The number of people working on the government payroll has hit a record high of 4.04 million, official figures reveal today.
The Office for National Statistics said employment in central Government rose by 21,000, or 0.5% in the the months to June. That is 95,000, or 2.4% more than in June last year just before Labour was elected.
The increase is equivalent of more than a full Wembley Stadium being hired by Whitehall in the first year of Sir Keir Starmer’s administration.
The increase was driven by a 42,000, or 2.1%, surge in the number of people working in the NHS to 2.07 million over the past year, and a 5,000, or 0.9%, rise in the number of civil servants to 551,000.
It was also fuelled by local authority schools converting to academies, which has the effect of school staff being reclassified as central Government employees. This has added 33,000 to the Government payroll over a year, the ONS said.
Nevertheless the data will be seized on by critics of the Rachel Reeves’s economic strategy who say the public sector is bloated and unaffordable at a time of severely strained public finances and sluggish growth.
The Chancellor is under intense pressure to bring public sector employment under control to help rein in public borrowing, which reached more than £150 billion last year.
Today’s ONS data also showed the overall number of payrolled employees in the UK dropped by 6,000 in July, with a fall of 142,000 over the year.
The unemployment rate was unchanged in the May to July quarter at 4.7 per cent.
Wage growth excluding bonuses in the three months to July eased to 4.8 per cent, while pay growth including bonuses was 4.7 per cent.
Ben Harrison, director of the Work Foundation at Lancaster University, said: “Unemployment continues to creep up. It is now at the high level in just under four years at 4.7%, and up 194,000 on the year. Concerningly for Ministers seeking to create additional pathways to work, there are now more people looking for fewer available jobs – with 2.3 jobseekers per vacancy. And the risk remains that unemployment rises further in the months ahead.
“The cooling labour market has also impacted wage growth. Nominal wage growth slowed to 4.8%, which is the first time it has dipped below 5% for three years since June 2022. Worryingly, this period of consistent pay growth has not fed through to real wages. Workers remain only £24 better off since the start of the Financial Crisis in August 2008.
“The combination of stagnant living standards and sticky inflation means that people are still likely to feel pessimistic about their household finances one year into the new Parliament.”
