The Spending Review - spending and wage growth

26 June 2013

By Paul Cleal, Partner and PwC Government and Public Sector Leader

We’re seeing money moving around within the overall envelope rather than new cash. In some cases, as in infrastructure, despite positive announcements of new plans, the overall numbers are still decreasing.

Overall more than 50% of public spending is ring-fenced or protected from cuts, which concentrates the pain in the unprotected departments.  Across those unprotected departments the pain has been shared relatively evenly, with those focused on defence, security and growth fairing better than the others.

NHS funding remains protected but demand is rising for services, and costs are going up. Further blending of social care and health budgets has to be coming.

PwC analysis shows real wage growth will be more subdued than in past recoveries. The further public sector pay restraint announced today will contribute to the slow pace of recovery.

Lots of new private sector jobs have been and will continue to be created, but are they 'good' jobs? In work, poverty is on the increase as many people are in part-time, temporary and low paid employment.

For more analysis on the Spending Review 2013 visit www.pwc.co.uk/spendingreview

Paul Cleal
Read Profile  |  Contact via email  |  Tel: +44 (0)20 780 45603

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