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Sunday, 27th June 2010

UK: Controlling Public Spending

Controlling Public Spending (PDF)
Source: Policy Exchange (UK)

Introduction:
Pay is nearly 30% of total public spending, or around half of the total departmental spending bill. This total would be even higher if we included the unfunded pension liabilities the Government is accumulating. Some 6-7 million people work in the public sector (depending on the definition used), around 20% of the total workforce. Measures affecting public sector pay and staffing numbers thus have significant implications for public spending and for the personal circumstances of millions of workers, as well as potential knock-on implications for those making use of public services.

In this report we begin by analysing the current situation, considering issues such as how public sector pay has evolved over time, how public sector pay compares with that in the private sector, how public sector pay varies across regions of the country, and how public sector pay is being affected in other countries during their fiscal consolidation programmes. We then move on to consider how the number of people employed in the public sector has evolved, again considering the question from a number of angles. We examine conditions of employment, like pensions and the amount of time worked. We then bring these different factors together to examine how the total paybill has changed. To conclude our analysis we will look at developments in other countries.

Finally we will consider options for reform, and reflect upon the trade-offs involved e.g. between pay cuts and cuts to staffing numbers; between cuts of the same magnitude across regions and those focused in particular geographical areas; and between across-the-board cuts and cuts affecting particular departments.


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