Public sector workers could face variable pay rises

Public sector workers could have wage increases based on their performance or where in the country they work, the chancellor has hinted.

Philip Hammond told the Daily Telegraph that he would like greater “flexibility” over public sector pay awards and an end to blanket deals. The 1% cap on public sector pay came to an end earlier this year.

His comments follow a recommendation last week from Liz Truss, chief secretary to the Treasury, that future public sector pay rises should focus on retention, performance and productivity.

Truss claimed that public sector pay outside London and the South East was far more competitive with the private sector, and that those in other regions should receive lower pay rises.

She also criticised the role of independent pay review bodies – which have an influential role in setting pay for public sector workers – claiming they should only make recommendations in an advisory capacity, as many ministers use their findings to justify demands for more money.

Since the pay cap was lifted, teachers have benefited from a 3.5% pay rise, military personnel’s pay has risen by 2.9% and police 2%.

Today police chiefs from three major forces warned that cuts to funding would mean they had to make significant cuts to staff, claiming that 83% of their budget is focused on people.

Ian Hopkins, chief constable of Greater Manchester, told the Guardian he had hoped to have 6,300 officers by March 2021; instead he is likely to have 5,709 – fewer than the force’s total in 1975.

The GMB union said that bringing in variable public sector pay awards would create a “postcode lottery”.

Rehana Azam, national secretary, said: “People should be paid for the job they do and skills and experience they have – not where they live.

“It isn’t fair or practical and will weaken public services and lead to a talent drain from poorer areas. Performance-related pay just does not work in the public sector. How do you judge it? A paramedic who saves most lives? It doesn’t make sense.”

GMB pointed to an attempt in 2012 by the government to bring in variable pay rises – the NHS pay review body examined the evidence and rejected it, claiming there was not sufficient argument to justify investing in “additional market-facing pay at this time”.

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Azam added: “The prime minister still hasn’t got a grip on why we have such a huge recruitment and retention problem in our public services.

“It’s because public sector works have faced a real-terms pay cut for nearly a decade. Pay rates have already fallen behind those in the private sector. These new plans won’t help.”