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2.5 Public sector pay

At SR21 the government set overall budgets in cash terms on an assumption that pay for public sector workforces would increase by around 3%, 2%, and 2% respectively in the three years covered.

Pay for most frontline public sector workers including NHS staff, teachers, police, armed forces and prison officers is set based on recommendations from independent Pay Review Bodies (PRBs). These recommendations have responded to higher levels of wage growth across the wider economy and so actual pay awards across PRB workforces increased by an average of 5% in 2022-23, and 6% in 2023-24.[footnote 11]

This – alongside some exceptional pay increases agreed outside the PRB process and pay awards across the Civil Service – has meant that public spending on pay is expected to be around £11-12 billion higher across central government departments in 2024-25 than it was projected to be at SR21, even before accounting for 2024-25 pay awards.[footnote 12]

That doesn’t contextualise it’s part in the 22 billion black hole at all 

However

 

The £21.9 billion was a net figure. Gross additional pressures totalling £35.3 billion were identified by the Treasury, and approximately £13.4 billion of these pressures were then offset by a combination of reserve funds and other allowances.

The additional pressures identified were as follows:

  • 2024-25 public sector pay awards (£9.4bn) 

It’s from the Treasury report…https://www.gov.uk/government/publications/fixing-the-foundations-public-spending-audit-2024-25/fixing-the-foundations-public-spending-audit-2024-25-html

 

1. Executive summary

On 8 July, the Chancellor of the Exchequer announced that she had instructed Treasury officials to undertake a rapid audit of public spending. This document sets out the outcome of the audit, the immediate action the government is taking in response, and the long-term measures being introduced to restore public spending control.

The audit carried out by the Treasury shows that the forecast overspend on departmental spending is expected to be £21.9 billion above the resource departmental expenditure limit (RDEL) totals set by the Treasury at Spring Budget 2024.[footnote 1],[footnote 2]

 

17 hours ago, Rockets said:

But, for example, I probably wouldn't have given junior doctors a 22% pay rise and then claimed that as part of the 22bn black hole "inherited" by this government and then told farmers and pensioners to suck it up because of said 22bn black hole...but, to be fair, farmers and pensioners didn't help the election campaign did they so I presume they weren't owed their payday?! 😉

 

 

So when you were out on your doorstep clapping for the NHS, what you really felt was that they deserved to watch their pay shrink in order to protect people being gifted multimillion pound estates from paying any tax on it?

BTW, the 22% over 2 years, only brings their pay back to just below the level it was in 2009 in real terms.

Edited by Earl Aelfheah
  • Agree 1

Robber Reeves strikes AGAIN. 

"Royal Mail threatens to hike stamp prices again in more misery for UK households"

Royal Mail has warned it will have to raise prices after taking a £120m hit from Rachel Reeves’s Budget tax raid.

Royal Mail warns of price rises after £120m hit from Reeves’s tax raid

 

Edited by jazzer

Fascinating The Rest is Politics questions this week and they deal with the farmer issue as the first question. Rory Stewart has a fascinating insight into the issues here (and he knows what he is talking about from his work at DEFRA) - about the high cost of land and the low returns from farming and how this is anything but a few farms being affected.

Well worth a listen for those that want to hear both sides of the argument.

Edited by Rockets

The new tax rules don't just apply to farmers. 

They apply to every single family owned business. 

If you've created a small family run business and you pass it on when you die your children will have to pay the new inheritance tax. Doesn't matter if its a farm or a clothes shop or a fruit and veg business,  all of them are caught.

William, a farmer, farming with both his parents who are in their 80s, summed up the nonsensical approach the government is taking on farmers on Question Time tonight when he said: "At the point at which inheritance tax becomes due you aren't in a position to pay it without selling an income bearing asset which then destabilises the very entity you have built up to create a profit from".

