Latest Public Sector News

16.05.16

Public sector pay failing to keep up with cost of living

Public sector employee wages are failing to keep up with the cost of living because of the requirement on employers to pay for the apprenticeship levy and national living wage, the Chartered Institute of Personnel and Development (CIPD) has said.

CIPD’s latest Labour Market Outlook Survey found that median basic pay expectations in March 2016-17 are 1.7%, below the government’s 2% inflation target, meaning wage increases are not keeping up with the cost of living.

It is particularly bad among larger employers and the public sector, both of which are facing a pay increase of just 1%, compared to 2% for smaller employers and the private sector. Last year, the Institute for Fiscal Studies warned that the government’s plan to cap public sector pay increases at 1% for four years from 2016-17 could make it “harder to recruit and retain” quality workers.

Pay freezes in spring 2016 were also expected by 12% of public sector employers, compared to 8% of private sector employers and 10% of voluntary sector employers.

The figures come despite a continued increase in jobs, with the net employment balance, which measures the difference between the proportion of employers who expect to increase and those that intend to decrease staff levels, increasing to +28, up from the +21 since the previous report.

CIPD warned that public sector employers were likely to be feeling the impact of new costs such as the National Living Wage, the apprenticeship levy and pensions auto-enrolment, as well as facing continuing productivity difficulties.

Mark Beatson, CIPD chief economist, said: “It’s not good enough for the government to make these changes and say ‘over to you’. The government needs to provide greater support and employers are going to have to be more and more creative in how they manage reward and motivate employees.”

He warned that otherwise, employers would take “easier options” to compensate for the loss of income, such as reducing hours, benefits and the next round of pay increases.

He called for the government to more actively intervene with employers to help them increase productivity.

The Strategic Development Network warned recently that the apprenticeship levy is a ‘step in the dark’ for many councils, who are unprepared for the costs.

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

last word

Parliament cannot solve homelessness through legislation alone

Parliament cannot solve homelessness through legislation alone

Cllr Michelle Lowe, deputy leader and cabinet member for housing and health at Sevenoaks District Council, argues that if the government is really serious about combating homelessness they will work more > more last word articles >

public sector focus

View all News

comment

Time to embrace change

01/03/2017Time to embrace change

The way we work is changing. As a profession, we must be ready to embrace i... more >
Digital Marketplace: reaching far and wide in the public sector

01/03/2017Digital Marketplace: reaching far and wide in the public sector

Over the next few months, the Government Digital Service (GDS) wants to get... more >

interviews

Leading transformational change through procurement

01/03/2017Leading transformational change through procurement

Liz Welton, chair of the Society of Procurement Officers in Local Governmen... more >

the raven's daily blog

Why opening up procurement matters to the UK public sector

22/03/2017Why opening up procurement matters to the UK public sector

Rob Levene, managing director of Bloom, explains why opening up procurement is important to the UK public sector.  Procuring products and services by the UK public s... more >
read more blog posts from 'the raven' >

editor's comment

21/02/2017Untapped potential

As PSE went to press, the government had just released its Industrial Strategy green paper, which has an ambitious aim to “improve living standards and economic growth by increasing productivity and driving growth across the whole country”.  Overall, the strategy was welcomed across the public sector. However, as you’ll read throughout this edition of the magazine, in order to make the aspirations a reality, there needs to be a greater level of freedom for all... read more >