PUBLIC SECTOR PAY
1% pay cap for public sector workers from 2013
The chancellor of the exchequer has told public sector workers that following a two-year wage freeze they will receive pay rises capped at 1% from 2013 to 2015.
In his autumn statement George Osborne said: “For some workforces, the two-year pay freeze will be coming to an end next spring, for most during 2013. In the current circumstance the country cannot afford the 2% rise assumed by some government departments thereafter. So instead, we will set public sector pay awards at an average of 1% for each of the two years after the pay freeze ends.”
He added: “Many are helped by pay progression - the annual increases in salary grades that many people are entitled to, even when pay is frozen. It is one of the reasons why public sector pay has risen at twice the rate of private sector pay over the last four years. So while I accept that a 1% average rise is tough; it is also fair to those who work to pay the taxes that will fund it.”
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Move to localised pay rates?
The chancellor has also asked the pay review bodies for the NHS, school teachers, prison service and senior salaries to make recommendations on how pay can be “made more responsive” to local labour market conditions. It will apply to all pay review body workforces, with the exception of doctors, dentists, the armed forces and the judiciary.
Osborne said: “I can also announce that we are asking the independent pay review bodies to consider how public sector pay can be made more responsive to local labour markets – and we will ask them to report back by July next year. This is a significant step towards creating a more balanced economy in the regions of our country that does not squeeze out the private sector.”
In addition, the Minister for the Cabinet Office will review “how more local, market-facing pay could be introduced in civil service departments. Secretaries of State may then choose to take forward recommendations for their departments.”
Want to know more?
The chancellor of the exchequer delivered his 2011 autumn statement to Parliament at 12.30pm on 29 November 2011. To download all the autumn statement documents visit: www.hm-treasury.gov.uk/as2011_index.htm.