Public sector pensions

The Office of Budget Responsibility faces a big credibility test today. Chris Giles, the FT’s economics editor, has an agenda-setting story that raises doubts over its very purpose and independence. It is far more significant than any speculation over Sir Alan Budd’s departure.

Through persistent questioning, Chris uncovered that the OBR tweaked its Budget forecasts at the last-minute to erase around 175,000 public sector job losses by 2014/15. Read more

Welcome to a new, occasional series running up to the Autumn spending review. We’re planning for the “Cut Of The Day” to be as arbitrary, brutish and irregular as the whims of the Treasury axemen. So you may see a few examples on a single day, or none at all.

The basic premise is to lay out the case for and against various measures. We’ll try to pull together some greatest hits before the Spending review. So please do let us know if you think the options are too damaging, cruel or indeed unnecessarily merciful. Read more

Look beyond the make-up on the public sector reform commission. John Hutton’s decision to chair it is a serious political coup for George Osborne. But the real shake-down is hidden in the small print.

Osborne said Hutton’s interim report in September will look at the “the early steps we can take to save costs”. The full remit goes a bit furtherRead more

There seems to be a growing appetite to cut the cost of public sector pensions. A year ago, it was basically off the cards — no party would have dared take the political risk. But the coalition are now slowly making the case. There is a strong chance of a levy being imposed, if the government holds its nerve.

The stats in the OBR report today, which for the first time breaks out the annual cost of public sector pensions until 2015, are genuinely concerning. Read more