In the pre-Budget report 2009 the Government once again recognised that public sector workers are at the heart of delivering world-class public services and supporting long-term economic growth, prosperity and fairness and highlighted that, following substantial investment in public sector pay since 1997, pay restraint will be important to support front-line delivery while ensuring sustainable public finances over the medium term.
The 1 per cent. pay cap will generate £3.4 billion of departmental savings by 2012-13, helping to protect front-line service delivery and jobs in the coming years. A modest proportion of the revenue raised from the increase in national insurance contributions announced at PBR to help protect front-line public services will come from public sector employers. The PBR identified almost £17 billion of efficiency savings gained from Smarter Government and the Public Value Programme that will enable improvements in public services to be sustained.