Business leaders have called for an immediate freeze in the public sector pay bill under moves to control public finances.
The Confederation of British Industry said increases for frontline staff and the lowest paid would still be justifiable, but argued the total pay bill should not increase for the next two years.
The business group said pay freezes had been commonplace in private firms during the recession, leading to a 0.9% fall in average pay last year, but wages had grown by 2.8% in the public sector.
Setting out its priorities for the new government, the CBI said selected public sector pay and recruitment freezes could save £18 billion over the next two years.
The move should be coupled with measures to allow businesses to create jobs and drive economic growth, it was argued.
Ministers were also told that a further £8 billion could be saved by 2015-16 through increasing the involvement of private firms and the third sector in re-shaping service provision.
Other suggestions included opening up public services to greater competition, reducing sickness rates and allowing private firms to run non-core activities.
Read more at HSJ.
Tags: Pay
