Public sector employers should pay London weighting of up to one-third more if they are to effectively recruit and retain staff, an independent panel has claimed.
The London Weighting panel has recommended that additional money paid to compensate public workers for the extra cost of living in the capital should be comparable to the private sector.
Public sector staff in inner London should be paid up to 37 per cent more than those outside, or 33 per cent more if the effect of the City is excluded.
The recommendations also say that employees in outer London should receive between 11 and 15 per cent more pay, figures that are broadly in line with existing levels of London Weighting.
The panel, set up by the London Assembly, claimed that private and public workers should get comparable levels of London Weighting because everyone faces the same extra costs.
Bill Knight, chairman of the panel, said employees and staff should work together to agree definitions of inner and outer London.
He said the rises would mean substantial cost increases and urged employers and unions to join forces to press for more investment from the Government.