Dominic Browne 08 September 2011

Figures show rise in public sector take home pay

Take home pay in the public sector has increased, showing annual growth of 1.7% for the three months to August, according to this month's VocaLink FTSE 350 Take Home Pay Index.

This contrasts with the private sector, where pay growth has declined for the second consecutive month, hitting 2.7% in August, down from 2.9% for the three months to July, as measured by the VocaLink FTSE 350 Take Home Pay Index. .

A key reason for public sector pay increasing could be annual pay increments related to length of service, as research from the Hay Group shows only 21% of public sector organisations have plans to freeze such increases.

Mark Thompson of Hay Group suggests the public sector should 'make the pay system more flexible and performance related.'

Mr Thompson said: 'Pay for results should be encouraged, but over a quarter of public sector organisations (are) freezing these payments or actively considering doing so. Public sector leaders must think again.'

Douglas McWilliams, chief executive of economics consultancy Cebr, said the figures corroborate other recent economic indicators such as the Purchasing Managers Index .

'With further public sector job losses over the coming years and a tough trading environment for many private sector businesses, labour market conditions are not expected to improve significantly in the short-term, making only modest annual increases in gross income likely,' Mr McWilliams said.

comments powered by Disqus
Sign Up