Why the public sector should get better pensions than the private sector?

Okay so I misled you with the title, they absolutely shouldn’t… especially when the private sector is footing the bill in the first place…

I wrote this post a few weeks back on the escalating costs of the NHS and in light of the recent threat of industrial action of teachers and public sector workers I thought I’d share my findings again on how much it costs to run the public sector:

In 2010 the Public sector employed 6.2 million people and the total wage bill was £182 billion. This is an increase of £8 billion (5%) from the 2008 wage bill of £174 billion.

Salaries represent around 30% of the total running cost of the public sector which puts public sector spending around £600 billion, up £26 billion from the 2008 cost of £574 billion.

During the deepest point of the recession in 2009, whilst around 700,000 jobs were lost from the Private Sector, around 100,000 jobs were added to the public sector. What’s more during the same period the average public sector salary of £23,660 overtook the average private sector salary of £21,528. So how much does it cost each private sector taxpayer to fund the Public Sector?

  • As a proportion of the total UK population of 62 million, £600 billion equates to £9687 per person
  • As a proportion of the total UK working population of 38 million, £92 billion equates to £15,805 per person
  • As a proportion of the total UK private sector working population of 31.8 million £92 billion equates to £18,886 per person

What does all of this mean?

Basically it means the UK economy, which is fuelled by the private sector, simply can’t afford to fund the public sector. The UK government is borrowing (increasing the budget deficit by) something like £140 billion each year to balance the books…. and I havent taken pensions into account which is the current bone of contention.

Where’s this all going to end and how can we keep paying for services that we simply can’t afford?

I’d urge those arguing against public sector reform to go and check out the economics. There is no magical pot of cash and the government can only raise more money from the taxpayer… and this particular taxpayer isn’t convinced he’s getting anything like value for money from the public sector today.

Just saying… again!!

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