Further jobs gloom on the way as north-south ‘chasm’ widens

JOB prospects are set to deteriorate in the coming months with more firms poised to make workers redundant, and warnings of a “worsening chasm” between the north and south in Britain, as unemployment slides closer to the three million mark.

A survey of 1,000 employers by the Chartered Institute of Personnel and Development (CIPD) shows almost a third of private sector firms plan redundancies in the coming months, up from one in four at the end of last year.

Employment prospects are brightening in London and the south east but they remain bleak in Scotland, Northern Ireland, Wales and the north of England.

The CIPD said the difference between the number of employers intending to hire new staff, and those warning of cuts, is at its worst level since the end of the last recession in 2009.

The findings reinforced its prediction that unemployment could reach 2.85m by the end of the year. The jobless total increased to 2.68m last month and is expected to rise again when new figures are published by the Office for National Statistics on Wednesday.

Six out of ten employers in the Labour Market Outlook survey by CIPD are not planning to create any new posts in the next three months. Where recruitment is expected, it is concentrated on management and executives (23 per cent) and sales and marketing (21 per cent).

A “net employment intentions” figure measures the difference between employers planning to increase staff levels and those who plan to cut.

The UK national average figure is -8. But in the south of England, the figure has improved to -1 from -4 in the past three months, while London has actually moved into positive territory with a +3.

Employment prospects in the north have fallen starkly to -20. The survey numbers were too small to pull out independent findings for Scotland, but they suggest the picture in the “Celtic fringe” of Northern Ireland, Scotland and Wales is even worse, said Gerwyn Davies, a CIPD policy adviser. Deteriorating job prospects reflect a slump in confidence in the private sector, which the government had hoped would create jobs to compensate for public sector cuts.

A “widening chasm” between north and south reflects the strength of the services sector for jobs in the south, said Mr Davies.

“Public sector and manufacturing play a greater role in the rest of the country and that’s why the figures are so much worse,” he said.

The strength of tourism and the financial services sector suggest some respite for cities like Edinburgh, he said.

“One of the surprising aspects is that despite the high-profile redundancies from RBS and the like, the number of people employed in the financial services sector has remained pretty constant, where as manufacturing, construction and retail have been very badly affected.”

David Lonsdale, assistant director for the Confederation of British Industry in Scotland, called on the coalition government to expand a scheme providing new firms outwith the south east with an exemption from employers’ national insurance contributions when they take on staff. He said: “It is crucial that the Chancellor puts measures to aid private sector investment and expansion at the very heart of his Budget next month.”