He summed it up beautifully when he closed: "If this policy were to persist it will materially and existentially destabilise our [the county's] farming business "

The biggest clap of the programme came from the ex-NFU president who accused the government panelist: "Why aren't you going after the wealthy investors, the private equity businesses that are buying up land, planting trees, offsetting their green conscience. You've done nothing to them. They're the ones driving up land prices. These farmers do not want to sell their asset....they want to invest in it and this is going to stifle investment. Who is going to want to invest in new buildings as that is going to drive up the value of the estate."

"You're going after the wrong people".

It's amazing that the government have been daft enough to pick a fight with farmers - Alastair Campbell commented that he did react with shock when it was announced in the budget as, he said, you don't start a fight with farmers.

Sadly, the impact this budget is having on the economy was felt far and wide before it even occurred 

BBC News - Retail sales fell in October as Budget fears hit spending - BBC News
https://www.bbc.co.uk/news/articles/c4gmy9xldgno

The increase in employers NI, whilst not directly taxing working people, will be passed on to them in higher costs of services and goods so it's an indirect tax. 

The argument of the alleged 20 billion black hole, I was always taught "To cut your coat according to your cloth" and the government should have taken a little time to boost the econimy before increasing wages and spending.

The current feel is that they are increasing costs, red tape and inflation, all of which is not giving businesses the confidence to grow and generate income which inversely increases the tax income. 

" increasing costs, red tape and inflation"

yet when Brexit did this people were told to stop remaining

Governments are not run like household budgets

"It's amazing that the government have been daft enough to pick a fight with farmers - Alastair Campbell commented that he did react with shock when it was announced in the budget as, he said, you don't start a fight with farmers."

 

And this sounds more like a protection racket than anything else

19 hours ago, jazzer said:

Robber Reeves strikes AGAIN. 

"Royal Mail threatens to hike stamp prices again in more misery for UK households"

Royal Mail has warned it will have to raise prices after taking a £120m hit from Rachel Reeves’s Budget tax raid.

Royal Mail warns of price rises after £120m hit from Reeves’s tax raid

 

What did the last lot do?  Cost of postage has gone up well above inflation for years.  

This thread does feel like Labour bashing and in particular knocking the PM and Chancellor.

You didn't see the Telegraph, Mail and Express knocking 14 years of incompetence by the last lot, in particular the unnecessary programme of austerity that led to the massive decline in public services, the silly idea to have a referendum on leaving the EU and the worst of the lot not borrowing to underpin growth when interest rates at an all time low.

It feels like many of you have drunk in everything the aforementioned papers print.

agreed Mal

and it's not like this new govt is above criticism - there is plenty to worry about or think they are misguided on - but overall there is just about a sense of necessary correction, and that the specific criticism from some on here isn't really all that objective

I get they are super unpopular - but anyone voting for ANY party at the last election and thinking a new govt of any hue would be able to turn on taps and make everyone happy given the state of everything was just not taking politics, governance or their own choices seriously enough

50 minutes ago, Sephiroth said:

I get they are super unpopular - but anyone voting for ANY party at the last election and thinking a new govt of any hue would be able to turn on taps and make everyone happy given the state of everything was just not taking politics, governance or their own choices seriously enough

And therein lies the problem for this government. They campaigned on a ticket of "we're not that lot and that lot were awful" and if we get in we will change everything. They set expectations way too high about what they might be able to achieve and how quickly and now people are saying "hang on a minute". 

With growth stagnating (very much a global challenge), taxation and inflation both rising the pressure will be mounting on them to provide some light at the end of the tunnel and the "well, we've had 14 years of that lot" won't cut it anymore. A bit like the "I am a son of a toolmaker", they are leaning in on the "14 years of that lot" way too much to try a deflect away from issues that they have caused like the Winter Fuel payments and going after farmers and you can tell people are getting weary of it. And that is very, very worrying for not only them as a political party but the country as a whole as this is when people turn to the populist parties. No-one in opposition has to do anything right now because the government are their own worst enemy with own-goal after own-goal.

Agree postage spiralled under the last Govt, but because of thieving Reeves budget to increase Employer NI contributions that is the direct cause right NOW for Royal Mail to look at increasing postal rates. 

