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Wages in public sector still beat private sector

A NEW report published today reveals the gulf in wages between the public and private sectors, with government workers in some regions earning thousands more than their private counterparts every year.

Despite the public sector pay freeze, think tank Policy Exchange says its calculations show that public sector salaries still outstrip their private sector equivalents by more than 10 per cent in much of the north and south west of England.

Even after circumstances like age, gender, qualifications and length of employment are taken into account, there is a pay premium of 6.1 per cent, worth up to £3,200 in some parts of the UK. The figures show that the highest government-employed earners take a penalty, with wages 4.8 per cent lower than private counterparts.

However at the bottom of the income table a public sector worker can expect to earn 14.1 per cent more than someone with the same background and experience in the private sector.

The gap is widest in favour of public pay in much of the north east of England, where median hourly pay is 14.41 per cent higher. In inner London, the trend is completely reversed, and private sector employees have a 3.31 per cent premium in wages.

Policy Exchange’s Matthew Oakley says that the figures make an argument for the abolition of national pay bargaining in the public sector: “It is bad for the economy and bad for public services.” He added: “While the unions should still have a strong role, in the future we should move to a system where local public sector employers can decide how to negotiate salaries with employees in order to reflect the realities of their local labour market.”

New figures released yesterday also suggest that despite median wages continuing to rise, the number of civil service employees is steadily declining.

There were 448,835 civil servants working at the end of March this year, 15,000 fewer than during the same period in 2012.

Since 2010 the number of civil servants has fallen by just shy of 15 per cent, impacting administrative staff the most.