Public sector pay packets now smaller than private sector, Treasury FOI response reveals

Written by Tamsin Rutter on 23 October 2017 in News
News

GMB union accuses Treasury of “cover up” after data was not released until threat to refer department to Information Commissioner’s Office 

The chancellor is expected to make an announcement on the pay cap in the Budget following fierce campaigning by trade unions. Credit: GMB

Public sector pay has fallen below pay in the private sector for the first time in over a decade, according to Treasury figures released under the Freedom of Information Act.

Treasury estimates on the pay differential obtained by GMB trade union show that after seven years of wage restraint the hourly wages of public sector workers were 0.6% less in 2016 than those of people working in similar jobs in the private sector.

By comparison, public sector staff earned 0.9% more than their private sector counterparts in 2015, and 3.1% more in 2005, and was as high of 5.8% more in 2010, the Treasury data reveals.

GMB has accused the Treasury of attempting to “cover up” the analysis, which the union said had been conducted and published “routinely” in previous years, but only released this year when GMB officially complained and threatened to refer the department to the Information Commissioner’s Office.


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GMB said its freedom of information request was initially ignored, and that Liz Truss, chief secretary to the Treasury, refused to release the exact figures when challenged in parliament.

But HM Treasury denied that there had been a delay in releasing the information, and told Civil Service World that it had been released within the timing guidelines set out in the FOI code.

Responding to a parliamentary question earlier this month, Truss said the analysis showed “a public sector pay premium of about 10%” when including employer pension contributions, and that excluding pensions, public and private sector pay was “now around the same level”.

The now-released data shows that hourly wages including employer pensions contributions were 9.1% higher in the public than the private sector in 2016. Excluding pensions, wages were 0.6% lower in the public sector.

But GMB claims that public sector workers pay significantly more in employee contributions, with almost 60% of them paying at least 6% of their earnings, compared with just 14% of those in the private sector.

Rehana Azam, GMB national secretary for public services, said that all public sector workers had lost thousands due to a planned decade of real-terms pay cuts.

“This is nothing short of an attempted cover up, but it’s no wonder that ministers fought tooth and nail to cover up these damning figures.

“The Tories can never again claim that public sector workers are ‘overpaid’ when the Treasury’s own assessment proves otherwise.”

She called for the chancellor Philip Hammond to announce in the Budget a “fully funded above-inflation” pay rise for public sector workers.

The Treasury has now told pay review bodies, including the Senior Salaries Review Board that covers senior civil servants, that they may recommend a pay rise of above 1% for the first time in seven years.

But the first confirmed pay rises of above 1% were set at 1.7% for prison officers and 2% for police officers, below UK inflation of 3%. These pay rises are to be funded from within existing budgets.
Hammond is expected to make an announcement on the pay cap in the Budget next month, following months of fierce campaigning from trade unions.

Public sector pay was frozen for two years in 2010, and has been subject to a 1% cap since 2012.

A Treasury spokesperson said: “Salaries in the public sector are now broadly comparable to those in the private sector after running ahead of the private sector for many years.

“Many public sector workers benefit from generous pension entitlements, giving around a 10% premium in many cases. We have confirmed the across-the-board 1% public sector pay policy has been lifted and the independent pay review bodies will report their recommendations in Spring 2018.”

About the author

Tamsin Rutter is senior reporter for Civil Service World and tweets as @TamsinRutter

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