New official statistics have laid bare a stark and growing divide in the UK labour market, with the public sector experiencing a significant boost in both jobs and wages while the private economy falters.
A Tale of Two Economies: Surging Public Sector vs. Struggling Private Firms
The Office for National Statistics (ONS) reported that public sector employment increased by 7,000 in the three months leading to September 2025. This growth brought total public sector employment to 6.2 million, a record high for central government at 4.1 million. Local government employment stood at just under 2 million.
Within this, the core civil service expanded by 3,000 over the quarter, reaching a headcount of 554,000. In total, more than 60,000 public sector roles have been created in the past year.
This expansion stands in sharp contrast to the private sector, where the number of payrolled employees has declined every month since Chancellor Rachel Reeves' Budget. The figures highlight a two-speed economy, with the state growing as businesses contract.
Pay Growth Gulf Reaches Widest Point Since 2023
The divergence is even more pronounced in wage packets. In the three months to October 2025, public sector pay growth soared by 7.6 per cent, dramatically outpacing the under 4 per cent increase awarded to workers in private companies.
This represents the largest gap in pay growth between the two sectors since the middle of 2023. The data indicates that employees in government departments and associated public bodies are seeing their incomes rise at nearly double the rate of their private-sector counterparts.
Political Frustration and Pledges for Reform
The burgeoning size of the public sector appears to clash with Prime Minister Keir Starmer's own stated frustrations about policy delivery. Speaking in a parliamentary session on Monday 15 December, Starmer expressed irritation at the slow pace of government, blaming layers of procedure and consultation built up by successive administrations.
"My experience now as Prime Minister is frustration that every time I go to pull a lever there are a whole bunch of regulations, consultations and arms length bodies," he said.
The figures have provided ammunition for opposition parties. Reform UK and the Conservatives have both pledged to dramatically reduce public sector staffing levels. At a press conference on Monday, Reform MP Danny Kruger vowed to halve the number of communications and policy staff in Whitehall, while also proposing a larger bonus pool to reward high talent.
Alex Burghart, the Conservative Party's shadow chancellor of the Duchy of Lancaster, accused Labour of abandoning previous plans to reduce headcount. "As a result of [Labour]'s anti-growth policies... the state continues to balloon while businesses are left to fend for themselves," he stated.
The latest ONS data paints a challenging picture for the UK's economic landscape, setting the stage for intense political debate over the size, cost, and efficiency of the state in the year ahead.
