There is a danger that the cuts in public expenditure announced in the Comprehensive Spending Review on October 20th will inaugurate an era of slash and burn budget-crunching in the public sector.  Under pressure to be seen to be saving money, those charged with commissioning and recruitment may be tempted to make easy cost-saving gestures, like axing IT contracting budgets and other jobs fulfilled by contractors working in public services through umbrella companies. But they could well be making a serious error of judgement if they do, an error which could prove financially imprudent in the longer term.

This is the view being argued trenchantly by the Recruitment and Employment Confederation. Temporary staff are frequently the first causalities of cuts, according to the REC’s Regional Director for Northern Ireland, Jim Berrisford, but this is almost invariably a misguided and false economy. Those personnel working for umbrella companies, far from being a drain on resources, are far more likely to be an effective solution to public expenditure stringencies. Mr Berrisford believes that public sector bodies will need to become leaner and undergo fundamental reforms in service delivery in the time ahead. A highly skilled flexible workforce can play a “pivotal role” in delivering these services in an efficient and cost-effective way, he continued.

The REC insists that treating such workers as an easy target for reducing organisational head-counts is a crude and knee-jerk means of adapting to the new era, which demands the very innovation and service reform these flexible workers are ideally suited to deliver.  We’ll watch with interest to see if Mr Berrisford’s warnings are heeded.

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