George Osborne’s populist attack on public sector salaries made for just the headlines he wanted. He promised to end “automatic progression pay” in the civil service by 2015-16, and to work towards ending it in the education system, the NHS, the prison service and police service.
The issue is a good deal more complex than the easy headlines make it out to be, however. Pay reform will be very tough to implement, and its too early to tell if the political will exists to see it through.
The text of the Spending Round 2013 report can help interpret what has been announced in the House of Commons. It is inevitably more cautious than the headline writers. But in between the nuanced language of the report and the sensational headlines, we can get a sense of what actually lies ahead for public servants.
The government has only committed to make a plan, not to end pay progression immediately. These plans will undoubtedly take some time to complete and are likely to come under review with the election of a new government, of whatever party, in 2015.
Teachers and workers from the health, prison and police services, are likely to see little change in their progression pay any time soon. It’s clear that some reforms will be taken forward, or are already underway, but there is no clear timescale for implementation.
Many of these workers have not received “automatic progression pay” in many years anyway. For some, progression pay may already be linked to performance. For others, it has been frozen for some time. For the minority who do still receive progression pay purely as a result of time in post there is likely to be a move towards linking progression pay to satisfactory performance. But again, something tells me this won’t happen tomorrow.
Even if the government were being more forceful, there are some real implementation issues involved. Progression pay is typically a contractual obligation, and changing the terms and conditions for public service workers would therefore mean renegotiating all these contracts. Given that there are more than 200 separate bargaining units in the civil service, each with their own pay structures and their own terms and conditions of employment, politicians are likely to avoid this task in the run-up to a general election.
It is important to remember that what is at play here is politics. Whatever happens regarding progression pay in the public sector, the chancellor has set out his stall for the upcoming election campaign. There is an apparent political desire to play to the galleries in stating that “some public sector employees see annual pay rises of 7%”, referring to progression pay as “antiquated” (though it is being retained in the armed services) and drawing distinctions between public and private sector pay.
Again, pay realities are very different for many public sector workers. For example, three quarters of council workers currently earn less than £21,000. Almost two thirds of civil servants earn less than £25,000. Yes, average pay in the public sector is higher than in the private sector. But it is also true that a significant number of low-paid jobs in the public sector have been privatised over the last 20 years. Those who are left are disproportionately employed in professional roles such as doctors, nurses and teachers.
These same professional workers face the challenge of continuing to deliver vital public services such as healthcare and policing with fewer staff and less resources. Additional cuts risk affecting stress levels as well as morale, productivity, recruitment and retention. Nurses, teachers and carers are already among the most stressed workers according to the Health and Safety Executive.
At a time when public services are facing such significant change and uncertainty, the biggest challenge for employers will be to find new ways to attract, train and retain skilled public service workers in the future. Cutting progressive pay, or even talking about planning to, won’t help.