Category: Contractor Industry News

The new coalition government needs to approach the pending job cuts in the public sector with care, according to an expert, who said messing it up could spell trouble for contractors using umbrella companies and the UK economy.

Stephen Overell, associate director at the Work Foundation, said that the plans to cut public sector jobs could create a problem for jobseekers because the private sector has not been creating as many new roles in the past couple of years.

"The private sector over recent years has not really been creating many jobs. Most new jobs come from the public sector so that is also likely to mean that if you are cutting back on public sector jobs, the private sector cannot mop up the numbers without work," he stated.

A recent report from the Organisation for Economic Co-operation and Development predicted that the UK unemployment rate would remain at nearly eight per cent at the end of 2011.