Public sector workers feel the pinch as real pay levels fall


The average pay of public sector workers is falling following years of wage restraint coupled with rising inflation, a new report reveals.

The Resolution Foundation forecast that average real pay will fall back below 2004/5 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, said the think tank.

The lowest earners will be protected from falling pay because of planned increases in the National Living wage, it was predicted.

Pay growth has been particularly weak in health and social work and could fall by a further 6% by 2020, it was found.

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, worst, 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 commented: "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 don¹t reverse their damaging policy of zero or 1% 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 OBR has forecast that current pay policy will protect approximately 200,000 jobs across the UK."