Talk at Westminster is moving to future spending plans. The need for more action to curb the deficit into the next Parliament is hitting Ministerial deasks. The Treasury is engaged in detailed negotiations with the main departments over how to reduce the rate of increase in cash spending beyond 2015.
The government imposed a pay freeze on public sector pay for a couple of years, yet public sector pay continues to rise faster than private sector pay. In the most recent quarter total pay including bonuses in the private sector has slowed to zero without an official freeze. Public sector pay rose by 1.4% with a freeze. The rate of reduction in staff numbers in the public sector has also slowed recently. The government needs to revisit the size and cost of its overhead, and to use natural wastage more extensively to cut out less needed posts, to raise productivity and cut costs. Numbers employed in the public admin and defence category fell from 1.71m in December 2010 to 1.579m in December 2012.
It should also revisit the question of hom many staff it employs in expensive central London offices. It could employ fewer in total, and employ more in outer boroughs where offices costs are half the central costs. It could let out the central space freed for good rentals and lease premia, or sell peripheral buildings outright.
The latest NAO Report does make good reading for the business case for HS2. I have favoured deferring this project. It might make sense to start it from the north, from Manchester and Leeds, rather than from London anyway,and defer the spend until the budget deficit is under better control. I assume the government will not wish to say the business case is poor and we cannot afford the project. Far smaller sums spent on upgrades and removing bottlenecks on the exisiting west coast line might be the better immediate rail investment.
It needs to step up its asset sale programme, starting with assets like Citizens Bank, still owned by RBS. It is time taxpayers got some cash back for their large unwise and forced investment in RBS shares.