Public Sector Shock

Public Sector Shock

The Impact of Policy Retrenchment in Europe

Edited by Daniel Vaughan-Whitehead

The goal of this volume is to study this ‘public sector shock’. While budgetary reforms seek to ensure a more balanced and sound economic policy, they may generate new work inequalities among public sector employees, most particularly among women, who account for a considerable proportion of public sector employment. Cuts in education and training may also have an impact on the quality of human capital in both the public and private sectors, despite the fact that the recent crisis has shown the value of education as employees with better skills and training are more likely to maintain their jobs and incomes.

Chapter 15: Austerity, privatization and levelling down: Public sector reforms in the United Kingdom

Damian Grimshaw

Subjects: economics and finance, labour economics, public sector economics, social policy and sociology, economics of social policy, labour policy


The United Kingdom is witnessing a prolonged economic depression. The level of GDP during the first quarter of 2012 was still 4 per cent lower than the pre-recession peak recorded in early 20081 and it is expected that the period of recovery will be the longest of any crisis since the end of the First World War (NIESR 2011). Policy reforms designed to encourage a recovery of the economy came in the wake of the financial crash of 2008–09, but were in fact steered away from attempts at reforming the evident failures in the UK’s neoliberal model of finance-led capitalism; a wide-ranging government review of banking (‘Project Merlin’) concluded by supporting the status quo, arguing against a re-regulation of the industry and rejecting a tax on banks or on bonuses (King et al. 2012). Instead, in a context of an escalating sovereign debt crisis in Europe, a newly elected Conservative-led coalition government is arguing that economic recovery depends upon a radical reform of the state’s role in delivering public services in order both to reduce the structural deficit and to open up new opportunities for private sector investment and job growth. Both claims are hotly contested.

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