Small firms won’t fill jobs gap created by public sector

Fresh doubts have been raised about the ability of the private sector to fill the jobs gap created by public sector cuts, with research revealing that more than one in 10 small firms are planning to cut jobs in the next three months.  This is not good news for the Government which is relying on growth in this sector to reduce the increase in unemployment figures following the recent Spending Review

In the survey of more than 1,300 small companies by the Federation of Small Businesses (FSB), 10.4% said that they expect to decrease employment over the next three months as business confidence in future prospects and revenue growth weakened.

The net balance of businesses expecting an improvement in prospects over the next three months has seen a steady decline since the start of the year, from 16.2 % at the end of the first quarter, to 4.2 % in the second quarter and just 0.5% at the end of the third, the latest “Voice of Small Business” index shows.

More than one-third (38.1%) of respondents also reported a decline in revenues in the three months to September, suggesting that economic recovery is far from robust.

The Office for Budget Responsibility (OBR) believes that there will be a net gain in employment of 1.3 million between 2010 and 2015, driven by the private sector.

The FSB does not believe that the sector will be able to provide anywhere near enough new jobs to meet the government’s expectations and that while some growth will occur net unemployment figures in 2015 will be higher than in 200.

Personnel Today

About elaineonyc

HR generalist who is passionate about the benefits of good HR practice. Experienced in delivering strategic and operational HR initiatives to clients in both public and private sectors. Specialises in working with SMEs.
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