CREDIT: This story was first seen in TES
TES reports that the findings of a new report reveal that the average pay of public sector workers is falling following years of wage restraint and rising inflation.
The Resolution Foundation forecasts that average ‘real’ pay – taking into account inflation – will fall back below 2004-05 levels by the end of the current Parliament in 2020.
On current trends, the average pay of public sector workers will be £1,700 lower in 2020 than its peak in 2010, the thinktank says.
The lowest earners will be protected from falling pay because of planned increases to the national living wage, it predicts.
Adam Corlett, economic analyst at the Resolution Foundation, said: “While rising inflation is applying the brakes to real pay growth across the board, the outlook for public sector pay looks particularly weak.
“Pay is now actually falling and, worse, is expected to continue for the rest of the Parliament, with levels at the end of the Parliament dropping back to levels last seen in 2004.
“Although public sector pay restraint is important to the government’s deficit reduction plans, falling real pay is likely to see increasing recruitment strains.
“The government should be planning now how to manage those strains, alongside any wider changes to policies like migration that will also have an impact.”
Unison general secretary Dave Prentis said: “After years of pay restraint, those delivering our public services are facing yet more financial hardship.
“School staff, nurses and council workers are struggling to make ends meet. If ministers don’t reverse their damaging policy of zero or one per cent rises, it will be harder to recruit new staff or keep those with experience.”
A Treasury spokesman said: “The government has made difficult decisions on public sector pay to maintain fiscal discipline and protect jobs.
“The Office for Budget Responsibility has forecast that current pay policy will protect approximately 200,000 jobs across the UK.”