Latest Public Sector News

26.06.13

Spending review cuts automatic pay rises for civil service

Automatic pay rises in the civil service will be scrapped, Chancellor George Osborne has announced in his spending review today. The Government also aims to reduce automative pay rises for staff in schools, the NHS, prisons and the police.

Public sector pay rises will also be limited to an average of up to 1% for 2015/16.

Borrowing for this year (2013/14) is set to be £108bn, compared to £157bn under the last government. Total government expenditure for 2015/16 will be £745bn, Osborne said. He went on to describe £11.5bn of cuts across Whitehall.

The Treasury will have to find 10% savings, as will the Cabinet Office. Local Government department will see a 10% reduction in councils’ resource budget. The council tax freeze will be extended for another two years.

Devolved governments in Scotland, Wales and Northern Ireland must deliver 2% savings, the department for culture, media and sport 7%, with elite sport protected but Arts Council England and national museums cut by 5%.

The Foreign Office budget is cut by 8%, while Defence gets a 1% boost and Intelligent Services get 3.4% additional funding. The Home Office sees a cut of 8%, with counter-terrorism protected, while the Ministry of Justice must find savings of 10%.

HMRC’s budget is reduced by 5%, Energy by 8% and Environment by 10%, although flood defences will be protected. The DfT will see a 9% cut in resource budget, but the capital budget has been increased to £9.5bn. The education budget has been increased to £53bn, International Development to £11.1bn and health at £110bn.

The DWP will have its budget cut by 9.5%, with a welfare cap set each year at the budget for four years, as a cash sum including housing, disability and pensioner benefits as well as tax credits.

Osborne said: “We are all in it together … Those with the broadest shoulders bear the largest burden.” 

He also announced £3bn of capital investment in housing and £300bn for infrastructure, including projects on roads, railways, bridges, broadband, science and schools.

His full speech is available here.

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

Comments

Sammie   27/06/2013 at 23:16

So Civil Servants will no longer get incremental payrises. Why should I not be surprised by this announcement? Well the fact is that HMRC staff have not had incremental payrises for years in fact since our 3 year pay deal 2005 to 2007. So why is this news?

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