Review targets childcare and pensions

The government has issued its Mid-Term Review, which takes stock of the progress made in implementing the Coalition agreement signed in May 2010.

The review, which was published on 7 January by prime minister David Cameron and deputy prime minister Nick Clegg, reiterated reforms put forward in the Coalition agreement and highlighted a new set of reforms, including support with childcare costs for working families.

The new reforms also include:

  • Legislation to promote shared parenting and flexible parental leave during the first months of a child’s life.
  • The continued roll out of auto-enrolment, ensuring that small businesses (with fewer than 50 employees) are not required to start enrolling employees until 2015.
  • Legislation to put public sector pensions on a fair and affordable footing.
  • A new mechanism to ensure that the state pension age reflects future changes in life expectancy so that the state pension system continues to be sustainable and affordable.
  • The introduction of a system of equal pay audits that will compel employers found to have unequal pay practices to amend their systems.
  • The implementation of the recommendation of the School Teachers’ Review Body that teachers’ pay progression should in the future be dependent on performance, not time served, and that schools should have greater autonomy to set teachers’ pay within a broad national framework.
  • The statutory minimum and maximum salary levels for classroom teachers’ pay will be increased by 1% in both 2013/14 and 2014/15.
  • The modernisation of police pay and conditions, and the implementation of greater flexibility in the working methods of police.
  • Promotion of the electrification of car fleets.

Further detail of some of the policies is expected to be announced shortly.

Cameron and Clegg said: “We are dealing with the deficit, rebuilding the economy, reforming welfare and education, and supporting hard working families through tough times.

“Today, at the half-way point in the Parliament, we are taking stock of the progress we have made in implementing the Coalition agreement that we signed in May 2010. But we are also initiating a new set of reforms, building on those already underway, to secure our country’s future and help people realise their ambitions.”

Glyn Bradley, associate at Mercer, added: “The mid-term review reiterated the government’s long-trailed £140-per-week flat-rate state pension, but we are still awaiting the detail, nearly two years on from the green paper.

“The single-tier pension is likely to be £155 by the time it happens, but it’s unlikely to make everyone better off at once. There is likely to be controversy as comparisons emerge between the flat rate and the higher pension earners might have accrued had the current system kept going unchanged for 40 years.

“Less well noticed, but of acute concern for the employers involved, is the fact that reforms are expected to take away the state subsidy for employers to continue offering high-quality defined benefit [pension] schemes.”