Concerns mount over public sector pay freeze in spending review

Concerns are mounting over a potential public sector pay freeze as part of the government response to the coronavirus economic crisis set to be presented in the Chancellor’s spending review on Wednesday.

Right-wing think tank Centre for Policy Studies has argued in newly published research that a three-year pay freeze could save £23bn. Trade union Unite has slammed the suggestion as “insulting” to public sector workers.

Update, 8.30am: It has been reported that Rishi Sunak will bring in a public sector pay freeze, from which NHS workers including doctors and nurses will be exempt. The CPS has estimated that this could save £15.3bn over three years.

Unite assistant general secretary Gail Cartmail highlighted the sacrifice made by public sector employees throughout the pandemic, saying that they have “kept the NHS running, the schools open and refuse being collected”.

She said: “These are the very same workers who have had their pay held down in real terms during a decade of Tory austerity. It should not be forgotten that more than an estimated 600 NHS and social care workers, often on low pay, have died from causes linked to Covid-19.”

The CPS think thank report argues that private sector workers have suffered far more than those in the public sector, with businesses cutting hours, wages and jobs, and that a 1% pay rise cap could save the government £11.6bn.

Warning that the think tank is being used as an “outrider to pave the way” for Rishi Sunak, Cartmail added: “The CPS’ analysis is insulting to those public sector workers that have underpinned the fabric of society during this continuing pandemic.

“If Boris Johnson’s much-vaunted ‘levelling up’ agenda means anything, he should be telling Rishi Sunak to loosen the purse strings on public sector pay for those workers, many of whom have lost up to £3,000-a-year in real terms during the austerity decade.”

The concerns raised by Unite follow Treasury documents leaked in May this year that provided the Chancellor with a “blueprint” to pay for the crisis – including a pay freeze for public sector employees and raised taxes.

Earlier this year, thousands of NHS workers protested across the UK calling for fair pay for NHS staff and true recognition of their work during the pandemic after the government announced a pay rise for doctors in July.

The Chancellor had announced a pay increase of up to 3.1% for public sector workers including doctors, teachers and police officers – but social care workers, nurses and others were left out of the new offer.

Labour warned at the time that the pay rise for some public sector workers earlier in the year “won’t make up for a decade of real-term pay cuts”, with wages still left below 2010 levels once inflation is accounted for.

The opposition party has pushed the Conservative administration to rule out a public sector wage freeze to pay for the Covid crisis, but government ministers have refused to commit to maintaining their pay.

Shadow health minister Justin Madders this week said: “The NHS will only survive the winter if its workforce are valued and supported. The evidence from the British Medical Association to the health and social care committee this morning was stark.”

The BMA chairman had told the committee that health staff were not prepared to see “so much illness and death” as the pandemic struck, and that many were experiencing high levels of stress and anxiety before the health crisis.

Madders added: “Does the minister understand how demoralising it is for staff to hear reports that they may face yet another two-year pay freeze? I asked those on the government benches to rule this out last week.”

A survey by the Royal College of Nursing showed that 36% of NHS nurses were considering leaving, compared to 28% before the pandemic and a committee report in September showed there were 40,000 unfilled nursing vacancies.

14 health unions including Unite urged the Prime Minister to award NHS staff with an early pay rise ahead of Christmas to ensure that health workers “feel valued by the entire country, and the government too” earlier this month.

Unite pointed out today that while the Tories have rejected a pay rise for the public sector, a recent National Audit Office report found that almost half of the £18bn spent on Covid contracts were awarded without a competitive tendering process.

This followed reports earlier in the week, involving a company in a US court case, that the government paid a businessman £21m to act as a ‘go-between’ to secure personal protective equipment for the NHS during the pandemic.