Nicola Sturgeon has announced that the Scottish Government will end the 1% limit on annual pay increases for civil service and other public sector staff, saying the current restriction was “increasingly unsustainable”.
Launching the SNP’s manifesto for the forthcoming Westminster elections, the Scottish first minister said the 1% pay cap was designed to protect jobs at a time of funding cuts from the Treasury.
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The Holyrood administration’s public sector pay policy has set a 1% maximum increase for those earning over £22,000 since 2012.
Sturgeon highlighted that allowing higher increases for those earning less than £22,000 had helped soften the impact of restraint on the lowest paid compared to the Treasury’s guidance for Whitehall departments and public bodies, but the framework would now be reviewed.
“Of course, pay rises must be affordable – but they must also reflect the real life circumstances people face and enable us to attract and retain staff in our public services,” she said.
“So for next year and in future years, we will not assume a 1% cap.”
The Scottish Government will instead set a remit for discussions with public sector trade unions to ensure that proper consideration is given to the impact of inflation. It will also submit evidence to the UK-wide public sector pay review bodies, including the Senior Salaries Review Body for top civil servants, urging them to end the current limits while striking "the right balance between affordability and the cost of living”.
The end of the cap in Scotland comes after a leading pay policy expert has predicted the “beginning of the end” for the government’s policy to limit civil service wage increases to 1% a year.
Ken Mulkearn, a director at Incomes Data Research who has analysed public sector pay trends for more than 20 years, told the FDA union’s annual delegate conference earlier this month that change was likely due to both the pressures the pay constraints have placed on public services and the likely increase in the inflation rate.
Elsewhere in the SNP’s manifesto, the party called on the next Westminster government to end public spending austerity.
It set out a plan for public spending to target reducing the deficit from the current level of around 2.6% of gross domestic product to around 2.3%, which would return annual borrowing to the long-term average before the financial crisis. This approach – compared to the current government's plans to get the public finances into surplus as soon as possible in the next parliament – would free £118bn extra for public services over the next five years, according to the party.
However, the manifesto added that SNP MPs at Westminster would seek to meet the current target to see public sector net debt falling as a percentage of GDP from 2019/20.