After a two year pay freeze (and even longer in local government), the Chancellor announced today that pay increases in the public sector will be capped at an average 1% for the following two years. This comes at the same time as the proposed average 3.2% increase in pension contributions (phased in over 3 years), and inflation rates predicted to be around 3%. The TUC has calculated that this leaves public sector workers facing an average cut in their living standards of 16.5% by 2014-15.

There is also grim news on jobs, with the OBR estimating 710,000 public sector job losses by 2017 (see page 95). This figure is the total amount of public sector jobs the OBR predicts will go between the beginning of 2011 and the first quarter of 2017. It is a significant shift from the prediction set out in the last OBR report in March, which predicted 400,000 job losses between Q1 2011 and Q1 2016.

And the Chancellor’s promise to look at “how public sector pay can be made more responsive to local labour markets” will add to concerns that the government is moving to fragment national collective bargaining arrangements.

Localising and breaking up pay determination arrangements can lead to equal pay issues, entrench regional inequalities and lead to duplication of time and effort spent gathering data and bargaining in hundreds or even thousands of local bargaining units. There’s lots more on these issues here and here 

Research published by the Royal College of Nursing today finds that more than 56,000 NHS posts are set to be cut.  Half of these are clinical posts and one third of them are nursing roles. Particularly worrying is the finding that the pace of cuts is increasing. There are also a number of associated trends of cutting hours and replacing experienced staff with cheaper workers at lower grades.

The second example is the u-turn on waiting lists. One of Andrew Lansley’s early decisions as Secretary of State for health was to relax the 18 week target for the maximum time between referral and treatment, as part of an overall move away from targets in the NHS.  But last week it emerged that almost a quarter of a million patients (9.4%) on waiting lists at any time go more than 18 weeks without treatment. As UNISON pointed out in their response to the announcement, the cuts are an important underlying cause of growing waiting lists, and it does not seem that more resources will be made available to tackle the problem.

And of course, as all this goes on, the hugely damaging Health and Social Care Bill is still being debated in the House of Lords. Controversial votes on the role of the Secretary of State for Health and the autonomy of local providers have been postponed in order to avoid government rebellions. One of the key issues still to be debated is the clause that would remove the cap on the amount of money hospital trusts can make from private patients. The TUC and unions across the health service fear that removing the cap would further increase waiting lists, as cash-strapped hospitals allow private patients to jump to the front of the queue for treatment.

Members of the House of Lords have also been calling on Andrew Lansley to publish the risk register for the Bill, which the Information Commissioner has instructed the Department of Health to publish. Given the huge concerns about the dangers of the Bill that are uniting health workers , it is essential that the register is published to shed some light on the government’s own assessment of the risks.

The government is seeking an additional £2.8bn a year in contributions from members of public service pension schemes by 2014-15, phased in over the next three years. This is an average of 3.2% of pay, roughly a 50% increase on the contributions currently paid by many in the schemes (find more on our pensions justice site).  

The Treasury has said that those public service workers who earn less than £15,000 will not face any increase in the contribution rates they pay. But there is a very important caveat in that promise, which is that this is based on FTE: full time equivalent earnings.

For example, if an experienced nurse or teacher has an FTE salary of £28,000, but they work half-time and so their actual pay is around £14,000, they will be classed as earning £28,000 for the purposes of calculating their pension contributions.

The TUC’s figures show that 806,000 people are caught out in this way - 12.5% of public sector employees. And it is low-paid women who are overwhelmingly the ones affected, making up 90%, (732,000) of those caught in the trap. About one in six (15.8%) of public service workers have FTE earnings below £15,000 and so will escape the increase.

Women, who make up two-thirds of the public sector workforce, are already particularly hard-hit by the public sector pension changes. This false promise lets down hundreds of thousands more.

Earlier this year, it seemed that the Government had scored a significant and somewhat unlikely PR coup. They were pushed into a ‘listening exercise’ due to widespread opposition to the Bill and concerns from the Liberal Democrats which came to the fore at their spring conference. The Future Forum set up to look at the reforms made some useful recommendations about ways to improve the Bill, but didn’t go anywhere near far enough to deal with the fundamental concerns about the Bill. But the media was keen for a story about the political machinations behind the coalition, and so the Government managed to present themselves as having listened and responded to concerns and having overhauled the Bill.

