Here’s a stat that’s unlikely to improve your post-Christmas mood, if you don’t work for the Government: according to the Sunday Times, public sector workers earn on average 7% more than their private sector peers, up from 3% last year. And the government doesn’t even seem to be getting its money’s worth: despite enjoying bigger pay rises and working fewer hours, productivity levels among civil servants have actually fallen since Labour came to power in 1997. But with even Gordon Brown now denouncing this ‘culture of excess’ (albeit rather hypocritically, since it’s largely his fault), we suspect the public sector’s salad days may come to an abrupt end after this year’s election…
Thus far public sector workers have managed to avoid the worst of the UK’s recessionary pain. The private sector has borne the brunt of the redundancies and seen wages rise a measly 1.1%, compared with 2.8% in the public sector; the average civil servant earned £22,405 last year, while the average private sector worker took home £20,988. And that’s not all: public sector employees work fewer hours (35 versus 37.5 in the private sector), enjoy three or four more days’ holiday a year, and receive a more generous pension. Nice work if you can get it.
Unfortunately (and rather embarrassingly for Labour, which has increased the number of public sector workers since it came to power by almost 1m) this increase in pay and perks hasn’t translated into improved productivity. In the past ten years, public sector productivity has actually shrunk by 3.4%, compared with a rise of 28% in the private sector over the same period. That’s a pretty big gap. And the PM can hardly blame anyone else for the pay boom; he was the one who signed off on higher civil service salaries back in 2002, when he was Chancellor.
With a May general election looking increasingly likely, the two main parties stepped up their election campaigns today - the Tories focused on health, while Labour concentrated on education (and bashing the Tories). But whoever wins, the public sector clearly needs to start sharing the pain. In the recent Pre-Budget Report, the Government capped basic pay increases at 1% across the public sector in 2011-12 and 2012-2013, which will save an estimated £3.4bn by April 2013. That’s a start – but it won’t be enough...
In today's bulletin:
Britain's Top 100 Entrepreneurs 2010: Petrofac's Ayman Asfari rises to the top
Nestle linked with Cadbury amid rumours of higher Kraft bid
'Puerile' Ryanair starts 2010 as it means to go on
Civil servants earn 7% more than private sector workers
The MT Prize Quiz 2009: 12 months, 12 questions