Job losses, an ageing workforce and why its going to get worse

50,000 jobs have been lost from the Scottish public sector workforce and a further 60,000 could go by 2019. Those who are left are getting older and young people are the losers.

I have been crunching the latest workforce data published before Christmas, together with other reports and forecasts on public sector staffing levels. There are three key points to make.

Firstly, the workforce continues to shrink in total and as a proportion of the Scottish workforce. The public sector as a percentage of the total Scottish workforce has fallen to 21.5% (547,300 headcount), barely one in five of the workforce. 49,500 jobs have been lost in the public sector across Scotland since the financial crash; 4,400 in the last year. That has an inevitable impact on the quantity and quality of public services, as well as the local economy. Public sector workers spend in their community and this, together with the wage freeze, is a major cause of the slow economic recovery. The big numbers have come from local government, although proportionately colleges have been hardest hit.

Secondly, the workforce is getting older. In 2013, the average age was 44 years and four months compared with 43 years and nine months in 2009. The biggest losers are young people, with those aged under 20 falling by 25%. Those aged between 50-59 actually increased by 5%. This is creating a retirement and skills blip that is likely to get worse if job losses continue under austerity economics, as recruitment freezes keep young people out of public service. Older workers on small average pensions are less likely to retire early because they will need to work on due to living costs and the later pension retirement age. They are also more expensive to release under early departure schemes that are anyway declining. The big job losses have actually come from natural wastage.

Thirdly, a further 60,000 jobs could be lost over the next five years. This year and next the numbers will be less severe, but after that they are forecast to increase dramatically. This number is extrapolated from the OBR and IFS forecasts for the UK, taking into account job losses already inflicted on Scotland. It is always difficult to be precise with this sort of calculation, but previous forecasts have not been far off the mark. It could actually be worse, because future cuts are likely to be concentrated in revenue spending as the CPPR paper highlights, and that is before any deliberate shift of spending from capital to revenue as the Scottish Government favours.

All of this creates very special problems for the workers who are left behind, as they try to keep the plates spinning on deteriorating Scottish public services.