PUBLIC SECTOR
CIPD calls for clampdown on public sector pay
While the government is right not to cut public sector jobs at this point in the economic cycle, ministers should take a “much tighter grip on public sector pay”. That’s the view of John Philpott, chief economist at the Chartered Institute of Personnel and Development.
Whereas previous UK recessions have often been characterised by a regional “north-south divide”, Dr Philpott reckons the most noticeable feature of the current recession is the “public sector-private sector divide”.
The public sector is at present an entirely “recession free zone”. While private sector employers are shedding hundreds of thousands of jobs and freezing or cutting the pay of millions of employees, their "public sector counterparts are mostly maintaining staffing levels and presiding over relatively generous pay increases".
Dr Philpott said: “As unemployment passes the two million mark, on its way to at least three million, there is a strong case for preserving or increasing public sector employment. The public sector needs additional resources at this time to cope with the various social consequences of the recession, and it would anyway be a false economy for government to make public sector staff redundant and then have to pay them welfare benefits. There may in due course be a need to trim the public sector workforce, but for the time being this makes no sense.”
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He added: “What the government could and should do, however, is put a clamp on public sector pay rises. With the private sector in dire straits, and inflation for now giving way to deflation, there is no labour market necessity or strong economic justification for public sector earnings to rise faster than private sector earnings.”
A final word
“Cash strapped private businesses are asking staff to make sacrifices to save jobs. The government and public sector employers should do likewise, redirecting savings on wage bills to help combat the rising toll of unemployment. Public sector employees have a vital role to play in dealing with the consequences of recession. But part of that role is sharing the burden of pain, which at the moment is being borne solely by their private sector counterparts.” - John Philpott, chief economist at the Chartered Institute of Personnel and Development.
Want to know more?
The Chartered Institute of Personnel and Development (CIPD) has over 133,000 members and is the “leading professional institute for those involved in the management and development of people”. To find out more visit www.cipd.co.uk.