PCS responds to Budget

Responding to today's Budget, PCS general secretary Fran Heathcote said: “The chancellor seems to have given with one hand while taking away with the other.

“By announcing a 2% ‘productivity, efficiency and savings target’ for all government departments, she appears to be wiping out the 1.7% real terms increase in departmental spending. This is concerning at a time when the vital public services our members work so hard to deliver are crying out for real investment.”

During her speech, the chancellor Rachel Reeves repeatedly insisted that there would be no return to austerity. However, in reality the real terms increase of 1.7% departmental spending will be wiped out by the 2% savings target for all government departments to find from efficiency savings.

It is difficult to see how this will result in the resources that are required for our members to deliver quality services that the public rely on. Particularly as many public services are already struggling from over a decade of under-investment.

National Living Wage increase

On the NLW increase, Fran Heathcote said: "While we welcome the rise in the National Living Wage, too many of our members – 20,000 in the DWP alone – will next year need a pay rise just to keep up with the rate.

“If the government is serious about making work pay, the NLW should be raised to at least £15 an hour and the government should fulfil its pre-election pledge to bring outsourced companies, many of whom pay just the NMW, back in-house immediately.”

The National Living Wage will increase to £12.21 in April 2025 for workers 21 and over, a rise of 6.7%. It will rise to £10 for workers aged between 18 and 20 – an increase of 16.3%.

After 14 years of pay restraint, many government departments have become minimum wage employers. This has left too many of our members requiring their pay to be increased as a result of the NLW increases. It is estimated that over 20,000 AA and AO staff in the DWP alone will have their pay caught up by the NLW for the third consecutive year in April 2025. This is as a result of the opportunity missed by DWP this year where they have failed to prioritise low paid workers.

The issue of endemic low pay still needs to be addressed in the civil service and related areas.

The policy of pay restraint has seen the civil service become a minimum wage employer in many areas. PCS commissioned research shows that pay has fallen an average of 1.5% per year since 2011.

If the government is serious about making work pay, it needs to address chronically low pay for its own workers. PCS members working for outsourced companies have been taking matters into their own hands by taking strike action to fair pay.

The facilities management workers cover vital roles as security officers, receptionists, cleaners, caterers and porters. While Labour’s manifesto promised the ‘biggest wave of insourcing in a generation’, these workers are yet to see pay and conditions equivalent to their colleagues on civil service contracts. Many of them were on picket lines in Whitehall on the day the chancellor delivered her Budget.

Support needed on social security, not more conditionality

The chancellor today reiterated the government's commitment to recruit new HMRC tax compliance officers to tackle tax avoidance and evasion. PCS has welcomed the announcement of additional staffing as the union has been calling for additional staff to close the almost £40billion tax gap of underpaid tax for many years. 

The chancellor also announced a further crackdown on benefit fraud by expanding DWP fraud and error staff by 3,000.

Low pay is hampering recruitment in DWP and the department never managed to get close to recruiting enough staff to cover the new work created by the previous government’s fiscal events.

As expected, the chancellor confirmed plans to tighten the Work Capability Assessment. PCS signed a letter from UK deaf and disabled people's organisations and others ahead of the Budget to urge government to stop further planned cuts to disability benefits.

The union is concerned that this government is doubling down on the Conservative government’s culture of conditionality rather than support for claimants. 

Disappointingly there was no announcement to scrap the two-child benefit cap or roll back on the Winter Fuel Payment cuts or any moves to compensate WASPI women.