Two-year pay freeze

[Aidan Crossey]

Just a quick question.

Yesterday's budget announced a two-year pay freeze in the public sector. Are you anticipating a zero percent cost of living increase in 2011/2012 and 2012/2013, or are you anticipating placing a hold on service-related increments (or their equivalent) in these years as well?

I've been asked to do some quick modelling for a client on this and have decided to model both scenarios, but interested in how others think this will play.

Thanks in advance for your input.

Aidan

[Adam Nuckley]

Hi Aidan,

I would anticipate this being a freeze on 'cost-of-living' increases, defined for me as rises applied across all employees regardless of other factors.

Freezing service related increments and other experience related pay progression, such as promotions, would be false economy. It would stifle the natural career development of employees and leave many with no choice but to look elsewhere to find pay level with their experience.

That said, what this government intends is really down to how desperate they feel the budget situation is, and they might genuinely mean all pay is frozen over £21,000.

However, realistically, I would not expect it to be that strict.

Hope this helps,
Adam Nuckley

[Paul Thompson]

Lots more discussion on this topic in e-reward's LinkedIn group:
http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=2340985&discussionID=23113291&goback=.ana_2340985_1277465104097_3_1.anh_2340985