The Government does not fully appreciate the impact cuts to the public sector workforce could have on the wider labour market, according to a new report from The Work Foundation.

Public Loss, Private Gain? warns the Government is ‘flying blind' over the  impact these cuts could have, and calls on Government to monitor the situation to identify major labour market problems as they arise.

Ian Brinkley, director of The Work Foundation, said: ‘The Government has some major blind spots around the impact of its public sector workforce cuts. These cuts are progressing at a rate not yet seen in the UK, yet the Government appears to have little knowledge of what this is doing to the labour market or the skills and experience of the public sector workforce.

'Our analysis of previous public sector cuts shows that the UK labour market is capable of absorbing large scale reductions in the public sector workforce without high levels of unemployment  - but only if there is strong and sustained private sector jobs growth.'

The report also found that nearly one million who said they were employed in the public sector at the end of 2010 had left by the end of 2011 – far more than can be accounted for by public sector job cuts.

It also said that cutting public sector pay in the regions would not necessarily encourage private sector employment, and there are no obvious regional patterns to suggest the cuts are worsening or improving regional labour market imbalances.

Link to report: http://www.theworkfoundation.com/Reports/323/Public-Loss-Private-Gain