Impact of cuts been ‘understated’

The coalition government's spending cuts and the rise in VAT to 20% in January will result in over 1.6 million job losses, according to data released by the Chartered Institute of Personnel and Development (CIPD).

The figure from the CIPD - which encapsulates both the private and public sector - is much higher than previous estimates.

The CIPD say the full impact of the government's Spending Review had been "understated" and that an average of 320,000 private sector jobs a year would have to be created by 2015-16 just to keep unemployment steady at 2.5 million.

"The full impact of the coalition government's planned fiscal tightening has been understated," said Dr John Philpott, chief economic adviser to the CIPD.

"The 490,000 public sector job losses cited in the Spending Review looks like an underestimate, given what most public sector managers are telling us."