Osborne gets it wrong on public sector pay… again
A new report published today by the UK’s foremost labour market specialists calls into question a number of recent claims made by the Chancellor on public sector pay.
The research, from Incomes Data Services, challenges George Osborne’s statement that pay progression (annual salary scale increases) in the public sector differ markedly from the private sector. The report follows recent news that the Chancellor’s oft cited “Public Sector Pay premium” is in fact, a myth.
At the time of his Spending Review announcement in June Osborne made great play of “antiquated” pay progression in the public sector made regardless of performance. This is what he said:
…the biggest reform we make on pay is to automatic progression pay. This is the practice whereby many employees not only get a pay rise every year, but also automatically move up a pay grade every single year – regardless of performance.”
“Some public sector employees see annual pay rises of seven per cent. Progression pay can at best be described as antiquated; at worst, it’s deeply unfair to other parts of the public sector who don’t get it and to the private sector who have to pay for it.
Unsurprisingly, his announcement received significant and largely uncritical press coverage.
But now Income Data Services (IDS) have looked in detail at how pay progression works in both public and private sectors. They have found that “length of service” is used as part of pay awards across the economy. For example they state that large private sector companies operate pay progression systems which are “similar to how pay operates in the public sector.”
Pay systems vary, sometimes including a performance element, sometimes not. But it is simply untrue to claim, as George Osborne did, that length of service pay progression is ‘antiquated”. You can read the full report here.
IDS also found that the private sector is moving in the opposite direction to the government on pay progression, shifting away from systems based solely on performance to those which combine performance with other criteria
The report provides further evidence that Osborne’s campaign against pay progression is a politically motivated stunt, which has little to do with saving taxpayers money. IDS find that: “Arguably the cost of progression is neutral over the longer-term as higher-paid employees leave the organisation and new starters arrive at the bottom of the pay range”
IDS also state that many public sector workers don’t even get a progression award. For example, in local government two thirds of staff are not eligible for pay progression.
This latest farce will leave many people asking why the government refuses to recognise the huge contribution that public sector workers make, day in day out. Their jobs, their pay and their conditions have been punitively targeted by the Coalition, often on the most spurious of pretexts. Instead of playing political games by telling half-truths about the pay of public sector workers, George Osborne should be focussed on supporting a hard pressed population who are struggling to make ends meet, irrespective of which sector they work in.