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A slowdown in the UK jobs market is hitting hiring in education and healthcare as government spending cuts bite, according to surveys that point to headcount reductions across the public sector.
Business confidence is at its lowest on record, outside the Covid-19 pandemic, according to a quarterly report by the Chartered Institute of Personnel and Development, which represents HR professionals, after increases in the minimum wage and payroll taxes took effect last month.
In the private sector, the balance of employers expecting headcount to increase in the next three months was still positive, but by the slimmest margin in the survey’s 11-year history, except in 2020.
In the public sector, employers expecting to cut headcount outnumbered those expecting to increase their staffing, with a net balance of minus 4.
The CIPD said the fall in private sector confidence was driven by large employers, and was sharpest in retail, which has been disproportionately affected by the wage and tax increases. Three in ten retailers expected headcount to fall in the next three months.
James Cockett, economist at the CIPD, said the figures showed that the government’s reform of workers’ rights would be “landing in a fundamentally different landscape to the one expected when it formed part of the Labour manifesto” last summer, urging ministers to calm business nerves by setting a clear timeline for the changes.
But the survey suggests tight public sector budgets are now as much of an issue for the jobs market as business qualms about rising labour costs.
After retail, non-compulsory education — including both universities and further education colleges — was the sector with the largest proportion of employers set to cut headcount.
About a quarter of employers in schools and pre-schools were also reducing their staffing, the CIPD said, as was one in five employers in healthcare.
Meanwhile, a downbeat survey of recruiters, published on Monday by the Recruitment & Employment Confederation, showed permanent vacancies for nursing, medical and care staff dropped more sharply between March and April than vacancies in any other sector.
The two reports follow a stark warning from NHS Providers, the membership body for NHS trusts, which said on Friday that more than a third of trusts were already cutting clinical posts in an attempt to balance their books, with a further 40 per cent considering job cuts.
Teaching unions have also warned that many school heads are cutting staff numbers after being told they would have to fund any uplift in pay from their existing budgets.
Research published last month by the Teacher Tapp app and SchoolDash, an education data analytics firm, found teacher recruitment was running well below levels seen in recent years because of “serious budgetary pressures” as well as falling pupil numbers in London.
