Public sector national pay rates could be about to end

[Pupp]

TankRizzo said:

As I understand it pay won't be getting "cut" anyway, more that as other parts get rises and bonuses, those areas will not. So a cut in real terms but only due to inflation.

Doesn't sound so juicy a union soundbite when you put it like that, does it.

Try adding in that most of those affected will have had two if not three years with no inflation awards already... I'm guessing the unions will have the ear of their members

[DieselGriff]

I think a large proportion of the problem is down to the private sector perception of the public sector.

If you agree with the level of public sector interference in our lives (and you have to accept that by voting for any of the three main parties you do even if the intention is different) then you have to accept the consequences.

The consequences are that there will be a high level of bureaucracy that will mean no independent thought from the people you have to deal with - they live by the rule book, if they want to keep their job they can do no different - If this doesn't suit then you may complain via the rule book only to be told that everything was done by the rule book (even if it wasn't), you can complain to higher level who will check that everything was done by the rule book and will advise as such - so you complain to your MP who will make lots of noise, jump up and down, make sure the rules were followed - and then tell you that it's in the rule book and it's for your own good and trust me I'm a politician.

Politicians write the rule book.

This is the consequence of big interfering government.

[rover 623gsi]

bizarrely - it doesn't even seem to about saving money. Apparently, in some areas private sectors find it difficult to recruit because they can't match public sector salaries. Reducing public sector will therefore make our economy more competitive.

Genius.

[Deva Link]

sidicks said:

mph1977 said:

regardless of the value of the roles - these 'average' figures are misleading

- why are they misleading ?

Presumably they are misleading as they fail to recognise the huge pension subsidy?!

I know we've discussed this before but a future pension doesn't pay today's bills. Both my kids work in the public sector, one in the NHS and the other is a teacher, and they certainly aren't sitting there thinking "yippee, in 40 years time I'll get a great pension".

Apparantly most of the younger ones don't believe the pension scheme will still exist by the time they retire (there are people who think the State pension is unsustainable) and they would certainly opt out and take the extra money now if they could.

[Deva Link]

rover 623gsi said:

bizarrely - it doesn't even seem to about saving money. Apparently, in some areas private sectors find it difficult to recruit because they can't match public sector salaries. Reducing public sector will therefore make our economy more competitive.

Genius.

I heard that too. Hmmm...it's hard to imagine in S Wales and the North East that it's difficult to recruit the sort of people who staff the DVLA and HMRC call centres.

What's the betting that what actually happens is public sector salaries in the SE increase significantly?

[Murph7355]

mph1977 said:

...
all abandoning national pay scales for the public sector will lead to is a flight of the best staff to somewhere felt to have the best balance between local pay rates and local cost of living - and/or you'll get areas where pay rates and /or job descriptions ( and pay bandings) are fudged constantly as organisations battle to recruit and retain

Has there been a mass exodus of staff to the places with the highest average pay differential to date (I think Yorkshire was mentioned)?

One would imagine that if public sector staff there are paid 18% more (on average) than private sector staff, their relative standard of living would be commensurately higher...? And therefore taking your logic people would have moved there already?

Wouldn't the removal of a standard national payment actually encourage public sector salaries to be better aligned to regional standards and ergo there would be no area especially advantaged or disadvantaged (other than the potential point that no one would want to live in a stehole like Hull )?

Any employer should be looking to minimise its run costs to achieve its given objective. Paying significantly higher than necessary for staff is a key consideration in this. Doing so by default is double stupid.

But as usual, everyone will moan and a potential avenue for saving some cash (believing this isn't a consideration seems daft to me) will be blocked off and no alternatives offered up by the unions.

[F i F]

May I ask what happens with relocation allowances?

Reason I ask is because I encountered one couple whose whole career strategy seemed to be bouncing around the system moving to ever more expensive areas, staying for the qualifying period, then moving again.

Last time I met them they'd been celebrating the jackpot of the offer of a joint move to London. Then were planning in x years time going to move back, having 'banked' the house price and live in a castle. Not literally a castle one assumes but that was the expression they used.

From my own experience of relocation, private sector, I got removal costs etc, and as there was a tremendous difference in house prices then 50% of the mortgage difference for 5 years. That was only because they wanted me, and it was a forced move. Others just got removal costs.

