Partner Article

50% of Public Sector see pay freeze

Over half of all pay awards in the public sector have resulted in no increase for staff according to results from the April pay bargaining round.

55.2% of pay reviews resulted in a pay freeze, in contrast to the private sector where only 15% of companies saw a pay freeze.

April is the busiest month of the year for pay settlements, with around four in 10 pay awards settled in this month. Across the economy as a whole, the median basic pay award in the three months to the end of April 2012 stood at 2%, down 0.6 percentage points from 2.6% in the previous quarter.

XpertHR Pay and Benefits editor Sheila Attwood said: “In contrast to the pay scene in the public sector, pay awards in the private sector are holding up, at around 2.5%.

“Within this, manufacturing awards – at 2.5% - are outpacing those in private sector services– at 2%.

Despite this however, there is evidence of some higher increases being awarded, as 3 in 10 private sector pay awards were found to be worth 3% or more, while the most common pay award in the private sector is 3%.

The figures highlight the continuing gap between pay awards and retail prices index (RPI) inflation. Figures released on 22 May revealed that RPI fell just 0.1 percentage point to 3.5% in April. Whole economy pay awards are now 1.5 percentage points below inflation – the biggest gap this year.

She added: “We expect the current pattern of pay awards to continue over the coming months – in which case the squeeze on real incomes will continue for some time to come.”

The findings are based on details of 175 pay awards effective between 1 February and 30 April 2012, covering almost four million employees.

This was posted in Bdaily's Members' News section by Ruth Mitchell .