In fact, the Bill that returned to the Commons yesterday is still a toxic combination of competition, markets and fragmentation that could shake the foundations of the NHS. The changes made following the listening exercise make minor improvements in some areas, but in others they leave the Bill more complex and muddled and make the system more bureaucratic and unaccountable.

To take just a few examples of the areas where we still have serious concerns:

The Bill still means competition instead of collaboration. The Government hasn’t followed through on the Future Forum recommendation to strengthen the emphasis on collaboration as the best way to improve care for patients. Instead, it still has a big focus on competition. This is despite evidence that the NHS is one of the most cost effective health care systems in the world – in a recent academic study it fared much better than the system in the USA, where competition is central. Much of Part 3 of the Bill, which includes the arrangements for the powerful economic regulator, Monitor, remains unchanged. In the original Bill Monitor had a duty to promote competition. That has now been amended to a duty to ‘prevent anti-competitive behaviour’ – which appears to have virtually the same meaning in practice. The Government is also pushing ahead with plans to allow ‘Any Qualified Provider’ to deliver NHS services, opening up swathes of the NHS to private and voluntary sector providers.

It still means private patients jumping the queue. The Bill removes the cap on the amount of money NHS hospitals can make from private patients. This wasn’t mentioned in the Future Forum report, although the Chair of the Forum, Steve Field, has said he now regrets not mentioning it. Professor Field said that the “gut feeling” from the listening exercise was that “the private cap should stay because people felt that would provide the protection”. What the removal of the cap could mean in practice is NHS patients being pushed to the back of the queue for care, while private patients jump to the front. With foundation trusts strapped for cash, the temptation to prioritise paying patients will be strong. It also makes it more likely that hospitals will be opened up to EU and UK competition law.

The Bill still means a fragmented system and a lack of accountability. Despite the Government’s assurances to the contrary, independent legal advice obtained by campaign group 38 Degrees has confirmed that, if the Bill goes ahead as currently drafted, the Secretary of State would no longer have the duty to provide a comprehensive health service. It would be up to local commissioning groups to determine not only what needs to be provided to meet the needs of the local population, but what is ‘appropriate’ to provide as part of the NHS. This was one of the issues highlighted this weekend by Baroness Shirley Williams, who believes it will lead to fragmentation, postcode variation and a lack of accountability.

There are still fears about lack of transparency. Private and voluntary sector providers will have a much bigger role delivering NHS services if the Bill goes through, but the Bill doesn’t hold them to the same standards of transparency as NHS providers. Foundation Trusts and commissioning groups will be required to hold their board meetings in public – although loopholes in the Bill will allow them to exclude members of the public in some circumstances. But it does not seem that even these relatively weak requirements will apply to non-NHS providers.

The reform is getting even more expensive. All of this comes at a time when the NHS has the tightest financial settlement in many years and is being asked to make ‘efficiency savings’ worth £20bn by 2014-15 and to cut management costs by 45 per cent. The cost of the reorganisation is estimated to be up to £3bn, and the Department of Health’s own figures show this is rising by £1 million a day. The Government hasn’t yet produced a revised impact assessment to show what they estimate the latest cost of the reorganisation will be – this is expected later this week, after the MPs have debated the reforms. We already know that tens of thousands of jobs are being cut, including clinical posts.

The Government continues to claim they have the support of health bodies – David Cameron repeated this line at PMQs today. But the evidence all points in the opposite direction: to massive concern and opposition from across the health service. Unions and professional bodies representing doctors, nurses, physiotherapists, midwives, cleaners, administrators, managers, porters, radiographers, community and mental health professionals and many, many more have spoken out. The fight for the future of the NHS won’t end in the Commons, and we’ll continue to lobby and campaign if the Bill heads to the Lords after this evening’s vote.

