CIPD warns public sector must cut pay or cut jobs

“Belligerent” public sector unions need to be told to choose between higher pay deals or fewer redundancies as the recession sets in across the sector, the CIPD has warned.

Following a bleak prediction last week that as many as 578,300 jobs could face the axe across back-office and frontline services by 2012, the Chartered Institute of Personnel and Development (CIPD) has urged HR to deliver a clear message to workers and unions that it’s either lower pay rises or more job cuts.

Last week, the HR body’s prediction that 350,000 public sector jobs would go by 2014 was smashed by the Public Sector People Managers’ Association (PPMA), which said the headcount could be reduced by 10% two years earlier. The cuts, based on planned efficiency savings and reduced budgets, could result in 290,400 job losses in local government and a further 287,900 across the public sector.

John Philpott, chief economist at the CIPD, told Personnel Today: “If public sector workers persist in saying ‘we want bigger pay’, the consequence will be that there are fewer jobs. It’s a choice workers have to make. HR has to put that message across clearly.”

He added that the large-scale job cuts would intensify industrial unrest and could lead to strikes. “Public sector unions are more belligerent than private sector unions. In the private sector, employers have been better able to make reductions to pay without interaction from unions.”

Local government employers are still negotiating this year’s pay talks with unions, who rejected point blank the initial 0.5% offer.

However, Gillian Hibberd, president of the PPMA, warned public sector pay rises were unlikely to rise above 1% until at least 2011.

“Public sector income will be cut, and as most spending goes on people, we have to show pay restraint because of the current climate. There should be a 0% pay deal this year; there’s a lot of public debt that has to be repaid. We’re looking at a deal for the next two years being below 1%.”

But Heather Wakefield, national secretary for local government at Unison, the biggest public sector union, said a poor pay deal or freeze on pay would exasperate retention and recruitment problems.

“Workers are realistic but they are some of the lowest paid. A pay freeze in a context where there isn’t a pay freeze across the whole economy will make it difficult to improve services.”

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