Wednesday, 16 June 2010
The cuts are on their way
In the last few weeks it has become clear that big cuts are coming our way. The new coalition Government in Westminster has laid out its plans to reduce the spending deficit by £6.2 billion this year alone. By their own admission, this is just the tip of the iceberg. Public sector pensions, which have historically balanced out the lower wages of workers when compared to their counterparts in the private sector, are now in the firing line.
Following Chancellor George Gideon Osbourne’s initial announcement of cuts, it has been calculated that £162.5m will be slashed from the Welsh budget. We have ‘generously’ been given the option of deferring the cuts from this year only to store up double budgetary pain next year. Some choice.
There is no doubt that in Wales, where a high proportion of workers are employed in the public sector, these austerity measures are going to bite hard. Plaid Cymru has maintained that it is wrong to force those on the lowest incomes and those who depend on public services to pay the price for the deficit, which has largely been caused by the tax-payer funded bail-out of the banks. What is more, it does not make economic sense in the long run.
We have recently heard how the cuts will be affecting Companies’ House which employs hundreds of people at locations in Cardiff and Nantgarw in Rhondda Cynon Taf. This UK Government department has been told that it must find savings of 11% in this financial year. We all hope that the workers there can avoid compulsory redundancies. The proposed pay freeze, which will hopefully stave off enforced job losses, will nevertheless hurt hundreds of employees living in South Wales. The closure of the site in Nantgarw, where 250 people are currently based, will also be a bitter blow for the local economy of the valleys. Surrounding businesses will no doubt be hit hard by the loss of the spending power of so many staff.
The Con/Dem Coalition has set its course and seems to have made up its mind to target us all. Public bodies and institutions should be looking to achieve savings in the upper echelons of their organisations, involving their workforce in the process of identifying where savings can be made. I'm sure the lower paid workers in Rhondda Cynon Taf would have a view as to whether the Jaguar car used to transport the mayor to Stansted airport or to Brighton for an awards ceremony and fish supper was money well spent.
Universities are also going to feel the squeeze. Will we see admin workers made redundant or courses scrapped while the bill for consultancy fees and Vice Chancellors pay keeps rising? Investigations by my office revealed that Cardiff University’s bill for consultants topped £3m in just three years. This was on top of a £1.5m bill for agency workers at a university where the Vice Chancellor collects £275,000 per annum.
The next few years are going to be painful enough without frittering money away on extortionate salaries, consultants and expensive cars.