The research is based on 265 Freedom of Information responses from local councils across England, and shows that charities face a net reduction of £110 million this year. In fact, even this figure is likely to be a significant underestimate, given that a number of large councils did not respond to the FOIs and some are yet to decide exactly where the cuts will fall.

The largest number of charities is affected in Birmingham City Council (though of course this is also the largest local authority), where 191 organisations are facing cuts. London is badly hit, with more than 400 charities across London affected by cuts from individual councils and also by the cross-council organisation London Councils.

The list of charities facing cuts ranges from large national charities to small local groups and includes:

• 112 adult care charities
• 142 older people’s charities
• 382 children’s and young people-related charities
• 151 disability-related charities

Also affected are refugee support groups, charities providing support to victims of domestic violence, housing and homelessness charities, carer’s groups, Citizens Advice Bureaux and many more.

Councils have been put in the position of choosing which vulnerable groups should be affected by cuts. Many more deprived areas have been hardest hit by central government cuts, because of the combination of the reduction of specific grants generally aimed at more deprived areas, and the removal of ring fencing which has ‘smoothed’ funding across councils – leaving more deprived areas facing larger cuts than wealthier areas. For instance, the local authorities facing the highest cuts this year (8.9%) include Hackney, Liverpool, Tower Hamlets, Knowsley, Doncaster and South Tyneside. Those with a much smaller decrease in funding (1%) include Windsor and Maidenhead, West Sussex, Buckinghamshire and Richmond upon Thames.

Charities face triple whammy at the moment, with cuts to the statutory funding they receive from central and local government, combined with falling donations (corporate and individual) and a rising demand for their services.

Many charities will struggle on and continue to provide services, or scale back certain projects. But there is evidence that others are taking more drastic measures. The London Voluntary Service Council surveyed their members last month and found that over half (51%) of voluntary and community organisations responding to the survey had closed services last year due to cuts.

The cuts are a real false economy, because many of these groups provide preventative services such as helping people to live healthier lifestyles or live independently in their own homes if they need support to do so, working with young people to prevent crime and antisocial behaviour, or providing respite support for carers. Without these voluntary sector support services people are more likely to end up in the statutory sector, which of course is already hard pressed by cuts.

The cuts also beg the question – what about the Big Society? We saw the launch of the long awaited Open Public Services white paper last month, which heralded a ‘big society’ vision for public services, with charities and voluntary groups stepping in to take over public services. But with these groups facing massive cuts, it seems that it will be large private companies who are able to step in and take the opportunities offered by the government’s ‘opening up’ of public services.

Myth 1: Public service pensions are gold-plated

The Commission firmly rejected the claim that current public service pensions are ‘gold plated.’
Final Hutton Report (p26).

Half of public sector pensions in payment are less than £5,600 a year. In local government half of pensioners get less than £3,000.

A YouGov poll of 2,500 people in February 2011 asked what the average public sector pension should be. The average across all responses was £17,088. Forty-four per cent said it should be more than £15,000. Almost half (49%) of respondents believed the average public sector pension is more than £10,000, and only 23% believe it is less than £10,000.

To see some solid gold pensions, take a look at some of the top private sector boardroom pensions. The TUC’s annual PensionsWatch survey looks at the pensions of top directors in the UK’s biggest companies. Last year’s study found that the top directors had pension pots that would pay out an average of almost £300,000 per year. Directors in the private sector often have separate, more generous pension arrangements than their staff. In the public sector senior managers are in the same schemes as the rest of the workforce

Myth 2: Public service pensions are unreformed

Two major changes have been made to public sector pensions – one by negotiation and one imposed by the Government. Together they reduced the value of public service pensions by around 25 per cent even before the current negotiations started.

Negotiations with the previous Labour government led to changes to the public service pension schemes that reduced the value of pensions to members by around 10 per cent, according to the interim Hutton report (page 9), and the future costs by around 14% according to the National Audit Office (p.5). Changes included increasing the normal pension age for new members in most of the schemes (and for all members in local government), and in the civil service a new ‘career average’ pension scheme was set up. An important part of the package of changes was ‘cap and share’ arrangements.  These meant that the cost of unexpected increases in life expectancy would only be borne by employers up to a certain cap. After this cap, members would bear the full cost of future increases. Back in 2009 the Treasury estimated that cap and share would save £1 billion a year through increased  contributions from next year onwards.

