Chancellor Alastair Darling made his budget statement this week on Wednesday 24th March. There are some glimmers of hope for public sector services and possibly the axe we’ve been expecting didn’t fall as heavily as we had feared.
Of most significance from this year’s Budget, from an employment perspective, was the Chancellors’ announcement that ‘The Young Person’s Guarantee will be extended until the March 2012. This means that for the next two years no-one under 24 will need to be unemployed for longer than six months before being offered work or training’.
I see this as a positive announcement in the support of young people not in employment, education or training (NEET), as we know this recession has had a particularly adverse impact on young people and their prospects of finding meaningful employment and a meaningful place in society. This will help support our work in the public sector to stimulate jobs and training for 16-24 year olds, in particular via apprenticeships and work experience.
PUBLIC SECTOR AND PUBLIC SPENDING
Borrowing this year should be £11 billion less than forecast at £167 billion. This will mean that debt is £100 billion lower than was expected at last year’s Budget. The government will stick to planned levels of overall departmental spending in 2010-11 to help support the economy.
PUBLIC SECTOR PAY IMPLICATIONS
As we expected measures announced in the budget included:
- a new code of practice on setting pay for senior public sector workers, following the pay freeze for these workers in 2010-11. Whilst this is financially prudent, it may have challenges for us when it comes to competing for the best leaders and the recruitment and retention of them
- the government will seek a 1% cap on increases in public sector basic pay for 2011-12 and 2012-13. Again this may create some recruitment and retention issues
- halving spending on consultants, reducing the number of quangos and using online systems to provide information and advice to the public. The use of different communication channels to provide greater efficiency for tax payers makes sense. Employing consultants is not always necessarily bad, but this is an area that requires careful review
The government aim to make savings will be made by moving civil servants from more expensive London offices to other places around the country. In the long-term, the number of civil servants in London will be reduced by a third. Step one, 15,000 posts will be relocated within the next five years. I have some concern about whether this will actually be a false economy, as locating employment in London and the South East tends to have the best return on investment, given the general levels of economic vibrancy in that region – so we will have to see how this pans out.
In total, over £20 billion worth of savings have been identified to reduce borrowing and the government aims to protect front-line services. As we enter a period of significant public service retrenchment, it is axiomatic that front line services to our vulnerable citizens should be prioritised.
It would be great to get your thoughts on this week’s Budget. Leave a comment on this blog post or become a PPMA fan on Facebook and post a response there.
Have a great weekend!
Dean Shoesmith – PPMA President