Research shows chancellor was wrong on pay progression

A new report has cast doubt on claims about public service pay that were made by Chancellor George Osborne in his June 2013 spending review statement.

The research challenges the claim that pay progression (annual salary scale increases) in the public sector differs markedly from the private sector.

Speaking in June, Mr Osborne made great play of “antiquated” pay progression in the public sector, claiming that it was made regardless of performance.

He said that he would try to end automatic pay progression in the sector.

However, Income Data Services, the UK’s foremost labour market specialist, has looked in detail at how pay progression works in both public and private sectors, and found that length-of-service awards are not uncommon in the private sector.

For example, researchers found that Anglian Water, KFC, Nissan, HSBC, E.ON, Waitrose, Honda and John Lewis all operate pay progression systems that are “similar to how pay operates in the public sector”.

The research also shows that pay progression in the public sector is often a mixture of length-of-service awards and a recognition of an employee acquiring new skills.

The report found that the cost of pay progression is “arguably” neutral and that it boosts recruitment and retention of staff – key factors is improving and maintaining quality public services.

UNISON assistant general secretary Karen Jennings said: “The revelation that the chancellor has, once again, got the detail wrong on public sector pay will put pressure on him to change course.

“Contrary to his claims, pay progression in the private sector often includes a ‘length-of-service’ element. Pay progression in the public sector is not antiquated or even unusual.

“What people want is a government that recognises the huge contribution that public sector workers make – day in, day out. Their jobs and their pay and conditions have been punitively targeted by the government, often on the most spurious of pretexts.”

Local government pay

Pay in education

Defending Agenda for Change in the NHS