In June 2010 the Chancellor announced without warning that public service pensions would be uprated according to the Consumer Prices Index (CPI) rather than the Retail Prices Index (RPI). The switch to linking the indexation of pensions in payment to the CPI measure reduces the value of pensions by a further 15%. A number of unions are currently taking legal action to challenge the decision to cut the value of pensions in this way.

Myth 3: Public sector pensions are unsustainable

How best to measure the costs of commitments that go a long way into the future is controversial. Those who want to claim public sector pensions are unsustainable try to express all these future commitments as if they were a bill that had to be paid today. This produces some scary numbers but is a completely inappropriate measure given the long term nature of pensions.

The NAO and the Hutton Commission both rejected this approach and said that the test of the long term affordability of public sector pensions is what proportion of GDP future payments will require.

The NAO found that even before the switch to CPI indexation the cost was sustainable:

Government projections suggest that the 2007-08 changes are likely to reduce costs to taxpayers of the pension schemes by £67 billion over 50 years, with costs stabilising at around 1% of Gross Domestic Product (GDP) or 2% of public expenditure. This would be a significant achievement.

Public Accounts Committee, The impact of the 2007-8 changes to public service pensions

Once CPI indexation is taken into account the proportion falls clearly. The Hutton report (chart 1.B) shows that the central projection of future costs (before any further changes) falls from 1.9% of GDP to 1.4% by 2060.

Myth 4: The government is protecting the low-paid

In Danny Alexander’s speech on 17 June, he said that the government was proposing to limit the contribution increase to those earning more than £15,000, and to cap the increase paid by those on £15,000 to £18,000 a year at 1.5%. So the Government argues that according to their proposals only those earning over £18,000 will bear the full brunt of the increase and those earning under £15,000 won’t pay any of the increase. But in the briefing issued ahead of the the speech is was clear that these figures were based on ‘full time equivalent’ salaries.

The ‘full time equivalent’ point is important because many low-paid staff in the public sector would earn over the £15,000 threshold if they worked full time, but they have low take home pay because they work part-time. So someone who works in a job which if full-time meant they would earn £16,000 a year, but actually works half-time and thus earns £8,000 will not be protected from the increase. We estimate that this could affect over a million part time workers, the vast majority of them women. Nicola and Channel 4’s Fact Check both have more on this.

Nigel has been tracking the YouGov polling on the cuts for a few months now, most recently on False Economy and will continue to do so. The Ipsos MORI poll is very much in line with the trends shown by the YouGov data, showing widespread concern about the speed, depth and unfairness of the cuts.

Unions from across the health sector have been working hard with other campaigners and patients groups to expose the dangers posed by the Bill. Under the banner of ‘All Together for the NHS’, unions representing nurses, doctors, midwives, physiotherapists, radiographers, support staff, paramedics, managers and many more are coming together to call on the Government to think again. The key arguments behind the campaign are here.

Friday 1st April will be ‘All Together for the NHS day’, with health workers and service users getting together to lobby key MPs in their constituencies and campaigning to raise the profile of the issue through events all over the country.

Sign up at the Facebook event page to follow the plans for the day and get in touch with other campaigners. And if you’re a twitter person, the hashtag to use is #1AprilNHSday.

False Economy will feature all the events, so if you are looking to find out what is happening in your local area then keep an eye on the site, and if you’d like to promote an activity you are organising you can upload the information. If you missed False Economy’s excellent expose of the scale of job losses already hitting the NHS it is essential reading.

The health unions working together on the campaign have agreed a set of simple messages that you might find useful in marshalling your arguments.

And last but not least, if you haven’t signed the online petition being run by 38 Degrees, here it is – brought to you by the people that led a certain online campaign against the forests sell-off…

The proposals remove any doubt about whether or not the Government’s reforms are driven by ideology. Despite evidence that privatisation does not deliver better services, the Government plans to push ahead with reforms that will mean private companies and other bodies can compete to deliver virtually all public services. Cameron’s article mentions exemptions for the judiciary and the security services but everything else appears to be up for grabs.

