It is time to scrap the cap on public sector pay.
It’s time to do it because our public sector staff deserve it, because our public sector services cannot survive without it, and because we cannot afford not to.
According to the Royal College of Nursing, nurses have had a 14% pay cut in real terms since 2010. The IPPR calculate that workers in the NHS have experienced a seven-year pay squeeze, with a two year pay freeze from 2011/12, followed by pay capped at 1 per cent for the following five years. This has significantly eroded the value of pay in the NHS; pay for a band 5 nurse is £3,214 or 10.1 per cent lower today than pay for the same role in 2010/11.
Up to a third of workers in some NHS trusts have quit in the past year. The number of full-time nurses and health visitors in England dropped by 469 between April 2016 and April 2017, according to a Health Foundation report. Staff retention is a huge issue with the leaver rate varying from under 10% in some trusts to more than 30% in some acute and mental trusts.
In May, the Royal College of Nursing got Freedom of Information responses showing one in nine posts are now unfilled – and about 40,000 nursing posts were vacant in England.
Frontline police officers are £6,000 a year worse off in real terms compared to 2010. In May the Argus reported Matt Webb, chairman of the Sussex Police Federation, saying it has helped several officers so far this year after they found their wages left them struggling to put food on the table.
The average rent for a one bedroom property in Brighton and Hove is currently £957 per calendar month, leaving officers just £463 to cover other household bills, food and fuel costs. A three bed house will set renters back £1,630 a month, or £19,560 for the year – £440 short of the average officer’s annual wage.
The former head of the armed services, writing in the Telegraph, said that soldiers deserve a pay rise. The starting salary of an army private has dropped by £1,000 in real terms since 2010, whilst rising rents in service accommodation and changes to tax credits have hit service personnel hard. We now have a real crisis in recruitment and retention across all three services.
A firefighter today is earning £2000 less in real terms than they were in 2010. A midwife has seen their pay cut in real terms by £3000. During this time the cost of living has risen 22%.
Ministers need to raise public sector pay to help retain skilled staff, the Institute for Fiscal Studies economic research group has said, especially in the south-east where living costs are highest. It says that more restraint “would take public pay to historically low levels relative to that in the private sector”, it says. Average weekly public sector pay has fallen by 4% in real terms in the past eight years, and “higher paid groups have fared least well.”
A modest pay rise is not unaffordable. If public sector workers saw their earnings rise by inflation over the next five years, it would add just 1% to annual departmental spending. And it would pay for itself through a local economic boost – not least in the UK’s poorest regions – and through a higher tax take.
Recent research by the GMB shows that while the government said that the pay cap would save £2.2bn this year, the bill for agency and temporary workers has risen by £2.5bn across the public sector.
Last year, a study found there had been a 61% rise in advertising spend since 2010 in secondary schools alone, costing £56m in 2015. Shortages in the health service mean NHS Trusts are paying millions every month to agency and bank nurses to ensure there are adequate levels of staff on wards.
An Age UK study estimated the NHS lost 2.4m bed days, costing it £669m over five years, as shortages of social care support means frail patients cannot be discharged.
According to a Unison study based on International Monetary Fund figures, every 1% increase in public sector pay would generate between £710m and £820m for the government in increased income tax.
The Institute for Fiscal Studies has said if public sector pay were to rise in line with inflation for the next three or four years it would cost the public purse £6 to £7 billion more than continuing with the cap.
The public sector pay cap is having a disastrous impact across the board in our public sector; schools, the NHS, our armed forces, social care, local government, the civil service, police, fire and more. Our economy is suffering because these public sector staff cannot spend in the economy, our nation is suffering because we are missing out on tax revenue, our services are suffering because they cannot pay the rates they need to attract new staff.
We need to scrap the cap, we can afford it, we cannot afford not to.
(Speech to full Council proposing the motion “Fair Pay For Public Sector Staff” 2/11/2017)