Public servants to suffer wage hit running into tens of thousands after decade long 'pay pinch'
Brexit-fuelled inflation deepens pay crisis for teaching assistants, refuse collectors, and midwives as union demands end to worst salary squeeze since Thatcher.
A major new report published today by GMB, the union for public servants, reveals that following a Government cap on their wages, full-time public sector workers now face a real terms pay cut totalling an average of £4,073 by 2020, of which £1,426 can be attributed to the additional inflation triggered by Brexit.
The report, 'End the Public Sector Pay Pinch' comes as GMB launches a campaign to end the Government's ongoing decade long salary squeeze, which has already seen public sector salaries lose around a tenth of their value over the last seven years of pay restrictions.
New independent House of Commons Library research obtained by GMB on pay policy since 1979 confirms that the Government's pay restraint policy is even more severe than those imposed under Margaret Thatcher and John Major.
Those set to be hardest hit over a decade of real terms pay cuts between 2010 and 2020 include social workers (-£12,987), homelessness prevention officers (-£15,990), staff nurses (-£18,360) and midwives (-£22,702).
It comes as a Survation poll, commissioned by GMB reveals 3 in 4 adults (75%) would support an above inflation increase in public sector wages this year.
GMB modelling shows the Government could either reverse its decision to cut corporation tax or take advantage of better than expected public borrowing figures to fully fund an end to the squeeze on public sector pay.
The union's analysis reveals that without a change in policy workers can expect average real terms pay cuts, some running into tens of thousands of pounds:
- Teaching assistant: lost £6,531 since 2010 and set to lose £2,337 by 2020 (total loss 2010-20: £8,868)
- Refuse collector: lost £6,659 since 2010 and set to lose a further £2,383 by 2020 (total loss 2010-20: £9,042)
- Hospital porter: lost £7,285 since 2010 and set to lose a further £2,394 by 2020 (total loss 2010-20: £9,679)
- 999 call handler: lost £8,646 since 2010 and set to lose a further £2,617 by 2020 (total loss 2010-20: £11,263)
- Qualified residential care worker: lost £8,624 since 2010 and is set to lose a further £3,085 by 2020 (total loss 2010-20: £11,709)
- Social worker: lost £9,565 since 2010 and is set to lose a further £3,422 by 2020 (total loss 2010-20: £12,987)
- Homelessness prevention officer: lost £11,114 since 2010 and is set to lose a further £3,976 by 2020 (total loss 2010-20: £15,090)
- Staff nurse: lost £14,572 since 2010 and is set to lose a further £3,788 by 2020 (total loss 2010-20: £18,360)
- Midwife: lost £18,011 since 2010 and is set to lose a further £4,691 by 2020 (total loss 2010-20: £22,702)
Wage increases for people working in public services have been kept below inflation every year since 2010. The Government has previously said it intends to pursue this policy until 2020. In the 2015 Budget Statement, then Chancellor George Osborne confirmed the Government would fund public sector workforces for a pay award of 1% for 4 years from 2016-17 following a policy of "firm restraint" during the 2010-15 Parliament [2].
The public sector pay cap was introduced on the assumption that inflation would remain relatively low - although, in fact, it quickly hit a high of around five per cent during 2011/12. The additional inflation triggered by Brexit looks set to increase the squeeze on public sector workers’ living standards and compound the wider recruitment and retention problems in the sector.
Using a summary of the Treasury’s public sector pay policy approach obtained through the Freedom of Information Act, and factoring in recently updated UK economic growth forecasts, GMB calculates that the Government's originally anticipated £12 billion savings from the pay policy should be revised to £8.5 billion.
This is equivalent to the forecast revenue loss that will be incurred by forthcoming cuts to corporation tax rates.
GMB said the Government could fund an end to the pay cap by reversing this decision to slash corporation tax rates, or by making use of better than anticipated public borrowing figures, which are £12 billion lower than expected for the 2017 Budget according to the Office of Budget Responsibility (OBR).
Rehana Azam, GMB National Secretary said:
“The gruelling salary squeeze Theresa May is presiding over is even more severe than under Thatcher and Major, with many workers set to effectively lose tens of thousands of pounds by 2020."
"It's high time for public sector workers to be paid their dues – this decade long pay pinch needs to end.”
“Public servants perform a vital role in our society - we would be utterly lost without them. It’s the nurses, teaching assistants, midwives, council staff and 999 call handlers who are on the front line every single day but who have had thousands of pounds pinched already and are facing further attacks on their living standards.”
"Lifting the pay cap would be practical and affordable if the Government stopped lining corporations' pockets with tax giveaways and instead shared the proceeds of growth with the dedicated frontline public service workers who are seeing their wages disappear."
