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Public sector accountants face the axe

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10th Jun 2010
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Government spending cuts could see many accountants in the firing line over the coming months.

Public sector accounting contractors are bracing themselves for job cuts at the government takes steps to tackle the deficit, according to research carried out by workforce management experts Giant Group PLC.

The proportion of accountancy contactors expecting the public sector to create the most jobs over the next 12 months plummeted by a third, from 39.5% in Q3 2009 to 26.5% in Q1 2010.

Despite the cuts accountants’ skills will still be in demand, with 62.4% of contractors expecting their remuneration packages to increase over the next 12 months.

“Demand for accountancy contractors in the public sector, particularly in the Treasury, Financial Services Authority and the Bank of England mushroomed following the banking crisis. With the Treasury now preparing to drop the axe on public spending, contingent staff could be in the firing line,” warned Matthew Brown, managing director of Giant.

“Politically it is tempting for the government to say that contractors will be the first out of the door once these cuts come in to force, but the reality could be rather different. In the long term there could be increased use of accountancy and interim financial controllers to help find the efficiency savings which will be central to reducing the deficit.”

“The shift in job creation from the public to private sector should see pay for accountancy contractors rise this year. As the market recovers, there will be pressure on employers to increase pay.”

While the public sector jobs outlook remains uncertain for accountants, the financial services sector is seeing a rebound in confidence. Giant’s survey revealed that 18% of contractors expected increased job opportunities from investment banks and fund managers, compared to 15.7% towards the end of last year.

The recent upsurge in M&A activity and bond issuance are among the factors contributing to this upswing. “Finance departments in banks were squeezed post credit-crunch. Many were left understaffed, but while there is still reluctance to increase permanent headcounts, contractors are likely to be in demand,” observed Brown.

 

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