In 2016, the public sector pay bill (excluding nationalised corporations) was £179 billion. This includes the wages and salaries of public sector workers, the employer National Insurance Contributions and employers' pension contributions towards public service pension schemes. With such a large pay bill, even small percentage increases can lead to significant increases in the cost of employing public sector workers.
Before Ministers make final decisions on pay, they will seek the views of the eight independent Pay Review Bodies, which will consider the evidence on how best to ensure they can recruit and retain the very best people within public services, like giving people more flexibility over their working hours. They will report in spring 2018, at which point the Government will consider their recommendations and announce public sector pay awards for each of those workforces.
Every Labour government has left the economy and unemployment in a worse state and it is only because we have started getting the economy under control that we can pay for public sector services and workers. Public sector net borrowing as a share of GDP from April 2016 - March 2017 was 2.3 per cent, down from 4.1 per cent the previous year and down from 9.9 per cent in 2010, during the final year of the last Labour government.
Despite very stretched public finances, public spending has increased every year. Total Managed Expenditure is expected to be around £795 billion in 2017-18 and public sector receipts are expected to be around £744 billion. Government spending was last recorded at 42.1 per cent of GDP in 2016. Last year, the Government managed to raise 36.4 per cent as a proportion of GDP so the gap between 36.4 and 42.1 has to be borrowed.
In 2010, we inherited the biggest deficit in our history and we were borrowing £300,000 a minute. Now, after many difficult choices we are still borrowing £95,000 a minute and next year it is projected to still be as much as £75,000 per minute; savings must still be made.
ONS public sector productivity data for 1997-2010 shows that while private sector productivity grew at two per cent, public sector productivity actually fell by 0.2 per cent. We need the public sector to deliver more for less, as the private sector does.
The economy continues to grow and we have record levels of people in employment. However we are not out of the woods yet. It is simply not moral to continue to spend more than we can raise in tax, dumping the debt burden on our children and grandchildren; they will be paying for goods enjoyed by our generation at the expense of theirs.