Public sector facing cuts to staff benefits and pay over next year

Public sector employers are preparing to cut staff numbers as well as reduce or freeze pay and benefits ahead of significant budget cuts expected in the Government’s Comprehensive Spending Review.

Of 150 public sector employers polled by law firm Eversheds, one in 10 plans to cut salaries, more than a quarter intend to freeze pay and 13% are prepared to remove bonuses and performance-related pay over the next year.

Perhaps more worryingly, four-fifths (81%) of respondents envisage making staff redundant in the next 12 months and 45% will consider a recruitment freeze over the coming year.

The “Service transformation and dealing with the deficit survey” also revealed that 11% of employers plan to reduce sick pay, while one-fifth will consider withdrawing staff benefits in a bid to bring down huge wage bills.

The responses, largely from local government and health organisations covering about 120,000 staff, also reveal that nearly half (47%) plan to implement more robust performance and absence management policies, while 43% predict an increase in shared services.

Mark Hammerton, partner at Eversheds, said: “HR professionals will clearly need to stay close to forthcoming proposals, ensuring, for example, that redundancy exercises or contractual changes are handled appropriately, if they are to avoid adding to the burgeoning number of tribunal complaints revealed in recent employment tribunal statistics.”

Dave Prentis, general secretary of Unison, warned that public sector workers, particularly those in local government, are under attack from all sides.

“The pay freeze is already hitting council workers and the low paid are really struggling to make ends meet for their families,” he said.

“Some councils have issued redundancy notices to thousands of their staff ahead of making changes to contracts. Unison will be scrutinising any and all proposed changes and we will be looking to ensure that councils take account of equalities legislation before making any worker redundant.”

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