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General Council Statement on public sector pay

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Research and reports
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General Council Statement on public sector pay

The Public Service unions, and the TUC care deeply about delivering high quality public services.

Public services reform and particularly public services pay, have been major General Council concerns throughout the year. Public servants have continued to demonstrate their dedication and commitment in responding to national emergencies, tackling floods and their aftermath, preventing the spread of foot and mouth, tackling terrorism and crime and delivering health, education, justice and welfare services to the country. Yet below inflation pay rises mean pay cuts in real terms for public sector workers who deserve better treatment.

Recent years have seen a sustained commitment to increased investment in many areas of the public sector and an expansion in public service employment after years of under-investment. This should give public service workers and users cause for celebration. But instead there is increasing concern - shared by the General Council - that the benefits which should flow from this welcome investment in public services are being jeopardised by job cuts, below inflation pay rises and the increasing use of outsourcing and privatisation in public services.

Government policy on public sector pay settlements for 2007/08 is based on a two per cent target, with the scope to go even lower. The Chief Secretary to the Treasury stated in May 2006 that 'within this overall envelope there will be justification for lower awards for those workforce groups for whom the current level of pay is already generous.' He also stated that public sector pay restraint was necessary in the context of a tight spending round in the 2007 Comprehensive Spending Review (CSR).

The last time large numbers of public sector employees received such low increases was in 1993, when the then Conservative government imposed increases of 1.5 per cent on all groups. That was at a time when the economy was only just coming out of recession. The economic picture today is much healthier with the government recently claiming the longest run of quarterly increases in economic growth since comparable records began. The ostensible justification for pay restraint is the danger of fuelling public sector pay inflation yet this has not been cited by the Bank of England in their report to government on the factors linked to inflation.

It is surely wrong that public servants should be made to bear the brunt of government cost cutting. And it is doubly wrong that in the fourth richest economy in the world, while some of the UK's lowest paid workers should be expected to take what is in effect a pay cut, company directors received last year a 37% rise in their rewards package, worth £14 billion paid out in bonuses.

This situation risks a return to the boom and bust years of the 1980s and 1990s of public sector pay which did so much to damage public services. Recent progress made within some sectors of the public service in modernising pay structures risks being undermined by under-funding and pay squeezes. The growing gap between private sector and public sector earnings will result in recruitment shortfalls, failure to retain staff, and poor staff morale.

There is also grave concern at the damage done to established mechanisms for pay determination by some recent government actions. The staging of the NHS pay review body recommendations can only undermine the credibility of their awards, particularly when they were paid in full within Scotland, Wales and Northern Ireland. In teaching, during the current settlement period, there are clear signs that pay has not kept up with inflation, risking damaging faith in those multi-year deals which can do so much to promote stability. This must be addressed by the Pay Review Body and the Government. In addition, the use of the CPI, rather than the RPI as a reference point for pay rises is an unwarranted departure from accepted norms within pay bargaining, which take the RPI as the key indicator as it reflects changes in the real cost of living more accurately than the narrower CPI. . The framework of public sector pay determination rests upon a foundation of fairness, equity and respect - as set out in the public sector pay and reward principles, negotiated with and agreed by government through the Public Services Forum. Urgent action is needed by government to restore belief in governmental support for those principles.

The General Council is also deeply concerned over the use of local and regional pay in public services. The threat has loomed heavily for the past few years and developments in the Ministry of Justice have put this threat into sharp relief. The Civil Service remit guidance requires departments to consider local pay as part of the business case they submit to the Treasury every year and all groups covered by the review bodies have an obligation to consider local pay in their terms of reference . The Ministry's review of pay structures has introduced five separate geographically based scales with three extra variations for specialist staff. The General Council is opposed to this development and similar developments in public services, which would exacerbate existing regional inequalities, particularly where the public sector is a dominant local employer. The General Council remains opposed to the use of regional pay which threatens to undermine national pay and bargaining frameworks which promote stability, fairness and equal pay.

In addition to these major pay issues there is also deep concern over the programme of job cuts and relocation being driven through in the wake of the Gershon and Lyons revie ws. Targets appear to have been set for job cuts with little concern for the quality of service to users, often among the most disadvantaged in society, nor the added stress imposed on remaining public service staff that are under pressure to provide the same level of service. All too often there has been little real consultation with the recognised unions nor sufficient efforts to avoid job losses, particularly compulsory redundancies, through the agreed procedures for relocation, retraining and transfer elsewhere within government.

Added to these twin pressures on pay and jobs are the pressures of increasing workloads arising from continual change in the organisation, funding and delivery of public services. The programme of privatisation, outsourcing, commissioning and marketisation across the range of public services, in Health, Education, Local Government, National Government, the Justice System, Emergency Services and elsewhere continues to cause major disruption both to users of public services and staff. Services are being fragmented by handing them over to private providers instead of investing in public capacity, while mounting evidence shows that real service improvement is being undermined by the imposition of market models.

The General Council expresses its solidarity with unions faced with these pressures and challenges and in particular gives full support to unions taking action to defend jobs and services and to win fair pay. Through the regular meetings of the Public Services Liaison Group the TUC will continue to bring all public service unions together for campaigning on a united basis to coordinate union action and campaigning, including where appropriate industrial action.

The General Council calls for a fresh start from government in their approach to public service reform. Work is underway to take forward a compact which would, in line with the Warwick agreement, ensure that all workers delivering public services, whether directly employed or contracted, had access to basic skills, advice and unions. The Public Services Forum has helped encourage all government departments, the NHS and many local authorities to sign up to the Skills Pledge and to develop a skills strategy across the public services. Further work is also needed to ensure delivery of the two-tier workforce agreement across the public sector.

Those moves are welcome and steps in the right direction but much more is needed. Government should act with energy to restore faith in - and adhere to - the proper functioning of the pay determination machinery; honour Pay Review Body awards and demonstrate adherence to the agreed public sector pay and reward principles - including in particular the need for fairness and equity for the lowest paid, and the vital need to deliver on equal pay; take urgent steps to end the current disputes across government; rebuild constructive relations with the public services trade unions and ensure that there is genuine consultation on proposed changes in the organisation of public services. The public services trade unions, and the General Council, are certainly not opposed to change and care deeply about delivering high quality public services, but this will not be achieved at the expense of hard working staff, nor at the risk of jeopardising the public service ethos which is so important to their work.

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