Public sector 'pessimistic' about job prospects

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Bosses of private firms are optimistic about creating jobs in the coming months, while those in the public sector are far less confident, the Chartered Institution of Personnel and Development said.

The CIPD said the public sector was set for "widespread" cuts, while recruitment in private companies would "surge".

The survey of 800 employers 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, according to 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, said: "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."