The Autumn Statement paints a pretty bleak picture of the next few years for public sector workers, characterised by ongoing cuts and squeezed living standards.
After a two year pay freeze (and even longer in local government), the Chancellor announced today that pay increases in the public sector will be capped at an average 1% for the following two years. This comes at the same time as the proposed average 3.2% increase in pension contributions (phased in over 3 years), and inflation rates predicted to be around 3%. The TUC has calculated that this leaves public sector workers facing an average cut in their living standards of 16.5% by 2014-15.
There is also grim news on jobs, with the OBR estimating 710,000 public sector job losses by 2017 (see page 95). This figure is the total amount of public sector jobs the OBR predicts will go between the beginning of 2011 and the first quarter of 2017. It is a significant shift from the prediction set out in the last OBR report in March, which predicted 400,000 job losses between Q1 2011 and Q1 2016.
And the Chancellor’s promise to look at “how public sector pay can be made more responsive to local labour markets” will add to concerns that the government is moving to fragment national collective bargaining arrangements.
Localising and breaking up pay determination arrangements can lead to equal pay issues, entrench regional inequalities and lead to duplication of time and effort spent gathering data and bargaining in hundreds or even thousands of local bargaining units. There’s lots more on these issues here and here