Yesterday the government finally abandoned the unfair cap on public sector pay by giving over 1 million public servants a pay rise above 1 per cent.
This includes a 3.5 per cent increase for teachers, 2.9 per cent for the armed forces, and a 2 per cent consolidated rise for prison and police officers.
It’s testament to the hard work and campaigning by public service unions that the government has been forced to lift a cap imposed seven long years ago.
But as long as below inflation pay rises remain in place for some public servants, the fight for a fair pay deal for all will go on.
And unless the Treasury allocates further funding to cover today’s pay rises, over-stretched departmental budgets will come under greater pressure and frontline services will continue to suffer.
That’s why we’ll keep pressing for a properly funded pay rise until every hardworking public servant gets the fair deal they deserve.
Last year we set out five key tests to ensure a fair pay deal for public service workers. So how does today’s announcement measure up?
1. Remove the pay cap for all public service workers
While some public servants will get a rise above 1 per cent, many others will still face below inflation pay rises – some barely above the cap that the government claims to have abandoned.
This includes many hardworking civil servants who aren’t covered by the pay review body announcement today. That’s because Treasury pay guidance limits average pay increases for central government departments to between 1 and 1.5 per cent.
Then there are those who were included in today's announcement but still won’t be getting what they deserve, such as school leaders and head teachers.
Despite fighting hard to keep schools going in the face of damaging budget cuts, they’ve been rewarded with a paltry 1.5 per cent rise.
Real terms pay cuts for some but not for others is simply unfair. Public servants work together every single day – they should all be getting a decent pay rise.
2. Allow employers and unions to determine appropriate pay awards for each sector through collective bargaining or genuinely independent pay review bodies (PRBs)
It’s good news that the 1 per cent cap has finally been breached, but worrying that the Treasury is still issuing public sector pay awards by diktat.
On all counts, today’s rises fall short of what independent PRBs called for – and they’re miles away from the 5% increase that some unions are demanding.
For example, instead of the 3.5 per cent rise for all teacher pay grades recommended by the School Teachers Review Body, only the three in five teachers on the main pay scale will get this. Those on the upper range will get a below inflation 2 per cent, while school leaders have to put up with just 1.5 per cent.
And instead of the 2.75 per cent rise for prison officers recommended by the Prison Service Pay Review Body, prison officers will get a 2 per cent rise with a 0.75 per cent one off, non-consolidated payment on top. This is a particularly worrying direction of travel.
The government's rejection of PRB recommendations calls into question their independence, role and purpose.
And in areas where collective bargaining determines pay, civil service and local government employers are handing down take it or leave it offers with little scope for negotiation.
PRBs and collective bargaining both help employers and unions to agree on the right pay structure for the sectors and industries they represent.
So it’s high time ministers started listening to them and stopped letting the Treasury call the shots.
3. Provide new money for pay awards without putting pressure on existing budgets
Few details have emerged as to how these pay rises will be funded, but we do know that there will be no additional money from the Treasury (unlike the recent NHS pay deal).
In some cases, the government has attempted to protect front line services.
For example, to ease pressure on core school budgets, the Department for Education has promised to meet any additional costs incurred by schools above 1 per cent.
Yet it’s unclear which part of its budget will be used to meet this commitment – and it’s unlikely to ease the intense pressure on school budgets in any case. The 1 per cent rise alone will add £250m to the amount that schools will need to meet out of their existing over-stretched pots.
Furthermore, schools will also have to pick up the tab for increases in the local government pay award for support staff and teaching assistants, which is estimated to be around £300m per year.
So school budgets will remain under extreme pressure come what may.
And we can only guess what the impacts will be in the police, armed forces, prisons and other areas where pay awards will be met from existing budgets.
That’s why we really need properly funded pay rises for all public service workers.
4. Ensure new pay awards recognise the loss of earnings over the last seven years
TUC analysis released last year found that a range of different public-sector occupations were earning between £3k - £6k less in real terms than they were in 2010 – school teachers’ pay, for example, had declined by up to 15 per cent in real terms.
Any fair pay strategy for the public sector must address this by offering pay rises that meet the cost of living while making up for the loss of earnings experienced over the last eight years.
Few of the pay deals announced to date will provide that, although some of the restructured pay bands in the NHS and local government will help.
5. Eradicate poverty pay by ensuring no public service worker earns less than the real Living Wage
Some progress has been made to address low pay in the NHS and local government through recent commitments to pay the Living Wage and adjustments to the lowest pay grades.
Yet poverty pay remains a massive problem in outsourced areas, most notably in social care services.
Much more needs to be done to ensure these public sector service providers pay a living wage, either through greater use of public procurement or through the government raising the national minimum wage to £10 an hour.
After seven years of public pay restraint, it’s time for ministers to start putting their money where their mouth is.
They will no doubt say that the money simply isn’t there, but this is about political choices.
We’ve written before about how increasing public sector pay not only puts money into the economy but also pays for itself through increased tax revenues and a reduced in-work benefits bill.
And if the government can afford to cut corporation tax, it can surely afford to pay our public servants properly.