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Public Expenditure

Volume 503: debated on Monday 11 January 2010

To ask the Chancellor of the Exchequer, with reference to the pre-Budget report of 9 December 2009, Official Report, columns 359-71, what effect the (a) cap on public sector pay and (b) increase in national insurance contributions will have on expenditure on (i) the national health service, (ii) the police force and (iii) schools. (307624)

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.