Public-sector pay has not kept pace with private-sector wages, let alone consumer prices
Save time by listening to our audio articles as you multitaskMore strikes are being called by the day. On January 16th teachers in England and Wales voted for seven days of walkouts. Some 100,000 civil servants in 124 government departments will strike on February 1st. The government sounds by turns emollient and aggressive: a bill that would force certain unions to maintain a minimum level of service during industrial action is now going through Parliament.
Grievances over pay lie at the heart of the disputes. Private-sector pay increased by 7.2% in the year to November, thesaid on January 17th, compared with a rise of 3.3% in the public sector, and a rise in consumer prices of 10.7%. But underpinning these grievances is a loss of faith in the pay review bodies that advise the government on what to pay public-sector employees. The trade unions say thes lack clout and independence.
Yet it is also true that ministers have the upper hand in the process. Each year secretaries of state issue remit letters, stressing the factors that ashould consider, including what funding it considers available. Since the 1990s governments “have put consistent pressure” on them to rein in pay, says Mr Smith. “There is a culture of not rocking the boat too much.
Perhaps the biggest issue is one of timing. When the Treasury gave its evidence to last year’s pay round in December 2021, inflation was forecast to peak at 4-5%. By the time thepay body recommended a rise of 4.8% in July 2022, an increase accepted by the government, inflation had breached 10%. The structure of public-sector budgets make things worse: although pay reviews are conducted annually, the departmental budgets from which salaries are drawn are fixed for three years.
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