Of course, education and health are already seeing this approach to public service delivery being pushed through in the form of wide-ranging legislation. The Health and Social Care Bill allows ‘Any Willing Provider’ to deliver NHS services, removes the cap on how much income Foundation Trusts can make from private patients and devolves commissioning to consortia of GPs – some of whom are already passing 100% of this work onto private companies.

There are many reasons why the plans are misguided, dangerous and undemocratic. Here are five of them:

1. It doesn’t mean better results: The TUC responded to the call for evidence to inform the white paper, setting out evidence from a number of sectors about how privatisation often leads to poorer quality and higher costs. For instance, price competition in health in the early 1990s led to a fall in clinical quality, the outsourcing of hospital cleaning in the 1980s was linked to increased hospital infections, and evidence from the equivalent of free schools in the USA found that more than a third had results that were ‘significantly worse’ than their state-school counterparts. Since railway privatisation, the taxpayer subsidy to the industry has actually increased rather than decreased (see p.12 of this recent report for the DfT), at the same time as standards have declined and prices for passengers have risen.

2. It does mean a postcode lottery: Localism is an attractive word and as a policy it has potential benefits, enabling providers to better tailor services to the needs and demography of the local population. But coming at the same time as drastic cuts and the Government’s Open public services agenda, what it will mean in practice is vastly diverging levels of service provision and quality between different areas. Whilst wealthier individuals will be able to travel or pay to find the best services, those who don’t have the resources to do so will rely on overstretched local provision.

3. Bureaucracy will increase, not decrease: Although the Government’s stated aim is to reduce bureaucracy, in fact the plans are likely to lead to increased bureaucracy and spending on transaction costs and consultants. The process of tendering, awarding and overseeing reams of contracts will be incredibly resource intensive. Threats to national collective arrangements for bargaining over pay would lead to the replication of detailed and time-consuming negotiations in every school and local authority rather than a clear, equality-proofed national approach.

4. The changes are anti-democratic: Removing public services from democratic control establishes a contract-based culture which is likely to create plenty of work for lawyers but will weaken democratic oversight. Using a market approach to accountability rather than a democratic approach is likely to distort outcomes and leave the most vulnerable – who might not have the financial or other resources needed to exercise choice – without a voice. Local councillors, already stretched by the pressures of central government cuts, will struggle to adequately scrutinise and challenge the multiple providers in a fragmented system.

5. Public service workers’ living standards will bear the brunt: Forcing down pay, terms and conditions is the quickest way for private providers to maximise profits. Combined with inflation, a pay freeze for public sector workers and changes to pensions, this could add up to an unprecedented squeeze on living standards. TUPE provisions may well protect transferred staff, but the removal of the ‘Two-tier code’ means that there is little in the way of safeguards for new staff .

Ultimately what these changes will mean is private companies making profit from the services we all rely on. The magnitude of these changes and the threat they pose should not be underestimated.

In a speech and interview this morning, the Prime Minister defended the Government’s plans for public service reform, especially in the NHS. On the Today programme this morning (listen here or see 08.53am on the Guardian blog for a summary), he argued that the reforms were not about saving money, but about improving health outcomes and patient experience. He also insisted that the reforms were not about ideology. These themes were repeated in his speech later in the morning and deserve some further exploration.

On the first point, it is worth a more detailed look at the concerns set out by health professionals including health unions (most have their responses on their websites) and the NHS Confederation. Virtually all of these are ultimately about the impact the changes will have on patients. For those interested in finding out more, I would recommend a look at the detailed responses to the white paper by unions and other health organisations – most are available on their websites.

They argue that the marketised vision of the NHS set out in the Government’s proposals will affect patient care by putting different parts of the health service in competition with one another, leading to fragmented and disjointed pathways of care for patients and undermining collaboration and the sharing of best practice. It will also increase administrative and other costs, with public funding being wasted on transaction costs instead of patient care.

