The Chief Secretary to the Treasury (Danny Alexander)
The autumn statement announced that public sector pay awards will average 1 % for each of the two years following the end of the current pay freeze, and that departmental budgets will be adjusted in line with this policy.
The pay policy will be applied to health, schools, and international development, but the savings will be recycled within existing budgets.
Departmental resource DEL budgets (excluding depreciation) will adjusted by the following amounts:
2012-13 | 2013-14 | 2014-15 | |
|---|---|---|---|
Education1 | -4 | -25 | -42 |
Transport | -6 | -14 | -14 |
CLG Communities | -3 | -6 | -6 |
CLG Local Government2 | 0 | -240 | -497 |
Business, Innovation and Skills | -9 | -19 | -19 |
Home Office3 | -14 | -68 | -135 |
Justice | 0 | -43 | -85 |
Law Officers’ Departments | 0 | -4 | -9 |
Defence | 0 | -103 | -197 |
Foreign and Commonwealth Office | 0 | -3 | -7 |
Energy and Climate Change | -1 | -3 | -3 |
Environment Food and Rural Affairs | -10 | -22 | -22 |
Culture Media and Sport | -4 | -9 | -9 |
Work and Pensions | -32 | -72 | -72 |
Scotland | -4 | -23 | -38 |
Wales | -2 | -19 | -35 |
Northern Ireland | -2 | -10 | -15 |
HM Revenue and Customs | 0 | -24 | -47 |
HMT | -1 | -1 | -1 |
CO | -2 | -4 | -4 |
SIA | 0 | -11 | -11 |
Small and Independent Bodies | 0 | -4 | -4 |
Total4 | -95 | -727 | -1272 |
1 The budget for schools will be unaffected 2 Local Government DEL includes funding for fire and rescue authorities and some police funding (shared with the Home Office) 3 Home Office DEL includes some police funding (shared with local government) 4 The total DEL reductions are greater than the total managed expenditure (TME) savings scored in the autumn statement, because the TME savings take into account the costs of reduced pension contributions that result from lower pay growth |
Reductions to budgets will be made immediately and will be reflected at the main estimate, which will go before Parliament next year.
This represents an average reduction of approximately 1% of affected resource budgets in 2014-15.
As a result of this reduction in departmental budgets, there will be a consequential Barnett reduction in the resource allocation to the Scottish Government, Welsh Government, and Northern Ireland Executive. However, the overall effect of the autumn statement will be a net increase in current budgets for the devolved Administrations. Scotland will see an increase of £69 million, Wales an increase of £22 million, and Northern Ireland an increase of £37 million over the spending review period as a result of the measures announced.
Departments will have flexibility over how they implement the pay policy across their work forces, with pay review bodies and negotiating machinery playing their usual role.