1. Main points

  • There were 5.35 million people employed in the public sector for December 2017, that is, 132,000 fewer than for September 2017 and 100,000 fewer compared with December 2016; these large falls were entirely due to the transfer of English housing associations to the private sector.

  • Excluding the English housing associations reclassification effect, the number of people employed in the public sector increased by 9,000 between September and December 2017 and increased by 44,000 between December 2016 and December 2017.

  • There were 26.90 million people employed in the private sector for December 2017, that is, 300,000 more than for September 2017 and 502,000 more than for December 2016; these increases were partly due to the transfer of English housing associations to the private sector.

  • Excluding the English housing associations reclassification effect, the number of people employed in the private sector increased by 159,000 between September and December 2017 and increased by 358,000 between December 2016 and December 2017.

  • For December 2017, of all people in paid work, there were 16.6% employed in the public sector and the remaining 83.4% were employed in the private sector.

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2. Things you need to know about this release

The estimates of public and private sector employment published in this month’s release have been impacted by the reclassification of English housing associations, which are included in the private sector for December 2017 but are included in the public sector between September 2008 and September 2017. This reclassification has resulted in around 140,000 employees who were included in the public sector for September 2017 being included in the private sector estimates for December 2017.

This bulletin presents the latest quarterly estimates of UK public sector employment (PSE). The public sector comprises central government, local government and public corporations as defined for the UK National Accounts.

These statistics are used mainly to monitor changes in the number of people employed in the UK public and private sectors and to inform policy-making across government.

Estimates of PSE are presented by sector classification, industry and region. Civil Service employment is shown by government department and agency. Employment in executive non-departmental public bodies (NDPBs) is aggregated by sponsoring department.

While this bulletin focuses on headcount estimates of PSE, full-time equivalent estimates (based on the number of hours worked divided by the standard full-time hours) are available in the accompanying PSE datasets.

The PSE estimates are point-in-time employment estimates and relate to a specific day in the published month.

The main source of PSE is the Quarterly Public Sector Employment Survey, which aims to obtain complete coverage of local authorities and the Civil Service, and coverage of all public bodies with 20 or more employees. It is difficult to achieve complete coverage for local and central government, for example, in the education sector. Further information can be found in the Quality and Methodology Information report.

All time series in this release, except for the regional series, are seasonally adjusted to aid interpretation. Relationships that hold in the unadjusted series do not necessarily hold for the seasonally adjusted series. For example, total PSE equals the total of all public sector industry estimates before seasonal adjustment, but this is not necessarily true after seasonal adjustment.

Comparisons of public and private sector employment over time are complicated by a number of major reclassifications, where bodies employing large numbers of people have moved between the public and private sectors. We produce estimates of public and private sector employment excluding the effects of major reclassifications to help you understand underlying trends in employment. We publish these alongside estimates of total public and private sector employment in Tables 5, 6a and 7a of the PSE datasets.

Consistent with the revisions policy for public sector employment statistics, the statistics are subject to revisions. Revisions can be made for a variety of reasons, the most common include:

  • to account for late information from respondents

  • to account for recent classifications to the public sector

  • to update seasonal factors (updated quarterly and reviewed annually)

Potential changes to public sector employment estimates

We are in the early stages of a labour market statistics transformation project. One aim is to investigate whether administrative data can be used to replace or supplement some of our business surveys, including the Quarterly Public Sector Employment Survey (QPSES). The QPSES forms the basis of the public sector employment statistics published in this release.

One potential new data source is administrative data from HM Revenue and Customs. These data have many benefits, but they do not include information on full-time equivalents (FTE).

With this in mind, we would like to find out how important public sector employment FTE data are to you. If you use public sector employment statistics please complete this brief survey. The survey contains only three questions and should take less than a minute to complete.

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3. Public sector employment falls

There were 5.35 million employees in the public sector for December 2017, down 132,000 (2.4%) compared with September 2017 and down 100,000 (1.8%) compared with December 2016. These falls in public sector employment (PSE) were due to the reclassification of English housing associations to the private sector. These housing associations employ around 140,000 people and they are included in the public sector for September 2017 but are included in the private sector for December 2017.

Excluding the housing associations reclassification effect, PSE increased by 9,000 (0.2%) between September and December 2017 and by 44,000 (0.8%) between December 2016 and December 2017.

Figure 1 shows trends in total public sector employment, and public sector employment excluding major reclassifications, since comparable records began in 1999. As shown in Figure 1, PSE has decreased by 1.11 million since its peak of 6.46 million in September 2009. The reclassification of bodies from the public sector to the private sector accounts for around 700,000 of this decrease.

Of all people in paid work, 16.6% were employed in the public sector for December 2017, the lowest proportion since comparable records began in 1999.

