Local Pay, Local Growth: Reforming pay setting in the public sector

Local Pay, Local Growth Policy Exchange Reforming pay setting in the public sector Setting pay levels on a national basis (known as national pay bargaining) means that workers are paid the same amount regardless of where they live. This is unfair to public sector workers in high-cost areas whose living standards are worse because their pay cannot be increased above the national rate. It also damages vital public services as local schools and hospitals struggle to recruit and retain the right staff in high cost areas. Recent academic studies have shown that this can lead to a drop in educational attainment in schools and a rise in deaths in hospitals. Ending national pay bargaining and rebalancing the pay and pensions of public sector workers so that they are in line with that of equivalent workers in the private sector in their local area would save £6.3 billion a year in public spending. This money would be better spent on tackling local unemployment and could create at least 288,000 private sector jobs – or the equivalent salaries of 332,000 more nurses or 252,000 more teachers. Money saved in each region is the equivalent of: 1 =2,500 teachers* MIIIMIIIIMIITIII Midlands MMMIMMMtt North West Jobs created* 58,000 Yorkshire and Humberside Wales MM M Scotland South West 6,000 M North East N/A M11 Northern Ireland * East of England **salary only Local pay, local growth Policy Exchange *at Regional Growth Fund costs Reforming pay setting in the public sector Ed Holmes & Matthew Oakley Read the full report at http://bit.ly/pxlocalpay