The BBC revealed today that UK public sector staff will lose automatic annual increases in pay rises as part of a GBP11.5bn spending cuts package for 2015/16 announced by Chancellor George Osborne.
According to the BBC, the UK government will make reforms such as ending ‘progression pay’ in favour of performance related increases and the chancellor was quoted by the BBC as saying it was “deeply unfair” to public servants who did not get it and the private sector who paid for it.” Automatic pay rises would be removed for time served in schools, NHS, prisons and police, however the armed forces are exempt from these reforms.
The chancellor is said to have been forced to prepare the spending cuts for 2015/16 because of a slower than expected economic growth and deficit reduction. He reportedly stated that the cuts would be done in a fair way and would boost growth. The reforms also include a 10% budget cut for the department for communities and local government; however it was confirmed by the chancellor that the security services, the heath service, schools and foreign aid will continue to be protected from budget cuts.
A cap on welfare, but no further cuts to benefits, was also announced in the chancellor’s statement. It is estimated that about one third of government spending, approximately GBP10,000 per household, is used for welfare and pensions, while health, cost around GBP6,200 per household and education costs per household is almost GBP4,500 annually.