Monday, March 1, 2010

Jobless recovery in a consumer based economy…

Worst round of council job losses 'for a generation' with 25,000 predicted to go

Tony Travers, director of the Greater London group at the London School of Economics, believes that the scale of job reductions could result in "tens of thousands of posts" being lost. "Nothing like this has happened for a generation", he said. "To minimise the impacts on the public... would require massive efficiencies in all service, higher charges for many and sharing back-office staff with other public bodies."

Posted by debtfree @ 07:24 AM (2081 views)
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42 thoughts on “Jobless recovery in a consumer based economy…

  • Actually, this is wonderful. Town Halls were once tiny, but are now of ridiculous size. Islington, for example, spends over £230,000,000.

    The problem here, is that money is being diverted not into tax cuts, but into interest payments to the banks. In Islington, if they eradicated the lower two bands of income tax, this would remove just 2% of Council budget. Most money comes from central government and from the middle classes, so, Council Tax on the poor and those retired only occurs to maintain social control. I calculated that the entire poor sector of Islington is being taxed over 5% of their income to maintain about 20 jobs. But if you got rid of that tax, the private sector would create hundreds of local jobs, boarded up shows would re-open, but no, we can’t do that, but wait, I’m running for local Council and its FREE to run for local Council. Watch out buddies.

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  • That’s only 0.3% of the public sector work force. We could lose that just by cancelling a portion of the vacant jobs list. When you factor in annual retirements, they’ll actually be hiring substantial numbers this year.

    If we are only going to lose 25,000 from public sector employment then any significant HPC could be stillborn. UK banks have chewed through about 70% of their potential bad debt portfolios, so they’ll start lending again next year.

    Only legislation and fair property taxation can now make housing more affordable. I suggest that HPC’ers start campaigning for that. Talking nonsense about derivative meltdowns, conspiracies and social unrest is a useless and diversionary activity. I would suggest that anyone who wishes to continue ranting about these off-topic things, on an HPC site is harming the cause. HPC’ers need to form a credible voice or at least back a political body that champions their cause. The conspiracy loons, who have parasitically attached themselves to this site, bring nothing but scorn and ridicule to the HPC cause. Perhaps that is the real conspiracy.

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  • contrails are not a conspiracy (formerly npnh) says:

    Bwaaaaaaaaaa! *spits coffee over screen*

    FMP running for council? Ha ha ha ha ha splutter.

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  • “UK banks have chewed through about 70% of their potential bad debt portfolios, so they’ll *start lending again next year.*”

    “Only legislation and fair property taxation can now make housing *more affordable*”

    ———————————–

    So, banks are going to start lending again while houses remain unaffordable… Who are they going to lend to? Only those that CAN afford to buy a house?…So why wait until next year? I just can’t figure that one out, I’m not taking a swipe at you Flashman but house prices have been rising for around 10 months so are you implying that when banks “really” start lending they will double again from today’s prices?

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  • mark wadsworth says:

    What Flashman says.

    If I were in charge, all the carers and social workers and coppers and so on would know their jobs are safe, that must be made clear.

    … but all the street football co-ordinators, economic policy and climate change advisors, race relations nonsense and executives, directors etc. (as well as anybody paid over £50,000) might as well start looking for another job right now.

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  • estrader: “are you implying that when banks “really” start lending they will double again from today’s prices?”

    Why did you warp my quote by adding the “really”?

    I actually said:

    “UK banks have chewed through about 70% of their potential bad debt portfolios, so they’ll start lending again next year”.

    No sane person could possibly translate the above quote as implying that house prices “will double again from today’s prices”.

    “So, banks are going to start lending again while houses remain unaffordable”

    I was actually talking about general lending but you are making the classic mistake of thinking that house prices are universally “unaffordable”. They might be unaffordable to you but plenty of people can afford them. The banks do lend to these people and are most definitely planning on lending more to them when they have cleared a bit more crap from their books. However, business lending is the real area set to gain from increased lending

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  • mark wadsworth: I have been looking closely at UKIPs housing policies. I have struggled with my decision to vote for them because I am more or less a socialist but I think I will take the plunge. Thus far, they are the only party that has said anything sensible about affordable housing. House price affordability is intricately and infinitely linked to our ability to create sustained economic growth. I would strongly suggest that HPC’ers consider abandoning their traditional political allegiances, in favour of a party that might actually do something about house prices

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  • Am I the only person who thinks 25,000 job losses is far too low?

    (Oh well, I guess it’s like the Turkey’s before xmas)

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  • 25,000 is more likely the minimum, plus you have cuts and higher charges which isn’t a very nice combination.

