Summary of the editorial from IDS Pay Report 973, April 2007

Private sector forges ahead as Government curbs public sector pay

The gap between pay increases in the private and public sectors is set to widen, following the announcement of the Government’s response to the Review Body awards for nurses, doctors, prison officers and senior civil servants. The Review Body for the largest group, that for nursing and other health professions (NOHPRB), had recommended a rise of 2.5 per cent for the 840,000 staff affected. However the Government has staged this, along with the recommended rise for prison officers, resulting in increases of 1.5 per cent from 1 April, with a further 1 per cent six months later, from 1 November 2007.

By staging the recommendations, the Government has tried to give the impression that it is paying them in full, albeit in a modified way. But it is doing no such thing. In fact, by staging the award for nurses and other health professions, it has gone some way to achieving its desired outcome for the 2007 pay round. In its evidence to the NOHPRB in October it called for increases of just 1.5 per cent for these employees. This resulted in fairly modest recommendations from the Review Body. But by staging the award, the Government has managed the actual increases down further in line with its targets. Review Body status had been mooted for support staff in the NHS, and as an option for pay determination for the police. But after this year’s round, they might well ask, what does Review Body status mean now?

Government policy impacts on NMW recommendations too?

The Government’s policy on pay may also have had an influence on the Low Pay Commission’s recommendation for the October 2007 increase in the National Minimum Wage. The rise of 3.2 per cent, which will take the rate to £5.52 an hour from 1 October 2007, is not only below the current median for pay settlements, it is also below average earnings growth and the all-items RPI (though it is roughly in line with forecast inflation for the end of 2007).

... the full editorial can be read in IDS Pay Report 973