490,000 public sector jobs to go in Osborne's spending review

490,000 public sector jobs will be lost by 2014-15 as part of the government's spending cuts, chancellor George Osborne will announce in Wednesday's long-awaited Comprehensive Spending Review.

The Guardian newspaper reports that news of the cuts came from Treasury chief secretary Danny Alexander "accidentally" revealing pages from the spending review report to photographers as he left the Treasury building on Tuesday, leafing through it. The Guardian adds that the sneak preview of the report reveals that the Office for Budget Responsibility will produce a new forecast for public sector job cuts on 25 November, but that the OBR does not expect this latest forecast to change.

The Guardian story adds that the report "proposes that public sector employers should try to strike deals to cut hours to reduce the level of redundancies." It adds that the spending report says the wage bill at Whitehall currently accounts for around half of all departmental spending and that public sector pay package has been generous, with pay packages four times as high as those in the private sector.

The report adds that "government will do everything they can to mitigate the impact of redundancies," apparently by creating conditions for private sector growth, encouraging pay restraint and reduced hours and supporting employees facing redundancy so they can find work in the private sector.

Financial Director will report on the spending review after it concludes, so check financialdirector.co.uk/news  for the FD angle

Click here to read The Guardian's full story