Public sector squeeze to lead to more individual voluntary arrangements?

The public sector is facing a major squeeze on employment and much uncertainty due to government spending cuts, a recruitment expert has said.

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The public sector is facing a major squeeze on employment and much uncertainty due to government spending cuts, a recruitment expert has said.

Chief executive of the Recruitment and Employment Confederation Kevin Green stated: "This is having a huge impact on the consumer and the jobs market. The consumer – because 20 per cent of all people in the UK work in the public sector – obviously has huge concerns about job security."

Problems like pay and the squeeze on pensions can be added to this, he noted.

Mr Green noted this means there is "little fluidity" in the public sector jobs market, but for those already there and worried about their jobs, the issue of being able to pay off debts may also be of concern.

While there may be some state employees who are not in debt or owe little, many will have mortgages and could be carrying large balances on overdrafts, or be paying off loans and facing significant credit card debt levels.

For those owing £15,000 or more and struggling to pay the interest, an individual voluntary arrangement may be the answer and this could be particularly so for some public sector workers.

Those who are facing a pay freeze may find this to be the case because while their take-home pay stays the same, inflation is reducing its value and making the twin demands of interest payments and higher household bills harder to meet.

And for workers suffering redundancy, the consequences may be more immediate and severe.

Women may be most likely to fall into the second category, as the latest official figures on employment show females accounted for the bulk of the 144,000 redundancies in the three months to May, while more women are claiming jobseekers allowance than at any time since 1996.

By Joe White
 

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