    Then you have to take into account outsourced contracts that the councils have with private companies.

    All in all, if the employee in an average sized family is the main bread winner, this will have an impact on well over 150,000 people, maybe even more.

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  • Plus you have the impact of less tax revenue, not just on wages, but what the now jobless person would have spent money on. And on top of that you now have more social benefits to provide. The knock on effect is huge, especially if they can’t find employment.

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  • [email protected] – no you definitely are not!

    If this is 25,000 out of the 256,000 employee base, then that is less than 10%, which is less than average annual attrition in the UK. where’s the news there then?

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  • timmy t: and it’s over 3 to 5 years, so basically, no one is getting laid-off.

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  • Mark Wadsworth,

    You say you would let all the coppers know there jobs are safe but put those earning over £50,000 in fear of their jobs.
    Do you mean £50,000 before coppers indexed linked , only partially funded , final salary pensions are taken into account?
    It is possible for even a top grade constable to exceed the equivalent of a £50,000 private sector pay package once pension, housing assistance and other benefits are being taken into account. Whether they are promoted to sergeant in their last year of service or not.
    Of course we need to pay our police a good wage so they don’t have to resort to supplementing their wages with bribes but not almost twice the median rate of pay surely for one of the few remaining secure jobs in the country?
    Either I need a reality check or the public sector do.

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  • flashman – if you assumed their attrition was 8% as it’s public sector, thats over 20,000 leaving annually anyway – so its not just that nobody is getting laid off, they would actually need to get hiring!!

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  • timmy t: exactly

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  • Lol flashman, UKIP is the way to go. The two party system that is set to sell our country down the river will probably win through.

    Good little boys!

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  • timmy: Also, the attrition numbers will almost entirely consist of retirees with healthy pensions and employees who leave because they got a private sector job. All of these people will continue to be economically active. Like you say, where’s the news?

    Even if these retirees and job leavers weren’t available, a sizeable annual dent can be made in the payroll by sacking people with their hand in the till, or who are caught pissing on a councillors parking spot etc.

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  • mountain goat says:

    @Flashman – “The conspiracy loons, who have parasitically attached themselves to this site, bring nothing but scorn and ridicule to the HPC cause. Perhaps that is the real conspiracy.”

    Well said.

    “Only legislation and fair property taxation can now make housing more affordable.”

    I was chatting to a relative yesterday and was a bit surprised how wide spread the attitude is now that the houseprice bubble is the cause of our economic problems. But perhaps it is a bit like eating at MacDonalds. You know it is bad for you but you love it anyway.

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  • mark wadsworth says:

    Simon, good points.

    What I said, and what I meant, was that their JOBS were safe, not the high rates of pay 🙂

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  • MW “(as well as anybody paid over £50,000) might as well start looking for another job right now.”

    Does that include private sector workers too?

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  • mountain goat says:

    TC – point taken. Just illustrating a point. Whatever is your poison, yours is Absinthe as I recall?

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  • Police constables pay scale goes up to ~£36500. Even if employer pension contribs are pretty generous, I’d be surprised if it made £50k. As for other benefits, I’m not sure they exist now.

    On the subject of benefits, I know of no public sector employer that offers private medical insurance, company cars, first class travel or any of the other benefits common in the private.

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  • 14. Simon said…

    “You say you would let all the coppers know there jobs are safe but put those earning over £50,000 in fear of their jobs.
    Do you mean £50,000 before coppers indexed linked , only partially funded , final salary pensions are taken into account?
    It is possible for even a top grade constable to exceed the equivalent of a £50,000 private sector pay package once pension, housing assistance and other benefits are being taken into account. Whether they are promoted to sergeant in their last year of service or not.
    Of course we need to pay our police a good wage so they don’t have to resort to supplementing their wages with bribes but not almost twice the median rate of pay surely for one of the few remaining secure jobs in the country?
    Either I need a reality check or the public sector do.”

    Your making a judgement here on what a policemen is worth. What’s your basis for that judgement? Presumably your ire is that £50K is more than you get? In that case, sign up to be a constable?
    Since the market is reckoned by many on here to be a good indicator of pay, then one must wonder what a police constable might get in a privatised police force. You clearly think it would be less than it is now, yet you don’t seem to be signing up even for this current figure of £50K and I doubt anyone else on here will either.
    Now since the market value is determined by the scarcity or otherwise of willing/suitable candidates, what does that say about your argument?

