Public service pay and jobs squeeze goes on
Another Spending Review, yet more bad news for public services and the people who work in them.
There were three key mentions of public service pay and jobs in today’s statement, although there will be more implications hidden in the small print.
Firstly, the Chancellor announced ‘further reductions in the number of people working in the public sector’ – a cut of 144,000 jobs. Looking at the small print of the OBR’s March 2013 report (p79), this appears to be a confirmation of the OBR projection made back at the time of the Budget. So, as they predicted, an average of 36,000 public service jobs a quarter (395 a day) will still be being cut in 2015-16 as a result of government policies, on track with their estimate of a total of 1 million job cuts from the beginning of 2011 to the start of 2018.
Secondly, he confirmed another Budget announcement, that there would be a further year’s 1 per cent cap on pay increases in the public sector, following the two or three year 1 per cent cap and two or three year freeze (depending on where you work). What this means in practice, of course, is living standards falling further and further as real terms pay cuts bite. TUC research published earlier this week showed the impact this had had on households, pushing 180,000 children with a parent in the public sector into poverty.
The third announcement was officially ‘new’ although it had been heavily trailed: the abolition of automatic pay progression. I blogged about the folly of this policy back in March when it was first mooted. Firstly, the government overstates the issue, ignoring the fact that many people are already at the top of their pay scale and so aren’t getting any annual pay uplift – IDS estimate that half of secondary school teachers and half of NHS staff are in this position. Secondly, pay progression is based on the principle that new, less experienced staff are paid less and as people increase their skills and experience over time they are rewarded through progression. This has an important part to play in attracting and retaining skilled staff to the public sector. It’s also an approach that is transparent and that great efforts have been made to equality-proof (such as with the Agenda for Change system in the NHS). Moving away from this kind of system will mean more potential for equal pay disputes over how ‘performance’ and decisions about any progression are made. My colleague Richard has a good post on the problems with performance related pay here.