As pay cuts cannot be imposed by the employer, this is nothing more than ignorant grandstanding.
It may be possible to insist that new incoming post-holders will start on the 5% lower salary, but the time that this will take for any meaningful savings to be generated is immense; but the LibDems have already planned to spend the non-existent windfall on the lowest paid.
Of course, the SNP might just be leading the LibDems into a political trap to get the Budget through, but if they are, then we are simply going to see public sector wages increase overall, rather than being rebalanced, and will actually make the economic situation worse.
What is required is a complete review of the very fat packages awarded to some of the top public sector employees - big salary, guaranteed and generous pensions, and being virtually unsackable - whilst consultants are hired left, right and centre to advise the appointee how to do their job, and what decisions to take.
"Bonfire of the quangos" anyone?