Friday, 22 January 2010

The Public Sector Bonanza

If we needed more evidence that costs are spiralling out of control in the Public Sector and that it has not, in any way, shared in the need to cut costs to reduce the budget deficit, the article in yesterday's Daily Telegraph said it all.

A small, but prominent paragraph on the front page indicated there is now a record gap between Public and Private Sector pay which is over £2,000 on the average salaries in each sector.

I have beaten on about this but the Private Sector has borne the brunt of cost cutting and job losses in the last year while the Public Sector has remained fat and happy, negotiating unrealistic pay deals and sitting on overly generous pension schemes. The Government has postponed any cost reviews until after the election and our borrowing as nation rises daily - it's as if people who control these things either don't get it or, worse, don't care .

The Public Sector cost is a massive ticking bomb and the longer we leave tackling it, the worse it will get. Meanwhile, as National Debt goes onto the open market, credit agencies around the world will be questioning the British ability and appetite to deal with its growing public costs and repayments.

As we, the taxpayer, contemplate the price of all this, it is encouraging to know that right in front of our faces, our 80%+ publicly owned bank, RBS, is a principal lender to Kraft to acquire Cadbury - which no one seemed to know until after the deal was struck, while Mandelson now wants to see the detail as he wafts it through to conclusion. Further, those banks, who we bailed out are enjoying a wonderful resurgence as the wider economy still struggles - prompting new, higher pay deals and wonderful profits.

You couldn't make this up - the taxpayer gets the entire bill for economic failure to see banks whooping it up thanks to our generosity, while the Public Sector gets fatter because costs are not cut which could save the taxpayer some money.

Having just got my Corporation tax demand within minutes of posting my accounts and still waiting for my personal rebate since October, it seems that taxpayers have become the new 'Bank of England'.

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