'Stark divide' over job prospects

Job prospects are improving as the UK emerges from recession, but there is a "stark" difference between private firms and the public sector, a new report has claimed.

The Chartered Institute of Personnel and Development (CIPD) said the public sector was set for "widespread" cuts, while recruitment in private companies would "surge".

A survey of almost 800 employers showed that those in the private sector were more optimistic about creating jobs in the coming months, while those in the public sector were "radically" more pessimistic.

The report also highlighted a divide in job growth prospects between London and southern England, which were tipped to be the main engines of growth, and the rest of the UK.

Employment was set to grow in the capital and the South, but would continue to fall in areas such as Scotland and Wales, said the report.

Gerwyn Davies, the CIPD's public policy adviser, said: "The recession represents a long, dark winter for the jobs market. However, a return to spring could mean a growth of full-time jobs in the private sector that may continue if the global economy continues to recover at the same rate.

"This will boost private sector workers' prospects as the majority will no longer face potential overwhelming unemployment, pay freezes and lack of promotion. It also raises hopes that we may be close to a peak in unemployment.

"In contrast, public sector employers will be looking to close the lid on employment, pay and promotion. This will present huge challenges to public sector managers in their attempt to keep employees engaged, particularly if the cost of living continues to rise."

Alan Downey, of KPMG, which helped with the research, added: "It has been clear for some time that the steady increase in public sector jobs would have to come to an end. So the change in attitudes is not in itself a surprise. What is surprising is the speed and extent of the U-turn in attitudes.

"Just three months ago public sector employers were relatively optimistic and many were continuing to recruit. Now they are massively more pessimistic than their private sector counterparts about job prospects, with more than 40% contemplating a reduction in headcount and a significant number planning a pay freeze.It is clear that the chill wind of the recession has reached the public sector with a vengeance."