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4. Employment rises in central government and falls in local government and public corporations

The number of people employed in central government continued to rise in December 2017, as shown in Figure 2. At 3.07 million, it was up 25,000 (0.8%) compared with September 2017 and up 109,000 (3.7%) compared with December 2016.

The increase of 25,000 in central government employment between September and December 2017 was mainly due to:

  • local authority schools converting to academy status

  • an increase in employment in the National Health Service

  • an increase in employment in the Civil Service

The number of people employed in central government has risen steadily for over five years and the latest figure for December 2017 (3.07 million) is the highest figure since comparable records began in 1999.

The number of people employed in local government fell by 17,000 (0.8%) between September and December 2017 and fell by 66,000 (3.1%) compared with December 2016 to reach 2.08 million, the lowest figure since comparable records began in 1999. Local authority schools converting to academies (which are classified to central government) accounted for most of these decreases.

The number of people employed in public corporations fell by 140,000 (41.4%) between September and December 2017 and fell by 143,000 (41.9%) compared with December 2016 to reach 198,000, the lowest figure since comparable records began in 1999. These large falls were due to the reclassification of English housing associations to the private sector. Prior to December 2017, employment in public corporations had been falling gradually.  

The academies impact

The composition of the public sector is changing due to academy conversions in England. Employees move from local government to central government when local authority schools become academies. In December 2017, academy conversions accounted for around 13,000 employees over the quarter and 61,000 over the year, as shown in Table 1. A full time series of employment in academies is available in Table 11 of the public sector employment dataset.

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5. “Other public sector” and “other health and social work” show large employment falls

Looking at public sector employment by industry, the categories “other public sector” and “other health and social work” showed large falls in employment between September and December 2017, due to the reclassification of English housing associations to the private sector.

Employment in “other public sector” fell by 101,000 (16.4%) between September and December 2017 and by 110,000 (17.6%) between December 2016 and December 2017 to reach 514,000. Employment in “other health and social work” fell by 42,000 (15.7%) between September and December 2017 and by 49,000 (17.8%) between December 2016 and December 2017 to reach 226,000. This is shown in Figure 3.

The number of people employed in the National Health Service continued to increase and rose by 10,000 (0.6%) between September and December 2017 and by 37,000 (2.3%) between December 2016 and December 2017 to reach 1.64 million, the highest level since comparable records began in 1999.

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6. Private sector employment increases to record high

Private sector employment estimates are derived as the difference between total employment estimates, sourced from the Labour Force Survey, and public sector employment estimates collected from public sector organisations.

For December 2017, there were 26.90 million people employed in the private sector. This was:

  • 300,000 (1.1%) more than for September 2017

  • 502,000 (1.9%) more than for a year earlier

  • the highest since comparable records began, as shown in Figure 4

The reclassification of English housing associations to the private sector has contributed to these increases in private sector employment. Excluding the effect of this reclassification, private sector employment increased by 159,000 (0.6%) between September and December 2017 and by 358,000 (1.3%) between December 2016 and December 2017.

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7. Civil Service employment rises

Between September and December 2017, employment in the Home Civil Service increased by 4,000 (0.9%) to reach 427,000. Between December 2016 and December 2017, employment in the Home Civil Service increased by 11,000 (2.6%).

Civil Service employment last peaked in June 2005 at 566,000. Since then, it has generally been falling steadily, although it has shown a slight increase in recent periods as shown in Figure 5.

Machinery of government changes in the period since 1 January 2017 are listed in Table 2.

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9. What’s changed in this release?

On 16 November 2017, registered providers of social housing in England (referred to as “housing associations” in this release) were reclassified from the public sector to the private sector. We have implemented this classification decision in this release. More information can be found in the Statement on classification of English housing associations.

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10. Quality and methodology

The Public sector employment (PSE) Quality and Methodology Information report contains important information on:

  • the strengths and limitations of the data and how it compares with related data

  • uses and users of the data

  • how the output was created

  • the quality of the output including the accuracy of the data

Response rates

The primary source of the PSE statistics is the Quarterly Public Sector Employment Survey (QPSES), which comprises three separate data collections: local authorities in England and Wales, public corporations and non- departmental public bodies (NDPBs) in Great Britain and the Home Civil Service. Our targets for response before the results are compiled are 90% for Local Authorities and Public Bodies QPSES and 100% for Civil Service QPSES. Response rates for the latest period are shown in Table 3.

So that estimates of total public sector employment can be made, it is necessary for further information to be gathered from external sources, listed in Table 4.

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Contact details for this Statistical bulletin

Richard Clegg
pse@ons.gsi.gov.uk
Telephone: +44 (0)1633 455400