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IFS warns over public sector

The Institute for Fiscal Studies has warned that government borrowing will rise, public sector spending cuts will increase. The OECD has also said the UK must do more to boost growth and tackle inequality, which it says are key to economic recovery.

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Public sector employment 'to fall by 1.2 million by 2018'

The IFS has predicted that public sector employment will fall by 1.2 million by 2017-2018, should the current spending cuts continue. This figure is higher than previously predicted:

Departments are planning to cut pay bills quicker than other forms of spending and so far they are doing it through reducing employment much more than through real pay cuts.

This means that public sector jobs look likely to be cut faster than implied by Office for Budget Responsibility forecasts. If departments continue to cut their pay bills beyond 2014-15 at the rate they are currently planning then public sector employment would fall by 1.2 million by 2017-8, rather than by 900,000 as the OBR forecasts.

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