Shrinking public sector employment outdone by private sector jobs growth

commuters B&W-2The proportion of jobs in the public sector is shrinking, driven by government cuts under its austerity plans but more largely by the growth in private sector employment.

744,000 people living in London work in the public sector, which includes the NHS, education, central government, local authorities, public bodies, the police and the armed forces. That is 15.3% of the workforce and one of the lowest rates in Britain. The average for England is 16.8% with rates much higher in the North East and in Wales and Scotland.

public sector jobs regional

Since 2010 there has been an 8% decline in public sector jobs. Under government plans heath and education budgets are protected so the cuts have fallen elsewhere. Some of the reduction may be attribute to reclassification. At the end of 2013 Royal Mail was privatized and in early 2014 the Lloyds Banking Group, that had been bailed out by the government and taken in to the public sector, was reclassified as private as the government sold down its share.

During the same period there has been rise of in private sector job, pushing up the proportion of private sector workers from 81% to 85% of the workforce.

This split however is not uniform across London. 27% of the employment in Greenwich is in the public sector. That’s the highest rate of any region in the UK, and neighbouring Lewisham and Newham are not that far behind. At the other extreme, there are just 3% of people in the City working in the public sector.

public sector jobs map

Government pressure to reduce the size of the public sector is likely to lead to it making up a smaller proportion of employment in the next few years. The Office for Budget Responsibility, which analyses public finances, has said that between 2010-18 it expected to see the loss of 1.1 million public sector jobs across the country.

London is fortunate in seeing private sector job growth to compensate, at least in numbers. What is not clear from this data is how successful ex-public sector workers are at finding appropriate work in private organisations.

Source data

See also

Jobs concentrated in just 5 of London’s 33 boroughs

The jobs success and housing failure causing a crisis for the capital

Jobs growth shows changing face of work