CALLS FOR PUBLIC SECTOR PAY FREEZE

Audit Commission chief executive Steve Bundred said he believed workers, including those in the NHS and education, would "tolerate" a freeze as they had "done well" over the last 10 years.

And in an outspoken tirade, he accused Labour and the Tories of hiding the true scale of required cuts and dismissed politicians' promises to protect health and education spending.

Writing in The Observer, Mr Bundred said: "At a time when inflation is likely to be between 2% and 3%, a pain-free way of cutting public spending would be to freeze public sector pay or at least impose severe pay restraint.

"This is especially true if real wages in the private sector are still falling."

Such a move could provide £5 billion of the £50 billion or more he said would have to be found through tax rises or spending cuts - which he said would have to be higher than the 10% presently being suggested.

Health and education workers could not be exempt from the austerity measures, he suggested, to be fair to others, because of the size of the NHS workforce "and also because ministers will correctly assume that as public sector workers have done well over the past decade they will tolerate some modest real reduction in earnings".

Amid bitter political wrangling over future spending, he warned: "Let's dismiss the notion that spending on health and education will be protected. There are good reasons why they won't, and shouldn't.

"In both there are efficiency savings available that will not affect service quality and not just in back offices," he said - pointing to Commission findings that much recent investment had been wasted.

"Don't believe the shroud wavers who tell you grannies will die and children will starve if spending is cut. They won't. Cuts are inevitable and perfectly manageable," he said.