Spurs do indeed develop on the back of the heel bone, and often can be a source of pain.  Spurs form for a variety of reasons, but usually develop in response to traction or pulling of the heel bone by the Achilles tendon.  This is especially the case when there is a general tightening or lack of upward motion of the ankle, usually due to a tight Achilles tendon or calf muscle.  The pulling force stimulates the outer layer of bone to calcify, forming a bone spur in the process.  The Achilles tendon substance itself can also partially calcify where it attaches to the heel bone.  People with flat feet are at greater risk for spurs on the back of the heel because the pulling force is greater in a flat foot where the heel bone excessively rotates outward.  When viewed on an x-ray, the spur can look like a narrow spike of bone projecting outward and upward from the back of the heel bone.  In actuality, it is more like a ledge running the width of the back of the heel bone.  This bone has the potential to irritate the Achilles tendon, and sometimes can even fracture off partially from the heel bone, both resulting in pain.  The presence of the spur itself does not mean that pain will always develop, as many patients with spurs on the back of their heel do not necessarily develop pain.  However, the presence of a spur makes pain more possible, especially in situations of chronic stress to the Achilles tendon.