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Private firms offsetting public sector job cuts


Unemployment in the UK fell by 36,000 to 2.46 million in the first quarter of the year, according to figures released by the Office for National Statistics (ONS) today.

Although the number of people claiming jobseekers’ allowance grew between March and April, there was a healthy overall employment rise quarter-on-quarter, suggesting that private enterprise job creation is compensating for redundancies caused by government cuts to public sector employers.

Economic research group Capital Economics (CE) said that today’s data represented “mixed news” for the UK, which is currently experiencing a period of constrained wage growth and the highest inflation rate for two-and-a-half years.

Jonathan Loynes, Chief European Economist at CE, said: “The claimant count measure of unemployment rose by 12,400 odd in April which, along with an upward revision to March’s figure, pushed the unemployment rate on that measure up to 4.6 per cent - the first rise since January 2010.

“But this seems partly to have reflected recent benefit changes for lone parents.

“Note that the broader international labour organisation measure of unemployment fell by 36,000 in Q1 in response to a healthy 118,000 rise in employment. For now then, job creation in the private sector is more than offsetting job losses in the public sector.”

The ONS’s data revealed that the number of unemployed men fell by 31,000 on the quarter to reach 1.43 million and the number of women without a job dropped by 5,000 to reach 1.03 million.

Long-term unemployment rose though, with 850,000 people having been out of a job for more than a year - the highest figure since the three months to January 1997.

UK retail is often seen as one of the private industries well positioned to soak up job losses from the public sector, and the latest British Retail Consortium-Bond Pearce Retail Employment Monitor shows that this has happened to a certain extend this year, with 3,400 more full-time UK retail jobs in the first quarter of 2011 compared to the same period in 2010.

Measures to help unemployed people are also being implemented at Westfield Stratford City shopping centre, which will be the largest urban shopping centre in Europe when it opens its doors for business on September 13th this year.

Retailers occupying space at the site such as department store group John Lewis are actively involved in the centre’s Retail Academy, which initially aims to place 2,000 long-term unemployed people into new jobs before playing a crucial role in helping local citizens find work in the months ahead.

Talking to Retail Gazette last week, Westfield Stratford City Development Director John Burton said: “The local east London community will welcome the arrival of the shopping centre later this year.

“It’s a life-changing event for many of them, with opportunities for work and leisure.”

Published on Wednesday 18 May by Editorial Assistant

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