Both the government and the opposition have indicated that a large part of the savings needed to recover the UK’s public spending deficit will need to come from pay restraint.
The Treasury’s evidence to the public sector pay review, leaked on Monday, shows that chancellor Alistair Darling is seeking to freeze the pay of senior public sector staff including NHS managers and GPs from April next year.
I want to be straight with you. A pay freeze of the scale I am talking about is the equivalent of saving 100,000 public sector jobs
Pay rises for hospital doctors, dentists and other civil servants should be between 0 and 1 per cent, the evidence adds.
However, the Treasury has not called for next year’s third and final year of the three year pay settlements affecting Agenda for Change staff grades to be looked at again.
Central Manchester University Hospitals Foundation Trust has already pre-empted the Treasury on senior staff and agreed last month to freeze board member pay from April 2010.
Additionally, NHS Employers director of pay, pensions and employment relations Gill Bellord said her organisation had recommended there “should not be a pay increase” for managers in its evidence.
“We support pay restraint for senior staff,” she said.
But Managers in Partnership chief executive Jon Restell was opposed to such moves. He said the organisation’s own evidence to the pay review body argued that managers should receive the same 2.25 per cent pay rise as nurses from April 2010.
The leaked details of the letter between the Treasury and the pay review body came on the eve of shadow chancellor George Osborne’s speech to the Conservative Party conference in Manchester.
Mr Osborne said the freeze - which would affect around 750,000, or a third of the public sector workforce - did not go far enough.
He said that “whoever wins” the next election would need to ask the rest of the public sector workforce to also take a one year pay freeze from 2011.
He said that freeze should apply to all staff earning over £18,000, apart from those “risking their lives” in Afghanistan.
In a message directed to public sector staff, Mr Osborne said: “I want to be straight with you. A pay freeze of the scale I am talking about is the equivalent of saving 100,000 public sector jobs.”
He said similar “trade-offs” had already been made in the private sector.
If implemented, Mr Osborne’s pay freeze would save around £1bn in the health service, assuming pay would otherwise increase at a rate of around 2.5 per cent.
The pay research group Income Data Services said private sector pay rises from April were likely to average between 2.5 and 3 per cent.
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