By a Newsnet reporter
The announcement ahead of George Osborne’s budget this week that the UK government will scrap national pay rates for civil servants across the UK has been met with outrage. According to the Coalition’s plans, civil servants in “poorer” parts of the UK will be paid less than those in the more propserous South East of England.
Critics of the plan claim that it will reinforce the existing economic gulf between richer and poorer areas and depress regions of the country already struggling in the economic downturn.
The pay differential will be implemented by freezing pay rates from next year until they fall into line with regional private sector wages. The UK Treasury believes that public sector pay should reflect local economies and mimic the private sector.
Treasury officials claim that the change is needed because public sector wages are up to 18 per cent higher in some areas than they are for equivalent private jobs. The Treasury believes this discourages recruitment and investment in the private sector.
It is understood that the regionalisation process of salaries will begin in three Whitehall departments in the coming financial year, before being introduced across the Civil Service. The Department for Work and Pensions, the Home Office and the Department for Transport are first in line for the change.
There remain many uncertainties in the details of how the pay differential will be implemented. It is not clear whether the changes will apply to existing staff or only to new employees but assurances have been made that no current employee will suffer a pay cut. The new pay rates will affect public sector workers in Scotland who work for departments which are not devolved to the Scottish Parliament.
Business Secretary Vince Cable said care needed to be taken over how local pay rates would be implemented.
Speaking to BBC radio, the Business Secretary said: “The idea of having more flexibility in the public sector is surely right. What we are trying to do is to make sure that throughout the public sector there is more genuine decision-making at a local level and you have to take into account pay and conditions.”
Trade unions have described the plans as “cruel” and “grotesque”. Trades Union Congress general secretary Brendan Barber said: “Moving to regional pay will not just reduce the pay of millions of public servants, but hit regional economies outside London and the southeast as people have less to spend.
“This budget is shaping up to be a giveaway for the super-rich and a takeaway from Britain’s hardest-hit regions.”
Len McCluskey, general secretary of Unite, which represents many public sector workers, said: “All this will do is drive workers to the better paid regions, leaving large parts of the country without the professionals essential to sustain local services.
“George Osborne’s budget will reveal him as a grotesque reversal of Robin Hood, rewarding the super-wealthy by allowing them to skip over their tax responsibilities while mugging the low waged.”
Mark Serwotka, general secretary of the Public and Commercial Services union, said: “Driving down pay even further at the same time as cutting public sector salaries and pensions, and planning to cut the 50p tax rate, would not only be cruel it would be economically incompetent and counterproductive.
“Local economies – already suffering from Tory-led, politically motivated butchery – are crying out for investment, not more cuts. It appears that next week’s budget is shaping up to include the exact opposite of what our communities need to help them get back on their feet.”