Pre-Budget Report 2009 - KPMG head of public sector: "Triple-blow for public sector workers”
"The Chancellor's policy of protecting 'front-line public services' comes with a hefty price for public sector workers".
Wednesday, 9 December 2009
Alan Downey, head of public sector at KPMG, comments on the Chancellor's plans to cut public spending:
"The Chancellor's policy of protecting 'front-line public services' comes with a hefty price for public sector workers. They will be hit in three ways: First, pay increases will be capped at one percent in 2011-12 and 2012-13, that is a real terms cut in pay for two years running. ”
"Second, public sector workers will be required to make a bigger contribution to their pensions, at a total cost of £1bn a year. Finally, public sector workers like those in the private sector will pay an extra 0.5% in national insurance contributions.
Many public sector workers will be asking themselves whether it might not be preferable to cut front line services, so that their pain is shared to some degree with the recipients of benefits and services.”
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About KPMG: KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with 11,500 partners and staff. The UK firm recorded a turnover of €2.2 billion in the year ended September 2008. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 148 countries and have more than 113,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss cooperative. KPMG International provides no client services.