It was announced this week that more than two million public sector workers would receive some of the highest pay rises in nearly twenty years, following an annual recommendation by independent pay review bodies. Teachers, nurses and police officers among other professions were awarded increases of about 4 to 5 per cent, significantly higher than previous rises. Yet amid spiralling inflation, which hit a new 40-year high of 9.4 per cent in the year to June, unions have described the announcement as a "kick in the teeth".
The education sector has seen one of the biggest hikes, with starting salaries of £28,000 for new teachers outside London equating to a 8.9 per cent rise, while more experienced teachers will receive around 5 per cent. Police officers of all ranks were awarded £1,900, meaning new recruits receive a similar 8.8 per cent increase, albeit with more senior and experienced officers receiving less. Eligible dentists and doctors will receive 4.5 per cent with newly qualified nurses seeing their pay packet increase by 5.5 per cent.
However, these figures remain well below the current rate of inflation, which is predicted to reach 11 per cent this autumn. Unions have criticised the government’s pay awards for being inadequate in response to the ‘cost of living crisis’, with energy and food costs continuing to soar. There are serious concerns regarding retention in the public sector if stagnating pay is not addressed, with Unison general secretary Christina McAnea warning that “fed-up staff might well now decide to take the matter into their own hands”. This was echoed by Laurence Turner of the GMB, who claimed “an offer below inflation is a cut by another name…recruitment and retention problems are now severe across the public sector and ministers are failing to invest in the services that the economic recovery needs”.
Indeed, pay disparity is deepening at alarming rates, as private sector pay grew almost five times as fast as public sector workers’ remuneration in the year leading up to May. There is a real challenge to retain experienced staff and attract new recruits, particularly when private firms are offering far higher wages. Police forces across the UK have suffered from exceptionally high attrition rates, with 19.3 per cent of Northamptonshire recruits quitting during probation, alongside 16.8 and 16.1 per cent in North Yorkshire and Cambridgeshire respectively. Similarly experienced officers are leaving in search of better pay and lifestyles.
Likewise schools and colleges face the same problem, with 95 per cent of headteachers expressing difficulties when recruiting staff and 43 per cent describing the problem as “severe”, according to the Association of School and College Leaders (ASCL). Some point to excessive workloads and stress, yet a below-inflation pay offer certainly does little to ameliorate these pervasive issues.
The government has rebutted any criticism by warning of further inflation if pay rises are too generous. Chancellor Nadhim Zahawi urged teachers and nurses to "be disciplined about pay" when speaking to LBC earlier this month. Moreover James Cleverly, Secretary of State for Education, described this year’s pay awards as “a careful balance between recognising the vital importance of teachers, whilst delivering value for the taxpayer, not increasing the country’s debt further, and being careful not to drive even higher prices in the future”.
It is clear that the government is reluctant to offer big pay increases under the guise of inflationary pressure, with parallels being drawn to the wage-price spiral in the 1970s. Indeed our public finances are far from buoyant after two years of economic disruption caused by the pandemic, hampering the Treasury’s ability to match the offerings of private firms. However penalising public sector workers, incidentally most of whom did not benefit from any COVID support schemes, is a risky strategy which could feasibly end in a staffing crisis. As the BMA, FBU and RMT unions representing doctors, firefighters and railway workers threaten strike action, it appears we may see a return to the 1970s with a ‘Summer of Discontent’ instead.
