Business Environment Task 2

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Business Environment

Task 2

Introduction:

Public sectororganisation means the one that is owned controlled and run by the

government for the welfare of the people. Their main aim is to provide public services free

of cost eg.NHS.

Public Sector cutsmeans reduced the amount of budget which is to be paid to different

sectors of the society or community as a whole like education, police, NHS, local

government administration, libraries etc.

Current cuts planned in Public sector budgets by the UK government have a huge impact

on the job market .This can also resulted in problems like squeeze in the pay and

pensions. These cuts have resulted in a huge impact on our community as well.

School closed on 30th June 2011due to strike by teachers affected on the local authorities,

because already number of schools shut down before. Number of parents could not able

to attend the offices on that day because of the strikes

Todays action across the country demonstrates the anger and distress that this

government is causing teachers Christine Blower,general secretary of the National Union

of Teachers,said.

Public services such as libraries have been already shut down and some have come

under the threat of closure. It is a serious problem for a common man as he is totally

depend upon these public services as sometimes people are unable to access the

computer system relied on these libraries for their day to day work such as applying for

jobs and for other general information.

If we consider UK as a whole there is a deep affect of the recession many equality groups

loss their jobs in the UK recession, it can be easily guessed that cuts to jobs in public

sector in the future will be adversely effect to the equalities group and labour market as a

whole. In previous recession it was also seen that old workers also loss their job by many

employer using early retirement. For example NHS , it is a facility which is provided by the

government to all its citizens, or immigrants but the workforce has expanded hugely in

2000 but now it is shrinking, it has been notice that almost one out of ten staff is reducing

day by day.

Following table clearly shows the number of cuts in different regions-


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http://www.bizcommunity.com/Article/196/22/53215.html (accessed on 15th October 2010)

Regions Number of job loses Percentage of job loses

London 122 3.1

South East 112 3.1North West 108 3.7

Scottland 95 4.1

Yorkshire & Humpershire 82 3.7

South West 81 3.5

West Midland 80 3.6

East 74 3.2

East Midlands 58 3.2

Wales 52 4.3

North East 43 4.1

Northern Ireland 36 5.2

Whole UK 943 3.4

Police forces :Department of police also tend to cut number of jobs in England and Wales

over 34,000 staff lost their job in the next four years, these cuts will trigger a rise in

property crime because it will be very difficult for them to survive without basic needs.Alan, T.(21July 2011)home affairs editor

Charity Cuts : Charity is also making cuts on the jobs in its department they are replacing

salaried with unpaid staff, and even the worse news is that spending cuts means some of

the charities involved they are not even train the volunteers even if they want to be.

(Patrick,B.July2011

Also according to new researchpublished by Hays,the leading recruiting expert, the public

sector is facing very critical loss of employees, it has been assumed that almost half (45%)

of staff in the sector actively want to work with the private sector.

If we look overall the sector is experiencing a difficult time with high levels of anxiety aboutthe future and the many impacts for the children, young people and families that it serves

.

LONG TERM AND SHORT TERM EFFECTS

It is very well said that long term gain and short term pain

Public Sector cuts are necessary to restore economic growth in the long term.

It is fact that these cuts will affect a short term pain but at the end the long term impact will be
http://www.bizcommunity.com/Article/196/22/53215.htmlhttp://www.bizcommunity.com/Article/196/22/53215.html


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substantial growth in the contracting out of public services. Moreover, Public sector productivity

must be increased and the welfare system will be improved.

Secondly their should be separate room for the tax reform because we have tax system which needs

to be reform , because last so many years tax has risen dramatically.

In case of short term effects it will lead to low GDP which in turn means that growth is reduced and

number of jobs will be cut and youth will face the unemployment and simultaneously crime will be

increased. If there is not job no salary people will not buy any thing from the market no sale means

no cash flow in the market.

http://www.publicservice.co.uk/article.asp?publication=Central

%20Government&id=458&content_name=Digest&article=15365

Conclusion:Public sector pay and pensions are key issues for a government as cuts allow reduction in

public sector pay and employment and increases in pension contribution. The government

has announces two years freeze for the majority of public sector workers. This implies a

significant pay cuts that will remove most of the estimated average public sector premium.

The variation in the turnover rates across the organisation makes it harder to achieve

these employment targets. The option for compulsory redundancies and early retirement

are costly for public finances . The ultimate goal is to reduce public spending.

The gain for the public finances from any reduction would however accrue in the long run

which would not help the government immediate goals.

However, the whole scenario highlights that the potential for job creation in the private

sector resulting more employment opportunities coming from increased activity in areas

such as the outsourcing market and interest rates staying lower for longer due to the fiscal

consolidation. The Key need for the economy now is growth so that bank can recover and

people get the job who are jobless and the best key for promoting growth in both long term

and short term is spending cuts.

http://www.wmro.org/resources/res.aspx/CmsResource/resourceFilename/3329/

RSA-10-briefing-paper-one-impact-public-sector-cuts.pdf?r=NQ288j0ZSe

http://www.napier.ac.uk/employmentresearchinstitute/projects/Documents/SG%20Equalities

%20groups%20report%20final%20120710a%20(2).pdf

http://www.bbc.co.uk/news/business-11530811
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