This couple claimed they got the whole difference paid for as long as they stayed, minimum x years, forget the figure now. As long as they stayed a minimum time, then on their next move they kept any capital gains on their residence.

So is it still like this?

[speedy_thrills]

How much will this really deliver in savings?

I was thinking about both sides of the argument about the 50p tax rate the other day. Im not optimistic the UK can plug its 146bn deficit if it cant even keep small measures in place that generate a measly 2.7bn. Government need to find about 24bn this year through expenditure cuts or tax increases to stay on its own schedule. Trimming at the edges will not be sufficient to generate savings akin to abolishing the UKs entire 2011 transport budget in one year.

When you think about the overall scenario the UK is looking to balance its budget by 2016 from a current 9.4% deficit. By comparison Greece managed a similar rate from 2010-2011 cutting its budget at a rate of 2% p.a. over one year (before going belly up), however Ill be very impressed if the UK government can deliver broadly the same levels of cuts over 5 consecutive years to 2016. I suppose you could argue the UK is a special case because it may be able to deliver GDP growth rates of slightly over 1.5% despite the severe austerity however the task has been made more difficult by offering corporate tax cuts and rates freezes.

Im not optimistic the UK can deliver on its schedule if there are any sacred cows.

[Johnnytheboy]

Pupp said:

TankRizzo said:

As I understand it pay won't be getting "cut" anyway, more that as other parts get rises and bonuses, those areas will not. So a cut in real terms but only due to inflation.

Doesn't sound so juicy a union soundbite when you put it like that, does it.

Try adding in that most of those affected will have had two if not three years with no inflation awards already... I'm guessing the unions will have the ear of their members

There was a cracking bit of economics from a union rep on BBC News 24 last night. To paraphrase:

"If you reduce all these peoples' salaries, where's the money going to come from to replace the spending they do that keeps the economy going?"

Now I admit he looked stupid, in the usual 'no hair or neck' union mould, but is anyone actually that stupid?

(The BBC interviewer, meanwhile, nodded sagely)

[speedy_thrills]

Johnnytheboy said:

There was a cracking bit of economics from a union rep on BBC News 24 last night. To paraphrase:

"If you reduce all these peoples' salaries, where's the money going to come from to replace the spending they do that keeps the economy going?"

Now I admit he looked stupid, in the usual 'no hair or neck' union mould, but is anyone actually that stupid?

(The BBC interviewer, meanwhile, nodded sagely)

Which is exactly what happened in Greece (which reduced borrowing by 2% and GDP declined 7%), when governments reduce borrowing GDP decreases. It's not a null point that should be overlooked however the UK government needs to get it's books in order so it may be a necessary pain.

It may be shown that in a recession increasing taxation is preferable to reducing spending for maintaining GDP. However I could swing either way on that depending on what comparable data shows us in a few years.

[sidicks]

Deva Link said:

I know we've discussed this before but a future pension doesn't pay today's bills. Both my kids work in the public sector, one in the NHS and the other is a teacher, and they certainly aren't sitting there thinking "yippee, in 40 years time I'll get a great pension".

Indeed not, but if would misleading to compare remuneration between the sectors without taking this into account.

Deva Link said:

Apparantly most of the younger ones don't believe the pension scheme will still exist by the time they retire (there are people who think the State pension is unsustainable) and they would certainly opt out and take the extra money now if they could.

I'd agree that it is unlikely that the final salary benefit will still exist in 30+ years time for new accrual. It is even more unlikely that benefits earned in the meantime will not be paid, so anyone that opts to take a higher salary (10% higher?) at a loss of the final salary benefit (30% or more) is not being very sensible!


Sidicks

[sawman]

F i F said:

May I ask what happens with relocation allowances?


So is it still like this?

as an NHS worker for the last 24 years, with 5 significant location moves under my belt, I have only once received any form of relocation allowance this was in 1996 and it amounted to 6 months worth of mileage allowance for my new 60 mile each way commute, until I found a more local house. At the same time as this a pal of mine was recruited by Lotus and moved from the midlands, lotus paid for a complete house removal package - where the removers come in and pack everything for you.

