By Paul Gosling
2 October 2009
Former trade minister and CBI director general Lord Digby Jones said cuts had to be made in public sector pay and pensions.
He warned delegates at CIPFA’s Northern Ireland conference that failure to address the growing gap between public and private sector rewards would create social tension.
‘We are heading towards an apartheid,’ said Jones. ‘If we are not careful we are going to get an ever-decreasing private sector to pay the tax in order to have an inefficient public sector.
‘What will happen, fundamentally, is
that it will come apart and we will get social division, which is not going to be very pleasant.’
Jones said that the traditional argument for better public sector pensions was that pay lagged behind that of the private sector – but median public sector pay was now £700 a year higher than in the private sector.
‘The public sector has caught up. So where is the logic for them to have a significantly better pension, which the private sector has to pay for?’ Jones asked. ‘It can’t go on. We can’t afford it.’
Jones praised the improvement programmes implemented by local government. ‘I think the change in local authorities in Great Britain has been fabulous,’ he said.
Jones added that the forthcoming rationalisation of district councils in Northern Ireland should be recognised as an opportunity to create a single back-office service for all the councils.
‘The problem with that is that lots and lots of jobs go in the back office. But that is how you save money.’
Another opportunity for large cost savings would be achieved by reducing the number of MPs, added Jones. The large number of MPs reflected the time when they had to travel to their constituencies by horse and carriage.
‘We are still running Westminster in the way we did 150 years ago. We have a structure of government that is not fit for the twenty-first century.
‘The system of delivery needs to fundamentally change,’ he added.
2 October 2009
Former trade minister and CBI director general Lord Digby Jones said cuts had to be made in public sector pay and pensions.
He warned delegates at CIPFA’s Northern Ireland conference that failure to address the growing gap between public and private sector rewards would create social tension.
‘We are heading towards an apartheid,’ said Jones. ‘If we are not careful we are going to get an ever-decreasing private sector to pay the tax in order to have an inefficient public sector.
‘What will happen, fundamentally, is
that it will come apart and we will get social division, which is not going to be very pleasant.’
Jones said that the traditional argument for better public sector pensions was that pay lagged behind that of the private sector – but median public sector pay was now £700 a year higher than in the private sector.
‘The public sector has caught up. So where is the logic for them to have a significantly better pension, which the private sector has to pay for?’ Jones asked. ‘It can’t go on. We can’t afford it.’
Jones praised the improvement programmes implemented by local government. ‘I think the change in local authorities in Great Britain has been fabulous,’ he said.
Jones added that the forthcoming rationalisation of district councils in Northern Ireland should be recognised as an opportunity to create a single back-office service for all the councils.
‘The problem with that is that lots and lots of jobs go in the back office. But that is how you save money.’
Another opportunity for large cost savings would be achieved by reducing the number of MPs, added Jones. The large number of MPs reflected the time when they had to travel to their constituencies by horse and carriage.
‘We are still running Westminster in the way we did 150 years ago. We have a structure of government that is not fit for the twenty-first century.
‘The system of delivery needs to fundamentally change,’ he added.
