William Eichler 18 July 2023

Public sector pay increases do not add to inflation, think tank says

Public sector pay increases do not add to inflation, think tank says image
Image: Dilok Klaisataporn / Shutterstock.com.

Increasing pay for public sector workers by 10% would not add much to inflation, according to a new report by the think tank IPPR.

A 10.5% pay boost to restore real pay to 2019/20 levels would add at most 0.14 percentage points to inflation if funded by borrowing, the report said.

It also revealed that if an average public sector worker were to receive a pay award of around the 6% announced last week they would still be £1,400 worse off this year on average than just before the pandemic, because wages have not kept up with prices.

IPPR said that the decline in real-terms pay since 2010 had hit the living standards of public sector workers, and had also contributed to the recruitment and retention crisis that is undermining the quality of public services.

IPPR is calling for a 10.5% average uplift this year to restore public sector pay to 2019/20 levels, at an additional cost of £7.2bn beyond last week’s pay offers.

Joseph Evans, researcher at IPPR and one of the report’s authors, said: ‘It’s wrong to claim that giving the public sector a more meaningful pay rise will further embed inflation. Research shows that there is very little inflationary impact from a significant pay rise, but that the need to stop the fall in living standards for public sector workers is urgent.

‘Without an inflation-matching pay rise the public sector will continue to face a triple crisis of falling living standards, a recruitment emergency and declining quality of public services.’

SIGN UP
For your free daily news bulletin
Highways jobs

Part Time Deputyship Finance Assistant

Essex County Council
£25959.00 - £27613.00 per annum + Pro Rata
Part Time Deputyship Finance AssistantFixed Term, Part Time£25,959 to £27,613 Per Annum, Full Time EquivalentLocation
Recuriter: Essex County Council

Financial Assessment Officer

London Borough of Richmond upon Thames and London Borough of Wandsworth
£31,515 - £47,067
Financial Assessment Officer
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Family Help Lead

Gloucestershire County Council
£33,143 - £40,777 per annum
We have an exciting opportunity for you to join Gloucestershire Children's Services Gloucestershire
Recuriter: Gloucestershire County Council

Community Social Worker

Gloucestershire County Council
£40,444 - £48,738 per annum
We are currently recruiting for a Community Social Worker to join our team based in the Forest of Dean on a permanent basis. Gloucestershire
Recuriter: Gloucestershire County Council

Debt Recovery Officer

London Borough of Richmond upon Thames and London Borough of Wandsworth
£33,927- £47,067
Debt Recovery Officer<... Wandsworth, London
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth
Linkedin Banner