Things looking up – but not if you work in the public sector

The Chancellor’s Autumn Statement offered some good news on the economy, with the rate of growth forecast at 1.4% for 2013 and 2.4% for 2014. Those figures will be welcomed by employees in the private sector who will recognise the positive implications for their job prospects. But for public sector workers, the news was not so good, with the Chancellor indicating that he wants to extend the current freeze in total public spending into 2018-19.

The next few years are therefore likely to bring about a two-speed recovery, with the private sector moving up through the gears whilst public sector employment remains in reverse. Figures from the ONS indicate that private sector employment is now 0.5m above where it stood before the onset of recession in 2008. The public sector, in contrast, has lost 0.5m workers since its own program of austerity began in 2010. Moreover, the Office for Budget Responsibility has forecast that another 0.6m public sector jobs could be lost by the beginning of 2019, unless savings can be found elsewhere (for example in welfare spending).

These changes that have already taken place are substantial, and analysis of a national survey of employees in Britain co-authored by researchers at NIESR has shown some of the implications. The Workplace Employment Relations Survey (WERS) typically takes place every 6-7 years. In the 2004 survey there was no difference in perceived job security between public and private sector employees: roughly two-thirds agreed or strongly agreed their jobs were secure (left-hand panel in Table 1). When the latest WERS was undertaken in 2011, perceptions of job security in the private sector were at their previous level, despite the longest recession in living memory; but in the public sector perceived job security had plummeted so that fewer than half of public sector employees felt secure in their jobs. These trends fed through to employees’ satisfaction with their job security (right-hand panel in Table 1).

Table 1 – Job Security: Perceptions and Satisfaction

Source: Workplace Employment Relations Survey

These differences are stark, but there are also other indications of divergent trends between the two sectors. In particular, there are signs that, whilst managers have become more supportive of employees in the private sector since the mid-2000s, the opposite is true in the public sector. The proportion of public sector employees who judged that managers encouraged people to develop their skills fell below that seen in the private sector between 2004 and 2011 (see Table 2). There was also a decrease between 2004 and 2011 in the proportion of public sector employees who judged managers to be ‘understanding about employees having to meet responsibilities outside work’; in contrast this proportion rose among private sector employees. The table also shows that employees in the private sector in 2011 were more likely than those in the public sector to say that managers are:

• sincere in attempting to understand employees’ views
• deal with employees honestly
• can be relied upon to keep their promises
• treat employees fairly.

Table 2 – Supportive Management

Source: Workplace Employment Relations Survey

There is also supporting evidence beyond WERS of the particular situation facing public sector workers. The Skills and Employment Survey (SES) is another nationally representative survey of employees in Britain which takes place every 5-6 years. The latest survey was undertaken in 2012 and was the first since 1997 to find public sector workers more concerned about losing their jobs than those in the private sector. In the 2012 SES, public sector employees were also more likely than those in the private sector to be anxious about future reductions in their pay, skills and job autonomy.

It would probably be a mistake to think that these patterns could all be explained by the Government’s program of austerity. Some of the unease is likely to be related to a longer-running process of public service reform which saw some falls in public sector employment in the latter years of the previous Labour government. However a recent ONS infographic shows that the pace of job cuts has increased considerably since 2010.

These changes present challenges, not only for public sector employers seeking to provide services more efficiently, but also for the representatives of public sector employees. NIESR research shows that employees’ anxiety over organisational change is ameliorated when trade unions are involved. However the Government has not sought to engage trade unions in major decisions, such as the imposition of the public sector pay freeze in 2010, and shows no prospect of engaging them more actively in the long process of reorganisation that is to come. Recent NIESR analysis of the Labour Force Survey has shown that the percentage of public sector employees who belong to trade unions, and the percentage who have their pay set by collective bargaining, have both been falling over the past five years (see Table 3), and so unions are in danger of losing traction in one of the main areas where they remain comparatively strong.

Table 3 – Union membership density and bargaining coverage

Source: Labour Force Survey

The recession may be over for private sector workers but, for those working in the public sector, there are seemingly a number of years of austerity still to come. The implications for staff morale and engagement in the public sector could be profound.

Notes:

This blog summarises work done at NIESR by John Forth, Alex Bryson, Helen Bewley and Lucy Stokes.

The 2011 WERS survey was jointly sponsored by the Department for Business Innovation and Skills (BIS), the Economic and Social Research Council (ESRC), the UK Commission for Employment and Skills (UKCES), the Advisory Conciliation and Arbitration Service (Acas) and the National Institute of Economic and Social Research (NIESR). NIESR’s contribution was made possible by a grant from the Nuffield Foundation.

NIESR’s  primary analysis of WERS was undertaken in collaboration with Dr Brigid Van Wanrooy (previously of Acas and now at the Centre for Workplace Leadership in Melbourne), Dr Stephanie Freeth (Department for Business Innovation and Skills) and Professor Stephen Wood (University of Leicester).

The views expressed are those of the author and not necessarily those of the sponsors.