November 2019

Rob Calvert Jump and Will Stronge for Autonomy

In response to the Conservative Party's calculations, Autonomy have estimated what a 32-hour working week would cost to implement in the public sector

+ It would cost as little as £2.85 billion (and £3.55 on an upper estimate).

+ It would create over 500,000 new full-time equivalent jobs in the sector.

+ Even the upper estimate of £3.55 billion is five times less than the estimate that the Conservative Party, following the Centre for Policy Studies, proposed during the 2019 general election

+ £3.55 billion constitutes less than 1/6 the annual cost of housing benefit.

+ At less than 1% of the total government spending budget, a 32-hour week in public sector is effectively a bargain.

  • In the 2019 general election The Labour Party proposed moving the UK economy to a 32-hour week over the period of a decade, with no loss of pay.

 

  • The Conservative Party and the Centre for Policy Studies estimated that this ‘four-day week’ would cost the public sector £17 billion annually.

 

  • This estimate does not take into account various factors that would be at play in the event of a 32-hour week in the public sector, including a number of significant cost reductions that we can expect.

 

  • On Autonomy’s calculations, taking into account tax contributions, the current costs to public services of overwork-related sickness across the economy, as well as the savings that would accrue from shorter hours due to greater public sector staff health and wellbeing, the net cost of a 32-hour week would be £3.55 billion on conservative estimates and £2.85 billion on less conservative estimates.

 

  • The higher estimate of £3.55 billion is less than one fifth of the figure that the Conservative Party and the Centre for Policy Studies have estimated. It is over 6 times less than the annual Department for Work and Pensions’ budget for housing benefit (£22.9 billion).

 

  • The four-day week would therefore still require state expenditure, but not nearly as much as anticipated. This cheap price tag is even more striking considering that in the process of the transition to shorter hours, you would be creating over 500,000 new, good jobs, greatly improving the job quality for millions of public sector staff as well as reducing the carbon footprint of the sector.

Kate Bell, Head of Economics at the TUC, says:  

 

‘When unions fought for the weekend we were told it wasn’t affordable. But we know we can win shorter working time – and higher pay – by ensuring workers get a fairer share of the wealth they create. This report helps show us how’.

 

Dave Ward, General Secretary of the CWU, says:

 

“The numbers bandied about by the Centre for Policy Studies and the Conservative Party have been proved to be wildly inaccurate and this study has shown this. A shorter working week for our public sector, and across the economy, is not only a desirable policy but is entirely affordable. Reducing overwork and giving millions of workers better work-life balance is surely the future that the UK deserves”

 

Mat Lawrence, Director Common Wealth, says:

 

“Time is a valuable asset, and therefore deeply political.  This analysis from Autonomy is an important contribution to a vital debate on the future and cost of working time reduction, which shows that not only is a managed transition desirable – it is affordable too.”

 

Alice Martin, Head of Work and Pay at the New Economics Foundation, says:

 

“A shorter working week is not only a positive move for our overstretched workforce, but it also makes economic sense as this report shows. This is exactly the wrong time to be shying away from radical solutions to the deep, structural problems in the economy that have seen us in a productivity and wage slump for a decade. Setting a “new norm” for working hours means people will be happier and healthier in their jobs, and parents would have more time to share in childcare. Just two benefits of this practical and affordable policy.”

Links:

Rob Jump is a Research Fellow in Political Economy at Grenwich University.

Will Stronge is Director of Autonomy.