UK considering location-based public sector payrises

Chancellor Philip Hammond has asked officials to look at the case for linking pay awards to the cost of living as he tries to balance demands for higher pay against the need to keep public spending under control – via Daily Mail, Reuters

Public sector workers could have pay rises linked to where they live, under plans being examined by the Treasury.

Chancellor Philip Hammond has asked officials to look at the case for linking pay awards to the cost of living as he tries to balance demands for higher pay against the need to keep public spending under control.

The move could see public sector workers in areas such as the North East offered lower pay increases than those living in more costly areas like the South West.

Ministers acknowledge that any proposal for regional pay rises will be resisted by the big public sector unions, which are fiercely protective of the idea of national pay structures.

A remarkable parallel with our own problems where regional pressures in Auckland and Queenstown make life more expensive for a nurse or police officer.   In Auckland, a steady exodus of teachers to the regions has left it seriously short of staff.

And yet, the unions are the ones that caused this problem.  National awards are evil for many reasons, but this is the more obvious and current example.

But a senior government source said there was a compelling case for looking at the idea again.

The source said: ‘In some parts of the country public sector pay is very competitive, in others it is less so.

‘If you talk to private businesses in the North East they will tell you they find it hard to compete with the pay on offer in the public sector.

‘But in other parts of the country the gap is much smaller, and there are some genuine hotspots where recruitment and retention is a problem.’

There are relatively easy solutions to this.  But it requires government to put more money into the public sector, and it needs unions to allow it.

Instead, National is talking about looking for immigrants to fill the gaps.  That is, immigrants willing to work in the expensive-to-live parts of New Zealand and yet do not get a cent more than equivalent staff in the regions.

It’s all the government can do, really.  The unions are in the way.

 

Daily Mail


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