Comprehensive Spending Review 2010: key points for HR

Here are the HR-related announcements in the Comprehensive Spending Review that I have found so far. All the documentation is now on the HM Treasury website, including the full report (PDF format, 2.1Mb).

On jobs, the Chancellor reiterated forecasts made by the Office for Budget Responsibility earlier this year that 490,000 public sector jobs were likely to go by 2014/15. Look out for revised forecasts from the OBR on 29 November 2010.

Education and training

The CSR includes proposals to:

  • Increase funding by £250 million a year by 2014/15 on new adult apprenticeships, relative to the previous government’s level of spending;
  • Remove the entitlement to free training for a first full level two qualification for those over 25;
  • Introduce fees for further education students aged 24 and over studying for a level three qualification; and
  • Abolish the Train to Gain programme, and the Regional Development Agencies, as previously announced.

Other announcements on education include a real terms increases of 0.1% a year to the schools budget for children aged 5-16 and acceptance of the proposals made by Lord Browne in his recent review of university funding.

Pensions 

The main announcement on pensions was that the government would speed up the pace of state pension age equalisation from April 2016, so that the state pension age for women reaches 65 in November 2018. The state pension age will then increase to 66 for both men and women from December 2018 to April 2020.

On public sector pensions, the Government says that it:

  • accepts the findings of John Hutton’s interim report on pensions;
  • will continue with a form of defined benefit provision; and
  • will seek “progressive changes to the level of employee contributions that will deliver £1.8 billion of savings by 2014/15. It will announce a consultation on the discount rate used to set contribution rates in public sector schemes.
  •  

    The full report also says that the DWP settlement will include funding for the introduction of auto-enrolment from 2012 and the establishment of the National Employment Savings Trust (NEST). It also sets out funding arrangements for compensating Equitable Life policyholders. 

    Public sector pay

    The CSR reiterates the government’s public sector pay freeze policy and argues that “the overall value of the public sector reward package, including pension provision, has remained generous in recent years” (NB see a recent ONS report on this point).

    It emphasises the fact that the public sector paybill accounts for around half of departmental resource spending, “so the Spending Review will inevitably have an impact on the public sector workforce”. 

    The full report says that Will Hutton’s review of fair pay in the public sector (external website) will be published in late November.

    The government says that it wants to encourage local public sector employers to “explore voluntary deals with staff on pay restraint or reduced hours in order to save jobs”.  

    Also…

    • Each government department will publish a business plan later this year setting out the details of “reform plans”. A list of each department’s budgets can be found on p11 of the full report and the BBC has a department-by-department briefing (external website).
    • Some of the 26% cuts that the DWP will need to make will come from the Health and Safety Executive and the “better targeting of spending on employment programmes”. 

    , , , ,

    Leave a comment: