New research shows public sector still better off than private sector

September 11, 2017 12:01 AM

Reports suggest that the government is considering lifting the 1 per cent public sector pay cap. But new research released today by the TaxPayers' Alliance shows that on average, public sector workers are still 10 per cent better off than those in the private sector.

Nobody disagrees with paying skilled public sector workers well for doing excellent jobs, often in difficult circumstances. But it is important to recognise that the salaries and pensions of those in taxpayer-funded positions are on average more generous than the private sector. Those in the public sector also work shorter hours and take more sick leave than their private sector counterparts.

What's more, strikes and labour disputes are consistently more prevalent in the public sector. Since 2013, there were on average 15 working days lost per 1,000 workers due to labour disputes in the public sector, compared to just 0.8 in the private sector, a difference of 14.3 days – almost 18 times higher.

The public sector pay cap needn't exist if we ended the process of setting national wages from Whitehall. Centralised pay bargaining means we swing between largesse in the good times and restraint in the bad. Instead, decisions on public sector pay should be taken locally to reflect living costs in that area. The same happens with private sector businesses and there's no reason the public sector should be any different.

Key findings from this research:
  • Average median gross annual pay in 2016 was £25,002 in the public sector, compared to £22,500 in the private sector, 11.1 per cent higher.
  • Hourly median gross pay in 2016 was £14.77 in the public sector and £11.1 in the private sector, 32.6 per cent higher.
  • Full-time public sector employees work on average 35 hours a week, in contrast to the private sector where an average full time employee will work 37.5 hours a week.
  • According to the NHS Pay Review Body, ‘54 per cent of NHS staff in England were due to receive pay increments of around 3 to 4 per cent on average in 2016-17 in addition to the 1 per cent pay award.’
  • In 2016, the sickness absence rate for the public sector was 2.9 per cent compared to 1.7 per cent in the private sector. The rate is calculated by dividing the total number of working hours lost by the total number of hours worked.
  • Since 2013, the average number of working days lost due to labour disputes (per 1,000 workers) in the public sector was 15.1 days, while in the private sector it was just 0.80 – 14.3 days less.
 
John O'Connell, Chief Executive at the TaxPayers' Alliance, said:

"Taxpayers are grateful to the people who risk their lives to keep the public safe, teach our children and look after us when we are sick. Those who manage tough jobs well deserve good pay, but it's vital that any debate about the public sector pay cap takes into account other things like pensions.  The public finances are still in the red, so it's not right to borrow even more money and force our children and grandchildren to pay for things we want today. 

"As long as public sector pay rates are set nationally, public sector workers will be relatively underpaid in some areas and relatively overpaid in others. That means many teachers and nurses are struggling to make ends meet, so the government must urgently decentralise pay bargaining to better reflect living costs and save taxpayers' money.

"Let's not forget that the biggest cost of living is tax. The government could give everyone, in all sectors, a timely break by cutting taxes and allow people to keep more of the money they earned so that they can provide for their family and save for a rainy day."

 
TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)

Media contacts

Chloe Westley
Campaign Manager
TaxPayers' Alliance
chloe.westley@taxpayersalliance.com
24-hour media hotline: 07795 084 113 (no texts)

Notes to editors

1. Founded in 2004 by Matthew Elliott and Andrew Allum, and now with 80,000 supporters, the TaxPayers’ Alliance (TPA) fights to reform taxes, reduce spending and protect taxpayers. Find out more about the TaxPayers' Alliance at www.taxpayersalliance.com

2. TaxPayers' Alliance research on nurses' pay relative to NHS bosses' was featured in the Times last week: https://www.thetimes.co.uk/edition/news/nurses-left-behind-as-pay-of-nhs-bosses-soars-gxpft20fs (£)

3. We have also debated the issue of the pay cap on Sky News and other media: https://www.youtube.com/watch?v=arAgTUWIflQ&t=1s