This report analyses the level of growth in the public sector workforce and levels of public sector pay.

Some of the most important political battles that continue to be fought between the main political parties concern the quality of public spending.

Labour has argued that a combination of fiscal discipline, sound macro-economic management and effective labour market policies has 'cut the costs of failure', leaving more resources available to meet public service priorities.

The Conservative response is partly to claim credit for a sound basis for the public finances, and partly to claim that the new spending on public services is being wasted on recruiting 'bureaucrats' and funding excessive public sector pay awards.

This report aims to get to the bottom of this debate.