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

I.T. Application Development Officer - North Herts Council

Essex County Council
£38000 - £44000 per annum
I.T. Application Development Officer - North Herts CouncilNorth Herts CouncilPermanent, Full Time£38,296.00 - £44,140.00 per annum (Pay award pending) England, Hertfordshire, Letchworth Garden City
Recuriter: Essex County Council

Drainage Technician

Essex County Council
£31001.0000 - £36471.0000 per annum
Please note that the job role requires you to be mobile throughout an operational area. Therefore, the post holder will need to have a driving lice England, Essex, Colchester
Recuriter: Essex County Council

Corporate Director Children and Young People’s Service

North Yorkshire Council
£136,853 to £159,178 plus relocation support
North Yorkshire is England's largest county and a beautiful, vibrant place to live and work. Northallerton, North Yorkshire
Recuriter: North Yorkshire Council

Customer Service Assistant

Essex County Council
Up to £12541.00 per annum
Customer Service AssistantPermanent, Part Time£12,541 per annumLocation
Recuriter: Essex County Council

Executive Director of Communications and Engagement

City of London
Competitive Salary
This role requires strategic vision, operational excellence, and political acumen London (City of), London (Greater)
Recuriter: City of London
Linkedin Banner