Social care workers in the public sector will see pay and pension increases capped at 1%, the chancellor announced today.
In his Pre-Budget Report chancellor Alistair Darling said public sector pay and pensions settlements will be limited to 1% from 2011 to 2013. Senior civil servants pay will also be cut to deliver a further £100m in savings.
Meanwhile, national insurance contributions by employers and employees are set to rise by 0.5% for those earning £20,000.
Darling said that the public sector is to face cuts of 0.8% each year from 2011-12 as a means of reducing the country’s debt. Some programmes will be abolished altogether.
The NHS will be protected from cuts from 2011 to 2013 with rises in line with inflation. However, it will be expected to deliver savings of £10bn per year by 2013 in part by delivering more efficient and integrated community and mental health services.
The chancellor said he planned to deliver savings worth £5bn by 2012-13 from programmes including changes to pensions, cutting IT projects and cutting the cost of residential care by keeping people in their own homes.
The report said that the chancellor expects to save £250m on residential care through preventative measures designed to keep people in their own homes.
A further £350m is expected to be saved by the Department for Children, Schools and Families by cuts to central budgets, quangos and a review of pilot programmes to concerntrate work on the most effective interventions. Precise details on these savings are not yet available.
Cash spending on Sure Start children’s centres will be maintained in line with inflation.
The chancellor also announced measures to get the government’s target for ending child poverty back on track.
Free school meals will be extended to 500,000 more children with parents on low-incomes, which will lift a further 50,000 children out of poverty, the chancellor claimed.
A spokeswoman for the Child Poverty Action Group said they welcomed extending free school meals. “Pilots, including those in Hull, have shown it is an effective way of lifting children out of poverty,” she said.
But it would not be enough to halve child poverty by next year, as the government had promised, she added.
There was also concern that the increase in benefits was only 1.5% given inflation was estimated to hit 3% during next year, she said. “We’d like to see measures that ensure being in work pays for low income families. 60% of the children in poverty are in working families. We are also calling for more money to be put into the tax credit and benefits system.”
Claiming the only way to promote growth was to invest in the skills of young people, Darling said everybody under the age of 24 and out of work for more than six months would be guaranteed work or training.
He also announced that disabled people will see their disability benefit rise by 1.5% next April.
Child tax credits will also be extended to 400,000 families whose income has dropped. Darling said these tax credits had, on average, meant families were £37 per week better off.