The private sector has a record of failing to deliver quality and value for money in the NHS – perhaps most famously evidenced by the rise in hospital infections after compulsory competitive tendering led to the outsourcing of hospital cleaning in the 1980s. As today’s letter  says:

“There is clear evidence that price competition in healthcare is damaging. Research by economists at Imperial College shows that, following the introduction of competition in the NHS in the 1990s, under a system that allowed hospitals to negotiate prices, there was a fall in clinical quality. With scarce resources there is a serious danger that the focus will be on cost, not quality”

Much of the focus of controversy has been the plan to hand £80bn of NHS funds to consortia of GPs in a fundamental re-shaping of the way services are commissioned. But other major changes signalled by the reforms could also have wide-ranging effects. One of these, also highlighted by the joint letter, is the plan to allow “any willing provider” to compete to provide NHS services, with the NHS no longer being the preferred provider. It will ensure that private companies can bid for services – and at below the current mandatory tariff. Again, the ultimate impact will be on patient care, with the danger of a race to the bottom, fragmentation in provision and problems with workforce planning for providers who don’t know from one year to the next whether they will be providing a service.

The financial pressure on hospitals and the removal of the cap on how much private income a hospital trust can make presents the frightening scenario of a two (or more) tiered system, with NHS patients pushed to the back of the queue in favour of patients who can pay for care.

A recent NHS Confederation  report also questions the weak accountability mechanisms set out in the white paper, asking how quality can be maintained in the context of price competition and saying it is unclear whether the proposed measures to regulate quality will be sufficient.

The Prime Minister’s second point was that the changes are not being driven by ideology. But if the evidence does not suggest that they will improve quality of care, and the upheaval of implementing the reforms will cost up to £3bn rather than save money, what other reason is there? As the NHS Confederation said, with some restraint: “The absence of any compelling story about why the reforms are necessary or how they will translate into improved outcomes is of concern”.

Anyone in doubt about the overall vision for public service reform under the Coalition government could do worse than look at the call for evidence on public service reform that was quietly issued at the end of November, with a 5 January deadline for responses. The paper asks a series of quite specific, detailed questions about the implementation of changes to public services. But it did not seek public input on the issues of principle and ideology that sit behind the reforms. Starkly set out in the paper, this is that the state should no longer be the ‘default provider’ of public services and that there should be a far greater role for private and voluntary sector providers, with market mechanisms determining their involvement and providing a market with ‘free entrance and exit’ for providers, and the Government setting proportions of public services that will be delivered by non-state providers. A White Paper due in February will pull these ideas and more together, but with the Health Bill and next week’s Education Bill, they already seem to be charging full steam ahead.

Also today, a report in the Local Government Chronicle (subscription required) reveals that the Government has commissioned the head of Job Centre Plus to produce a report on the impact of the spending review cuts on employment in different parts of the country. The most deprived local authority areas are set to be hardest hit, partly as a result of the removal of ring-fencing for Area Based Grants, which were used partly to target resources at the geographical areas of greatest need.

For some institutions such as the National Coalmining Museum in Wakefield, this represents about 80% of their funding. Tyne and Wear Archives and Museums is not a single institution, but a body that manages a dozen museums and galleries in Tyne and Wear, all of which are expected to be affected as this article from the Newcastle Journal explains. 

The list of those affected is:

• Geffrye Museum 
• Horniman Museum and Gardens
• Museum of Science and Industry, Manchester (MOSI)
• National Coalmining Museum for England
• People’s History Museum
• Tyne and Wear Archives and Museums
• Design Museum

Osborne said that the government expects much of the reduction to be “achieved through natural turnover”, with decisions left to public sector employers; but redundancies are seemingly inevitable given the drastic scale and speed of the cuts.

The CSR also flags the possibility of proposals from employers on short-time working or “pay restraint” (on top of the current freeze?!). While unions might consider getting round the table to protect jobs as they did in a number of private sector workplaces during the recession, there will be suspicion that this is just spin to distract from redundancies, pay freezes and pension increases. There will also be concerns that attempts to do this at a local level might chip away at national collective bargaining arrangements.

