The UK government’s offer to pay public sector wages pleases no one

The government’s 5% wage offer for public sector workers is an attempt to tackle a host of pressing problems – staff shortages, ongoing strike action, rising inflation and household budgets. family is squeezed – while leaving the next UK prime minister financially fit to cut taxes. In this event, it did not please anyone.

But the government’s partial concession to workers’ demands reflects the fact that market forces, as well as union activism, are now driving wage growth with inflation above 9%. and is increasing.

The deteriorating economic outlook has yet to dampen the heat of the UK labor market, with Office for National Statistics figures showing unemployment remains below pre-pandemic levels, overcapacity at record low and vacancies – while close to peaking – at a new high of 1.3 mn.

In this context, many private sector employers have been forced to Strong salary increase to recruit and retain employees. Business leaders giving evidence to MPs on Tuesday said wage bonuses are currently running at 6 to 7 per cent, with many negotiating mid-year increases to compensate workers for spending cost of living increases, in addition to the usual annual increase.

ONS data shows that private sector wages grew nearly five times faster than public sector workers’ wages in the year to May, driven in part by businesses in many sectors – not just financial services. key – took advantage of more than one-time recruitment and retention bonuses.

“It is the market, not the military, that drives wages higher – with the public sector lagging further,” said Tony Wilson, director of the Employment Research Institute.

Decisions of the Ministers on authentication The pay agreements for 2.5 million public sector workers, averaging around 5%, reflect the recognition that such a large gap between the private and public sectors is no longer possible – with the problem Increased hiring on key services and the risk of a strike.

The government claims most overall salary awards in the public sector will be similar to those in the private sector, and argues that it cannot go any further without energizing. persistently high inflationmake people worse in the long run.

But the backlash from unions in the public sector suggests that ministers have not gone far enough to stem the threat from industrial action or to fix hiring problems.

Union leaders described the pay transactions to their respective members as “pitiful”, “disappointing”, “completely inadequate”, “seriously wrong” and “a blow” kick in the teeth”.

The British Medical Association said the 4.5% pay increase for doctors not covered on current multi-year pay contracts represented “brutal” and “brutal” real-time pay cuts. professional betrayal”.

While in most cases the pay rise would be more generous for workers at the bottom end of the pay scale, the Trade Union Congress said the NHS deal would cut wages by £200. health of hospital porters this year, the real wages of nurses in pounds. 1,100 and that of medical staff more than £1,500. Frances O’Grady, TUC Secretary-General, said the award would “hit morale at a time when staff turnover is high and staff shortages are crippling critical services”.

But while the bonuses aren’t generous enough to assuage the anger of many public sector workers, they will come at a price that – compared with previous plans – has left public sector managers with face very difficult decisions, in the absence of any new funds from the Treasury. .

Ben Zaranko, economist at the Institute of Fiscal Studies, said current spending plans cannot be ready to accommodate the 5% bonuses – the cost would be around £7 billion more than the plans. before – but providing the necessary funding would be “obviously unattractive to a set of prime ministers who will all want a tax cut”.

Geoff Barton, general secretary of the Association of School and College Leaders, thinks teacher pay is “the worst in the world” as teachers will face significant pay cuts. in real terms, while the higher wage bill would exacerbate the pressure on schools. budget.

Anita Charlesworth, director of research at the Health Foundation, said the new offer for NHS staff meant the trusts were launched with “a near-impossible mission they are set to fail”. , as they were required to save large efficiency.

She also questioned the decision to focus on paying the lowest paid staff, saying it was understandable given the rising cost of living, but could make it harder for the NHS to keep experienced staff. more experience.

Fresh evidence of the urgent need to hire and retain more staff was highlighted in new research by the Health Foundation on Wednesday. It found that the NHS in England could face a shortage of around 38,000 equivalent full-time registered nurses by 2023-24 if they continue to deliver pre-pandemic levels of care.

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