The Budget 2010 has outlined plans on how to further honour the £20 billion of savings across the public sector by 2012-13, as announced in the 2009 Pre-Budget Report.
Plans include a one per cent cap on public sector base pay uplifts across the public sector for 2011-12 and 2012-13, generating savings of £3.4 billion a year by 2012-13.
It is also outlined that staff should show leadership in pay restraint and there will be no pay uplift in 2010-11 for senior public sector staff including the senior civil service, the judiciary, consultant doctors, senior managers in the NHS and self employed GPs and dentists.
Plans include that public sector expenditure will grow at a slower annual rate between 2011-12 and 2014-15, alongside reduced levels of public sector net investment and a new Code of Practice on setting pay for senior public sector workers, following the pay freeze for these workers in 2010-11.
Reforms will be implemented to ensure public pensions are affordable and savings will need to be identified across every part of the public sector by delivering services more efficiently.
Chancellor of the Exchequer, Alistair Darling said: "In December I set out savings of £4.4 billion in public sector pay and pensions by 2012-13. There will be reductions in the pay bill for senior civil servants."
"Overall, we intend that public pay settlements will be held at a maximum of 1 per cent for the two years from 2011. We will also implement reforms to ensure public pensions are affordable. Second, we need to identify savings across every part of the public sector by delivering services more efficiently."
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