Public service crisis

A SECRET report on the likely cost of achieving the Government's goal of providing 'world-class public services' is being drawn up in Whitehall.

The audit exposes a looming crisis in the public sector that will take billions of pounds to solve - money likely to come from tax increases.

Already, rising pay for Government employees is gobbling up a larger than planned share of the extra money being spent on public services. This report raises the spectre of even larger staffing costs during the next few years.

To prevent the pay bill spiralling out of control, the Government is thought likely to recommend smaller pay rises for public servants living and working in regions such as the north of England, where living costs are lower.

Such a move would be hugely controversial among public sector trade unions.