By Mike Thatcher
27 November 2009
The public sector should have introduced a pay and recruitment freeze last year and must now curb final-salary pensions, the director general of the British Chambers of Commerce has claimed.
David Frost, speaking at the annual CIPFA in Wales conference on November 19, said that the private sector had taken this approach, but public services had yet to respond adequately to the financial crisis.
‘If the government had done what our members had done in the middle of 2008, then we would be in a much better place now,’ he told delegates at the Vale of Glamorgan conference.
‘We don’t understand why the prime minister and the chancellor did not say that there would be a 0% pay increase in public sector pay right across the board.’
Recruitment freezes were now the norm in the private sector, and he urged public bodies to do the same.
Answering a question from Public Finance, Frost said that final salary pensions also needed rapid reform. ‘There is undoubtedly a pensions apartheid between public and private sectors and we have got to face up to that,’ he added.
‘There has been endless talk about this, but little action.’
Frost also criticised the growth in public sector employment. He said that in Birmingham, for example, there had been a net loss of 55,000 private sector jobs and a net increase of 89,000 public sector jobs between 1997 and 2007. ‘That is unsustainable in a twenty-first century competitive economy,’ he warned.
27 November 2009
The public sector should have introduced a pay and recruitment freeze last year and must now curb final-salary pensions, the director general of the British Chambers of Commerce has claimed.
David Frost, speaking at the annual CIPFA in Wales conference on November 19, said that the private sector had taken this approach, but public services had yet to respond adequately to the financial crisis.
‘If the government had done what our members had done in the middle of 2008, then we would be in a much better place now,’ he told delegates at the Vale of Glamorgan conference.
‘We don’t understand why the prime minister and the chancellor did not say that there would be a 0% pay increase in public sector pay right across the board.’
Recruitment freezes were now the norm in the private sector, and he urged public bodies to do the same.
Answering a question from Public Finance, Frost said that final salary pensions also needed rapid reform. ‘There is undoubtedly a pensions apartheid between public and private sectors and we have got to face up to that,’ he added.
‘There has been endless talk about this, but little action.’
Frost also criticised the growth in public sector employment. He said that in Birmingham, for example, there had been a net loss of 55,000 private sector jobs and a net increase of 89,000 public sector jobs between 1997 and 2007. ‘That is unsustainable in a twenty-first century competitive economy,’ he warned.
