Government scraps public sector pay cap - but pay rise is not enough to appease unions

Catherine Neilan
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2015 General Election - Crime And Policing
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Update: The Prison Officers Association has rejected the pay rise promised by the government this morning as it began dismantling the seven year public sector pay cap.

Speaking at the TUC conference in Brighton today, Steve Gillan said the offer amounted to a pay cut and would be rejected. Instead the union would look to co-ordinate action.

Prison officers were being offered an average pay rise of 1.7 per cent for 2017/2018, while police officers are to receive what is effectively a bonus one per cent award on top of their one per cent pay rise, granting them a two per cent boost to pay for the current financial year.

The Prime Minister's spokesman said the government would continue to deploy a "balanced approach to public spending" but recognised the need to address "recruitment and retention" issues in certain parts of the public sector.

The decision was taken during this morning's cabinet meeting, where ministers agreed there was a need for greater "flexibility" in future. "The key word is flexibility," the spokesman said.

The extent of potential rises in 2018-19 would be “agreed as part of the budget process and set out in due course”, balancing the needs of public sector workers “while also being affordable within the public finances and fair to taxpayers as a whole”.

He was unable to comment on how much the move will cost the public purse, although said both increases would be funded from existing departmental budgets.

He added that no inference of hierarchy should be taken from the fact prison and police officers are receiving a pay rise ahead of other public sector workers, stressing it was simply a matter of when the pay review recommendations had been delivered.

Both rises fall short of what has been called for by representative organisations: the Prison Officers' Association has urged a five per cent pay rise, while the Police Federation wants an increase of 2.8 per cent.

Neither rise is in line with today's inflation figures, with prices in August rising a higher-than-expected 2.9 per cent.

The move comes amid growing pressure on the government to give public sector workers a pay boost after seven years of austerity. Unite the union boss Len McCluskey said this morning he was minded to hold illegal strike action over the matter.

The PM's spokesman dismissed suggestions that today's rise was in reaction to union pressure, however.

TUC general secretary Frances O’Grady slammed the offer as "pathetic".

“Public sector workers have suffered seven long years of real pay cuts, and are thousands of pounds worse off. Today’s announcement means bills will continue to rise faster than their wages," she said. "If ministers think a derisory rise like this will deal with the staffing crisis in our public services, they are sorely mistaken.”

Mark Serwotka, general secretary of the Public and Commercial Services Union, said more simply: "It's a pile of crap and it's not good enough."

Unison's general secretary Dave Prentis agreed. "It's a tiny step in the right direction but not nearly enough. For seven long years the government's harsh pay cap has been hurting public sector workers, their families and the services they provide.

"There must be no selective lifting of the cap," he added. "No one part of the public sector is any more deserving than the rest. With inflation on the rise, the cap must go for everyone and it must go now."

The Taypayers' Association was also critical. Chief executive John O’Connell seized on the word "flexibility" noting:

"The government should scrap nationalised pay bargaining and give departments and institutions more flexibility to set their own wages. As long as public sector pay rates are set nationally, public sector workers will be relatively underpaid in some areas and relatively overpaid in others. That means many teachers and nurses are struggling to make ends meet, so the government must urgently decentralise pay bargaining to better reflect local conditions and save taxpayers' money. What's more, it will put an end to the swings between largesse in the good times and restraint in the bad."

O'Connell said it was "important to remember that workers in the private sector are struggling as well".

He explained:

"Public sector workers are on average 10 per cent better off than their private sector counterparts, especially when taking into account generous final salary pension schemes. The long-term cost of those pensions will unfairly fall squarely on the shoulders of our children and grandchildren, so it's crucial that the government remains committed to getting the books balanced."

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