08.07.15
Public sector pay rises frozen at 1% for next four years
The chancellor has announced that the government will only fund public sector workforces for a pay award of 1% for four years from 2016-17 onwards.
He said that this will save approximately £5bn and that the government expects pay awards to be applied in a “targeted manner” within workforces to support the delivery of public services.
During George Osborne’s Budget Speech, he said: “To ensure we have public services we can afford, and protect more jobs, we will continue recent public sector pay awards with a rise of 1% per year for the next four years.
“Public spending should reflect public priorities – and we have to make choices.”
Osborne added that, overall, levels of pay in the public sector are now, on average, comparable to those in the private sector. However, public sector workers continue to benefit from a significant premium once employer pension contributions are taken into account.
He said the government will work with Local Government Pension Scheme administering authorities to ensure that they pool investments to significantly reduce costs, while maintaining overall investment performance.
It was also noted that as part of the forthcoming Spending Review, the government will continue to examine pay reforms and “modernise” the terms and conditions of public sector workers. This will include a renewed focus on “reforming progression pay”, and considering legislation where necessary to achieve the government’s objectives.
Mark Serwotka, Public and Commercial Services Union general secretary, said: “Osborne hypocritically talks about cutting tax credits to increase wages while the last government cut living standards for civil servants by up to 20% and he now plans four more years of pay caps.
“It is sickening to see Tory MPs braying and cheering while the chancellor rewards the wealthy and punishes the poor.”
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