Public sector warned not to cut umbrella company contractors

Public sector warned not to cut umbrella company contractors

A recent report released by REC announced that they are concerned that public expenditure cuts announced in the CSR will lead to companies cutting Umbrella Company Contractors in the short term. REC feel this would be an error of judgement and much detrimental in the longer term, having hefty financial implications.

Jim Berrisford, the Regional director of the REC in Northern Ireland, believes that temporary workers will be the first causalities when it comes to cost cutting but taking this option is not necessarily the answer to the problem. Berrisford went on to say that he believes the public sector does need a reform but a workforce of highly skilled flexible contractors could play a major role in delivering cost effective & efficient services.

The latest figures released says that to offset the public sector staffing cuts, about 1.6 million new jobs would have to be created in the private sector to compensate. The CIPD has estimated that 725,000 public sector jobs will be lost over the next 6 years and another 650,000 jobs in the private sector will go as a result of the spending cuts.

Alex Askew, Marketing Consultant at Danbro Umbrella Services, says "Although the public expenditure cuts are most likely going to result in a reduction in employment in both sectors, it needs to be considered that cutting umbrella company contractors may not necessarily be the best option for the longer term".

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