Govt ‘misleading workers on end to public sector pay cap’

06 March 2018

The government has been accused of misleading workers on the end of its pay cap policy for public sector staff after analysis showed that many departments don’t even have the budget to meet the 1% limit on raises implemented as an austerity measure.

A new report from Class think tank has revealed that the Chancellor’s 2017 budget will create real-term pay cuts until 2020, despite the fact the government promised in September last year that it will bring the wage cap to an end.

The Department for Transport’s (DfT) resource department expenditure limit (RDEL) is projected to fall short of that which is needed to meet even a 1% pay rise in 2019/20 by 18.5%. The Department for Work and Pensions (DWP) will be 15.9% short, the HMRC 14%, and the Ministry of Justice (MoJ) 11%.

Under the RDELs provided in the Budget, a much-needed 5% increase is unaffordable, with the a shortfall of 22.2% for the DfT, 20.1% for the DWP, 20.5% for HMRC and 14.8% for the MoJ.

Dr Faiza Shaheen, Director of Class, said: “The Conservatives are attempting to hoodwink the public into believing that the public sector pay cap is over while knowing full-well that it isn’t. In doing so they are playing with the livelihoods of five million public sector workers, some of whom are being pushed into poverty and using food banks.”

Indeed, figures released last week showed that the number of public sector workers forced to rely on charitable financial hardship grants has surged by over 100% in the last seven years.

PCS, which commissioned the report, noted that public sector workers are now an average of £4,400 worse off in real terms and that local economies have been deprived of nearly £1.7 billion as a result of pay freezes.

“Our analysis shows what Philip Hammond knows – lifting the public sector pay cap either means further job losses or cutting public services – an impossible and unfair choice. The ideological experiment of austerity has resulted in widespread hardship, a flagging economy and, ironically, missed deficit reduction targets. Increasing public sector pay will boost the economy and bring a welcome end to this madness,” Dr Shaheen added.

PCS will be holding a rally this evening from 6 until 8pm in Committee Room 12 of the House of Commons, at which the union’s General Secreaty Mark Serwotka and Shadow Chancellor John McDonnell will support a pay rise for public sector workers.

The union is also calling for a return to a national pay bargaining structure for civil service pay, after collective bargaining was delegated to individual government departments, weakening workers’ ability to negotiate for decent pay and conditions.