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  • There’s this constant argument that the private sector represents better value for money and that somehow the sole decider of this is public sector pay, which, again judging by the prevailing opinion on here, is ALWAYS more than the private sector and could/should be reduced.
    Using the example of British Rail, drivers pay increased under privatisation and in addition passenger numbers and train conditions improved.
    So were train drivers under BR good value or not?

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  • ontheotherhand says:

    Somehow the Brits think we’re different, that there’s something around the corner that will save us all so we just need to keep spending on the credit card till then. Compare this to cuts in Ireland or the US where states are shutting libraries one day a week, stopping buses, repossessing police cars, cutting teacher salaries.

    Any talk by Tories of cutting ever so slightly faster than Brown sends the polls in a spin as all the Turkeys get together to vote against Christmas.

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  • mountain goat says:

    @ontheotherhand – agreed

    Cutting public sector workers is really about cutting the entitlement culture we have.

    At my allotment site the council decided to make one of the neglected allotments into a “community garden” on compassionate grounds. This required funds of several thousand £ because an arborist was hired in and community service persons (convicts to me) with an over-seer were shipped in to clear the site. Many of us offered to do it ourselves, but no it had to be done “properly” so we could have school visits, disabled access etc. There are all sorts of ridiculous positions created in the public sector but why? Perhaps we should look at month long media campaigns when one case of child abuse is missed by the authorities. Or the ambulance chasers who get you rewards when you trip over a crooked sidewalk stone.

    This is one of the few countries with free health care.

    Are we ready to give up these entitlements? To me this is the real debate, not whether public service sector workers should earn as much as the private sector, although that is obviously significant as well.

    The entitlement debate is linked to the whole issue of living beyond our means. Going into irreparable debt as individuals and a country. There is a bubble in mentality, an entitlement mentality, not just a bubble in houseprices. The government is simply doing what the average person wants.

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  • For the full survey download this Excel file – don’t know why it’s not html or pdf, I guess the BBC think everyone has Excel :/

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  • MG – agreed. Reminds me of a debate on 5live a couple weeks ago. Jobcentre refused to advertise a job because it stated candidates must be reliable, and this discriminated against unreliable people. You seriously couldn’t make it up!

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  • Regarding the discussion about if this /really/ means cuts beyond attrition, the actual question posed was:

    “Question 5: Excluding schools, how many employees (full time equivalent) do you have now and how do you expect that number to change in the next 3-5 years?”

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  • I suspect that these councils are indulging in a bit of “budget hunting”. They have no idea who the next government will be and they certainly don’t know what their budgets will be in 2015. It’s natural for any department (private or public) to be dramatic when faced with the possibility of cuts. It’s certainly in their interest to scare the public into supporting them. There might be larger or smaller cuts but there is no way that these councils really know what the future holds for them, in 3 to 5 years time

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  • flash – yes… note also that the survey was carried out by the BBC

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  • 51ck: Thanks for the excel link. It helped me see it, for what it was

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  • OTOH:”Compare this to cuts in Ireland or the US where states are shutting libraries one day a week, stopping buses, repossessing police cars, cutting teacher salaries.”

    Is this what you think should happen in this country? I hope we are different to the US, a country which is one of the most unequal in the world, jails something like 1% of its male population (10% if black), which, by the way, works inside for nothing; allows a large proportion of its citizenry to go without health care, live in tents ……

    The prejudice against the public sector here – mostly reiterating the tabloid tirades – is senseless. We use public services and we have to pay for them through taxation. What all this stuff against policemen’s, teachers’, council workers’ pay is really saying is that all these people should do it for free or for a pittance. Okay, so the country is in a bad way financially. And whose fault is that? – a collection of highly paid individuals who are still paying themselves large amounts effectively at the taxpayers expense. Raise taxes on them first; redistribute income from the big earners who have demonstrated that they don’t earn their money. Then start cutting public expenditure.

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  • Rich Kightley says:

    Surely they mean 250,000 jobs, must be a printing error….

    We will not notice their abscence as their efforts on basic services are so pathetic.

    I have had contact with Social Services who seemed intent on generating vast amounts work and expenditure for hysterical reasons often leaving families broken and devastated.

    This usually turns out to be an a**e-covering exercise at the expense of the public purse.

    The rule is-keep your job at all costs-never put your name to anything-keep mum about dodgy dealings. When you can, have some fun by treating the public like a child pulling off the legs of a spider.

