestaspidistra

February 1st, 2010 4:18pm Report this comment

sounds like 'Manchester University's Centre for Research on Socio-Cultural Change' might also be contributing to the growth

michael

February 1st, 2010 4:20pm Report this comment

Labour laud themselves on having created 2 million jobs.
... By employing people? - That's hard.

How many more million immigrants have arrived in this period, and so how big
is the subsequent jobs gap?
- that's hard too.

old fogey

February 1st, 2010 5:14pm Report this comment

What I found very interesting in the article was the (passing) reference to the number of new jobs taken by women.This is an important point and should be borne in mind when the likes of Harriet Harman claims, as she did a year or so ago, that women were suffering disproportionately in the recession job cull. It is though a tricky subject, but the sensitivities involved shouldn't preclude it being discussed. On an anecdotal note, a cousin of mine, unemployed for 18 months, sees , when he goes to sign on at his job centre, rows and rows of women, with men only really represented amongst the security staff. The only really sympathetic member of staff who dealt with him was the only male whom he has had to engage with; the women generally were officious, patronising or unhelpful. Yet when just before Christmas when he had to go to his job search club, which I gather is daily attendance ( and presumably therefore not counted in the unemployment figures) in a roomful of thirty to forty searchers there was not one female ( the only females in the building were , naturally, public funded staff; receptionists, advisors, monitors, etc.). Of course this divergence will never be discussed in print or in public.

Nash

February 1st, 2010 5:24pm Report this comment

Reporters should investigate HMRC in London. Very few non-immigrants work there. A&E in London Hospitals (except for the drunks at weekends) are almost entirely immigrants.

Holly ......

February 1st, 2010 5:25pm Report this comment

Last week.
Jobs available for low pay grade £19k...0.
Jobs available for middle/high pay grade 208.
NEXT!

Chuck Unsworth

February 1st, 2010 6:15pm Report this comment

"technically private but dependent on government funding"

Or, in plain English, paid for by the taxpayer.

All this garbage about Government 'spending' and 'investing' is just deception. The fact is that it's our money which is being hosed up against the wall by these drunken (on power) lunatics.

Moraymint

February 1st, 2010 9:14pm Report this comment

" ... the sheer size of the public sector payroll threatens to be one of the biggest impediments to getting the deficit down ..."

The real issue is not the size of the public sector payroll per se, but the organised resistance there will be to downsizing that payroll. That resistance will emerge later this year and into 2011 as the next government is forced by the gilt markets to whip out the Geddes Axe.

If we've got to cut the size of the state budget by 20% - which is probably the minimum reduction if we're to stand any chance of reinvigorating the private sector and sustaining wealth creation - then the public sector has to "let go" 20% of about 7 million people.

"7 million people?!", I hear you scream? Well, er, yes if you take a look here ...

http://tinyurl.com/ylargeo

So, that's about 1.4 million people who, one way or another, have to be made available to entrepreneurs and established tax-paying businesses if we are simultaneously to cut the ruinous size of the Labour Party's state machine and start the process of creating wealth again.

How do you think the public sector unions will react to this? Therein lies the sleepless nights for Dave, Boy George and the rest of the Tory motley crew. I hope they're up for a fight, because I reckon the unions and those 1.7 million employees won't take this lying down.

Unravelling 13 years of rampant Marxism in less than half of that time could mean we're about to enter, er, interesting times.

Major Plonquer

February 2nd, 2010 2:56am Report this comment

I see that Lindsay troll is at it again - 'we're all public sector' now he drools. Just like we've all been trying to get out of the Middle Class since Prescott announced that he's now Middle Class too.

Perhaps he can explain how I can possibly be public sector. I run a small software company. I employ about 50 people. I don't do government contracts. I pay my taxes (too bloody much in taxes). 85% of my sales are overseas. I don't accept any so called 'credits' from the government. I pay my rent to a private company. I buy my utilities from private companies.

Occasionally I use the roads and, oh yes, a council rubbish collector sometimes collects my rubbish.

If this makes me public sector then you must be a clever boy. We all know the answer to that......

HJ

February 2nd, 2010 10:34am Report this comment

What is staggering is just how few state-funded jobs Labour have created, considering the money they are spending.

Leaving aside that part of the budget deficit accounted for by the recession, we have a structural public sector deficit of around £100bn. This is equivalent to employing 2 million people at an average cost of £50000 per person.

So where is all this money they are borrowing going to?

Wily Trout

February 2nd, 2010 3:44pm Report this comment

And that doesn't factor in all the people who the govt pays NOT to work.

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