You may not like the "bashing" the three stooges is getting, but they couldn't have made a worse start in the first 120 days in Office. 

The continual reference by Starmer to "my dad was a tool maker" - no he wasn't, it was his business and then of course that wonderous line about "in my last job as the Director of Public Prosecutions", actually who cares, he is supposed to be the Prime Minister. Stop the constant references and get on with the job.

What we have here right now is inflation rising, unemployment rising, cost of living still rising, energy prices rising when they said they would reduce them. A 22bn black hole pat caused by a wage increase for the public sector that makes up about half of that. A Chancellor not qualified to as an economist, the lies just keep on coming, how many times do they get to trip themselves up?  When you are in Govt, be prepared for scrutiny, that is what this is all about.  

The people need to rise up and throw them out of Office. 

They campaigned on a ticket of "we're not that lot and that lot were awful" and if we get in we will change everything. 

 

the first bit is absolutely true

Did they campaign on "we will change everything?" my recollection Is they were super cautious about ANY promises to the point where Reeves boxed herself in

Changing much is certainly the way forward - but no way is  that possible in a couple of years much less a few months

 

Notable that anything they DO change leads to how's of protest as well - damned if you change nothing damned if you change anything

They just gave woolly and opaque policies on the basis of "we will not increase tax for working people" and then could not clearly define what a working person is.

They sold everyone, directly or indirectly, on the notion that Covid, the energy crisis and the war in Ukraine had nothing to do with the sorry state of the UK and that it was 14 years of Tory rule and Truss' nightmare budget that was the source of all the country's woes. the moment they got in they lent in to the notion that change will be slow due to global challenges.

The electorate are impatient and Labour were always going to have a huge job to keep people onside and bought in to the (long) journey the country is on to any sort of recovery.

Their first 100 days should have been about solidifying the electorate's support for the journey but instead they have lurched from one own-goal to another and I think significantly distanced themselves from the electorate as they have behaved just like the Tories in many aspects of leadership (access to donors, clothing gate). Throw in spin on the £22bn gap (of which around £9bn was based on their own decisions), Winter Fuel payments ending and the attack on farmers (the very definition of working people) and it has been an utter disaster. They have a massive perceptual problem and seem incapable of delivering crisp messages that the people can get behind. Listening to members of the government trying to explain the intricacies and details of much of the aforementioned challenges is utterly painful to watch and people shut off after a couple of sentences.

In opposition you can get away with soundbites and when you get scrutinised you can bridge to "14 years of hurt" and "we're not them" and people will buy it. When you're in the hot seat those things sounds hollow and suggest you don't have the answers and people will turn on you very quickly.

It is in everyone's interests that they get it right because with a Tory party chasing the far-right vote because of Reform and Reform picking up disillusioned main political party voters then the alternative is really scary. Of course, we also have the threat from within the Labour party itself as if things don't go well for Starmer & co we could find Labour turning on itself.

 

 

"They sold everyone, directly or indirectly, on the notion that Covid, the energy crisis and the war in Ukraine had nothing to do with the sorry state of the UK and that it was 14 years of Tory rule and Truss' nightmare budget that was the source of all the country's woes. "

This simply isn't true. Global issues all play their own parts (as they do with other countries) but the UK govt had  been especially abject for years. Improvements could not be made with them in power. That's not to say everything is all roses when they go

To claim parties shouldn't try and sell themselves in an election is absurd - but if labour did overpromise or dig into specifics (which they partly couldn't because they didn't have their hands on the books) then we live in a country where a population and media is happy to punch on them and relect the shabby last govt

9 minutes ago, jazzer said:

So well put Rockets.

I mean if any argument I made was supported by some posters I would rethink it but thats just me

  • Agree 1

And where is this chatter? That bbc article  headlines with drama but concludes with a “meh” (also its conclusion about short shelf life of blaming last government should have a look at all the people who still think Labour crashed economy in 2008)

so that leaves which websites 

 

because a quick google suggests only websites I’d be ashamed to read.  But entirely as I expected

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