Public sector union Unison has welcomed the chancellor’s decision
to increase borrowing rather than renege on public service
Delivering his annual pre-budget report to the House of Commons
last week, Gordon Brown confirmed he would increase spending on
public services by 3.3 per cent a year in real terms in 2004-5 and
More than three-quarters of the extra money will be allocated to
the key priorities of health, education, transport, social
services, housing and criminal justice.
Unison general secretary Dave Prentis said: “Public service
managers will breathe a sigh of relief at the commitment to
maintain spending on public services.”
Children’s charities also welcomed the report. As well as the
promised working tax credit and child tax credits Brown announced
the publication this month of the government’s strategy to help
parents balance their work and family lives.
From April, the principle of the working families’ tax credit will
be extended to single adults who earn less than £10,500 a year
and couples aged 25 and over without children who earn less than
£14,000 a year.
The new child tax credit, taken with child benefit, will be worth
£2,800 a year for low-income families with one child, and
£4,800 for a two-child family.
Brown also announced plans to begin consulting on the
implementation of child trust funds – also known as baby bonds – to
encourage lower income families to save for their children’s
He promised to consider new tax and national insurance incentives
to expand employer-supported child care and the new child care
credit to home child carers who are not already child
In the next three years, £90m will be added to the
discretionary part of the social fund for people on low incomes.
But plans for pension credits to reward modest savings have been
criticised. From next October a pensioner couple with an income of
£150 a week will receive £1,100 more a year, while single
pensioners with £110 a week will receive an extra £600.
Charity Help the Aged is concerned that these credits will force
millions of older people into means-testing to support their
Also in the pre-budget report was a new programme of intensive
support in neighbourhoods suffering from high unemployment and a
new target to increase the participation of young people in
full-time education and training.
Brown said national pay scales for public sector workers had been
too inflexible and that local authorities should be able to vary
pay according to local pressures.