The government’s position that job losses in the public sector will be made up for by private growth also looks increasingly untenable. When unemployment is still high, with freezes and redundancies across the public sector and weak growth in the private sector, where will people find suitable work?

As Nicola said in last week’s Labour Market Report, the number of vacancies has now seen three consecutive monthly falls.

In September there were 459,000 vacancies across the economy, 30,000 down on the quarter. Since the start of the recession in April 2008 the vacancy level has fallen by 233,000 (34 per cent). As a result of the quarterly vacancy drop there was a slight increase in the ratio of unemployed people to jobs – which is now 1:5.2

And the picture is varied across the country. TUC analysis in July showed massive regional variations with a high of 43 claimants competing for each vacancy in Hackney North.

So the number of unemployed people to vacancies is rising. And analysis of past downturns shows that jobs were not created at anything like the rate needed to account for losses in the 1980s and 1990s recession. The OBR figures produced this summer made highly optimistic predictions of the rate at which employment will rise.

A survey of private sector employers this week also found some reticence about taking on former public sector workers. It’s not entirely clear what underpins the findings of the survey, which was carried out for recruitment firm Hays, but it adds to the doubts about the government’s suggestion people will be able to move easily between sectors.

The other development that was evident in the latest unemployment figures was that female unemployment has continued to rise compared to a slight fall in male unemployment in the same period. This trend is likely to continue as the public sector cuts bite, given that more women’s jobs are in the public sector: around 40 per cent of women’s jobs are in the public sector compared to 15 per cent of positions held by men, according to the Annual Business Inquiry.

The Chancellor clearly indicated that contribution rates would rise, although he accepted Lord Hutton’s recommendation that increases should be staggered and “progressive” – of course the devil will be in the detail as to whether this is borne out when reforms are proposed and negotiated. According to the CSR papers (page 38) the savings figure of £1.8bn per year by 2014/15 is equivalent to 3 per cent on average, to be phased in from 2012.

Coming at a time of pay freezes, rising inflation and redundancies, increasing contribution rates means a further cut in take home pay. Contribution increases could also come on top of those already in the pipeline in some schemesdue to revaluations under the existing “cap and share” arrangements. And there is also a real risk that people feeling the squeeze could decide to leave pension schemes if contributions rise, leaving them without savings for retirement.

The Chancellor also accepted the other findings of Lord Hutton’s interim report, including an immediate consultation on the appropriate discount rate for public service pensions. A clear explanation of the discount rate and why the current rate is suitable is here, and this is an issue the TUC raised in evidence to the Commission. In fact, Lord Hutton’s report said that the current discount rate was “at the high end of what is appropriate”. Any changes could lead to further increases in contributions, and potentially play havoc with accounting for major infrastructure spending, given that the same rate is used for this as for pensions.

In a move certain to cause anxiety among unions and their members in the public services, Osborne also announced a review of the Fair Deal on pensions. The Fair Deal says that new employers must provide pensions that are ‘broadly comparable’ overall to the pension scheme provided in the public sector for TUPE transferred staff. In doing so it protects the pension provision of many low-paid workers – particularly women – in contracted- out services such as cleaning and catering.

“I want to see the commission’s auditing function become independent of Government, competing for future audit business from the public and private sector. These proposed changes go hand in hand with plans to create an army of armchair auditors – local people able to hold local bodies to account for the way their tax pounds are spent and what that money is delivering.”

The council has estimated that 3,000 posts are at risk in a drive to save £150 million. UNISON have urged Nottinghamshire to rethink, emphasising the effect on frontline services and the knock-on effects on the economy in the county, which has already been hit hard by the recession.

The study was conducted by finance advisors Grant Thorton for the pteg group, which is made up of passenger transport authorities from the six city-regions. The detailed analysis concludes with a warning that transport spending is likely to take a disproportionate hit, and that funding for transport in the city-regions outside London is likely to be cut to such an extent that capital spend will fall by 90% by 2014-15.

Interestingly, this comes shortly after the Transport Select Committee launched a new inquiry to follow up the influential Eddington Report (2006), which looked at the role of transport in the economy, particularly in regional economic growth and development. I’m sure this new report will be high on their reading list.