Public sector pay still higher than private

Elizabeth Fournier
THE PAY gap between the public and private sector is at its widest since 2001, ONS figures showed yesterday, with state workers now paid an average of between 7.7 and 8.7 per cent more than private sector employees.

The data, from April 2011, shows the pay gap has risen sharply from 5.9 per cent in 2008, having previously fallen from a high of 7.6 per cent in 2005.

The figures assume that employees at nationalised banks still count as private sector employees. Without this assumption the gap would rise past nine per cent. The data does not include pension contributions and other benefits more likely to be enjoyed in the state sector.

The news will fuel concern that the pay freeze in the public sector is failing to have a sufficient effect at rebalancing rewards between the state and private sectors.

The ONS cited several reasons for the increase, including the higher proportion of skilled jobs in the public sector as lower skilled jobs are outsourced, as well as the number of older employees likely to be on higher salaries. State workers are more likely to have university degrees.

But critics say that the public sector rewards seniority and paper qualifications too much, and that it should focus on merit and performance instead.