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The public sector paybill accounts for around half of departmental resource spending, so deficit reduction will inevitably impact on the public sector workforce. Failing to tackle the deficit would be more detrimental for medium and long-term job prospects.
HM Treasury does not centrally manage changes to public sector workforces. It is for individual employers to decide what would be the most cost-effective workforce to enable them to deliver public services and live within their spending review settlements.