I last moved about 12 months ago, and received no assistance - I looked at the policy about relocation but really it didnt amount to a huge amount and would have taken me an afternoon to apply for.

Maybe other pubic servants get a better deal

[Johnnytheboy]

speedy_thrills said:

Johnnytheboy said:

There was a cracking bit of economics from a union rep on BBC News 24 last night. To paraphrase:

"If you reduce all these peoples' salaries, where's the money going to come from to replace the spending they do that keeps the economy going?"

Now I admit he looked stupid, in the usual 'no hair or neck' union mould, but is anyone actually that stupid?

(The BBC interviewer, meanwhile, nodded sagely)

Which is exactly what happened in Greece (which reduced borrowing by 2% and GDP declined 7%), when governments reduce borrowing GDP decreases. It's not a null point that should be overlooked however the UK government needs to get it's books in order so it may be a necessary pain.

It may be shown that in a recession increasing taxation is preferable to reducing spending for maintaining GDP. However I could swing either way on that depending on what comparable data shows us in a few years.

Even if I buy that (which I don't really: Greece has faced huge tax rises too) the implication seems to be that paying public sector workers lots is a good thing, in and of itself, rather than because we need to in order to fill the posts.

I don't see an economic case for paying anyone more than necessary to get the right person for the job.

[speedy_thrills]

Short term it's a "good" thing but long term it's bad (From the perspective of maintaining productivity). Overall it would have been easier to make these decisions before we had to make them.

[sawman]

Johnnytheboy said:

I don't see an economic case for paying anyone more than necessary to get the right person for the job.

The thing is that large parts of the public servant job market is national not local. If I had to choose between doing my job in newcastle for x or doing the same job in another area for x+10% I would be seriously looking at moving.

It pretty much costs the same to live in most parts of the country apart from london (which has always attracted a london weighting allowance - although quite how an extra 1500 quid per year makes london property more affordable is a mystery to me). In fact it costs me more to live in Newcastle than it did in shropshire, by a considerable margin.

So over a period of time it would seem to me that many public servants will vote with their feet and jobs in high pay areas will be very attractive, whereas lower pay areas will have to offer incentives to get essential jobs filled.

[Mojocvh]

Well.......that's another nail in the UK.

Welsh and Scots get a pay cut........that's thousands if not millions of lost votes at the referendum...........

So its bye bye UK..........

Big picture please George..........fat chance of that.........

Still as long as the rich get richer eh..... until the SE bubble finally bursts....

[PRTVR]

Mojocvh said:

Well.......that's another nail in the UK.

Welsh and Scots get a pay cut........that's thousands if not millions of lost votes at the referendum...........

So its bye bye UK..........

Big picture please George..........fat chance of that.........

Still as long as the rich get richer eh..... until the SE bubble finally bursts....

I always wonder why people think the scots and the welsh are a special case, do they not think this will not effect areas in england, I live in the north east an I am sure it will hit us as well.

[thinfourth2]

PRTVR said:

I always wonder why people think the scots and the welsh are a special case, do they not think this will not effect areas in england, I live in the north east an I am sure it will hit us as well.

Because the scottish border is roughly 4 miles north of watford

[PRTVR]

thinfourth2 said:

PRTVR said:

I always wonder why people think the scots and the welsh are a special case, do they not think this will not effect areas in england, I live in the north east an I am sure it will hit us as well.

Because the scottish border is roughly 4 miles north of watford

but we get none of the perks, university fees, care for old folk, free prescription etc.

[F i F]

sawman said:

commented on relocation in pubic (sic) sector from one employee's perspective

Thanks, I'd be interested to hear others' experiences; in the case mentioned, both were reasonably senior people in what was then known colloquially as the DSS.

I'm not sure whether the rumoured proposals will hinder or help relocation generally. It certainly helps an economy if the workforce, in a national sense, is more able to relocate. The % of owner occupiers in the UK tends to make that more complicated than in other countries where there is a decent rented property market. I can sort of see that it will do nothing to deal with the predominant labour relocation flow towards the South-East.

Dunno really, was not attempting to point fingers, I got the best deal I could imo, because they needed the skills transported. When the subsidy ended it certainly hurt for some years, but now the mortgage is paid off.