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  • ontheotherhand says:

    letthemfall No I don’t and I’m sure nobody in the US does, but they have been forced to do it because things are so bad. My question is why do we feel in Britain that we are immune and that we just need to sit tight till the boom comes back? What’s going to come along to get us out of this hole? I’m not picking on public sector workers, I’m just looking at things that governments spend money on and where they will have to make horribly difficult decisions to save money that we just don’t have. I assume some of these cuts will be in the hundreds of thousands of public sector jobs that were added by Labour. They can also cut benefits and that’s difficult too. They can’t save money by firing true private sector workers though, in fact it would cost them if they could. Perhaps this is why the ‘tabloid tirades’ can only be about things the government spends money on – public sector workers and benefits.

    I earn my money exporting accounancy services and creating jobs here. Because I work in London the pay seems high compared to the national average, but my lifestyle is a second hand car, no holidays, and a rented house of course! I used to aspire to work really hard and get a bonus that would get me over 100k, but at that level the government will keep 66% so I won’t bother. I don’t appreciate having my hard effort ‘redistributed’ to buy votes from people who feel entitiled to take rather than give.

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  • vacuouspolitician says:

    …a wolf in sheep’s clothing

    Spoon Jar Jar Spoon

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  • I’m glad to see that you’re still visiting the site, Flashman.

    “Only legislation and fair property taxation can now make housing more affordable. I suggest that HPC’ers start campaigning for that.”

    I have never seriously entertained the idea that this site can change the course of one of the biggest asset bubbles in history (nomatter what Kirstie Allsopp said about us.)

    The HPC ‘message’ is politically toxic. If we have to make a case about national policy then we’re stuffed.

    “Talking nonsense about derivative meltdowns, conspiracies and social unrest is a useless and diversionary activity.”

    Well I for one think it’s possible that we’ll see some unhappiness about the state of the country expressed publicly. Let’s hope things don’t get out of hand.

    Perhaps part of the problem with the site is that there isn’t much new to say now. We just have to wait and see how events play out.

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  • [email protected] “On the subject of benefits, I know of no public sector employer that offers private medical insurance, company cars, first class travel or any of the other benefits common in the private.”

    Maybe not but how many private sector employers offer final salary pensions? Those FS schemes that still exist in the private sector are not paid for by people who do not work for that organisation in the manner of public sector FS schemes.

    That’s the iniquity of public sector employment, subsidised by other people’s money.

    Which sector do you work in?

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  • OTOH: I don’t understand your point about Govt firing true private sector workers. So you can work really hard and get £100k. Legions of people work really hard and get £15k. And you’re complaining about paying higher rate tax!

    mr g. I’ve worked in both sectors so have some idea what I’m talking about, whereas I suspect you haven’t, which is why you are trotting out the usual cliched rubbish about the public sector being subsidised. Tell that to the nurses when you have to go into hospital, to the road menders who fill the potholes in the road you drive down. Tell them they are not worth the money they earn. Can you not understand that you pay for the services you receive. Same as presumably you were paid for the work you do or did.

    Incidentally, quite a few companies still offer FS schemes, even though they are rapidly closing. The real iniquity is the failure of private secot pension schemes to manage them properly. Still, I think you have little interest in reasons or argument.

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  • Shipbuilder, thanks for your reply.

    You asked) Your making a judgment here on what a policemen is worth. What’s your basis for that judgment?

    The basis is there was no problem recruiting them 3 years ago and now with the tragically almost certainly permanently reduced prospects in the private sector there is no longer any need for the police force to compete so hard with the private sector for candidates.

    Police still have to be paid a very competitive wage to retain them because they cost an awful lot to train.

    Corporation and income tax receipts are a long way down and will stay that way so cuts have to be made somewhere.

    The country should be working towards each generation paying for their own pension. Since public sector pensions are not fully funded we are saddling future generations with a proportion of the payments and an even higher proportion of the risk.

    You asked ) Now since the market value is determined by the scarcity or otherwise of willing/suitable candidates, what does that say about your argument?

    It’s an employers market now yet the terms and conditions on offer for policeman have not been reduced. All this says to me is that police pay is not subject to normal market forces.

    We need good public services and need to pay for them. That benefits everyone in whatever sector.

    To afford this we’ve got to be prosperous but even with the governments most optimistic projections it is going to be 4 years before we even halve the rate we are falling further into debt by which time we’ll be at least 86 billion deeper in debt than we are now.

    The choice is cutting where you can now or being forced to cut more savagely later like Ireland were.

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  • [email protected] “I think you have little interest in reasons or argument”

    Why do you have such an arrogant approach to people who disagree with your views?

    I’m amenable to any point of view which is presented in a reasonable manner.

    Whilst that doesn’t mean that I have to agree with it, I respect other people’s right to express their views.

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