Budget 2012: Strathclyde in line for public service reforms

STRATHCLYDE looks set to be in the front line of reforms to public sector pay rates across the UK aimed at freezing the pay of thousands of staff according to local labour markets.

STRATHCLYDE looks set to be in the front line of reforms to public sector pay rates across the UK aimed at freezing the pay of thousands of staff according to local labour markets.

New evidence published by the Treasury yesterday shows the Glasgow region has the second highest “public sector premium” in the UK, with staff in the public workforce earning 17.5 per cent more than equivalent private sector workers.

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Public sector staff in the rest of Scotland, by contrast, have a premium of just 10 per cent. If public sector pay is decided on a regional basis, as planned, it could mean affected staff in Strathclyde end up with lower pay than colleagues elsewhere in Scotland.

The new data emerged as Chancellor George Osborne confirmed yesterday that he intended to press ahead with moves to end national pay bargaining. Instead, civil servants will have power in local areas to decide pay rates.

In evidence submitted yesterday, the government declared the existence of public-private disparities suggests the taxpayer “pays more than is necessary to recruit, retain and motivate staff in some areas”.

It also argues that cutting pay rates could boost private firms, which find themselves priced out of the local market by high pay rates in the public sector.

But critics argue it will only cement the north-south divide, plunging parts of the country deeper into recession.

Sources say it is “unlikely” that anyone’s existing pay will be cut. Instead, departments may choose simply to increase wages at a slower pace than in other regions or to ask new entrants to accept lower pay.

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