Public sector pay: behind the headlines

The Belfast Telegraph has been looking at Civil Service pay again.

Behind the headline of a 3% increase in average Civil Service pay between 2013 and 2014 lie a few more facts.

The first one is that almost uniquely in the public sector, the Northern Ireland Civil Service treats the annual increment paid to all staff who have not reached the top of their payscale as part of the payrise.  In the police, for example, you would move up the payscale on the anniversary of joining the police or getting promoted, which on its own could be an increase of several percent, and then on a fixed date every year the payscales get increased.  That increase in the payscales is the one that hits the headlines, and by that measure the Northern Ireland Civil Service actually only increased payscales by just over 1% in 2013, and we know they are not giving any increase in 2014.

Some payscales were rejigged with higher increases in 2012, because equal pay settlements (made because different people were getting paid more for doing work of equal value and ranking) had caused some more junior staff to be paid more than their line managers.  Equal Pay actually accounts for quite a bit of the recent increases of Civil Service pay over private sector pay, as well as differentials with GB Civil Service staff.

Tables 1 and 2 of the NISRA report are the key ones which interests us.  The first note is the grade structure of the civil service:

 

Grade	Number of staff
Industrial	1046
Administrative Assistant	1624
Administrative Officer	7819
Executive Officer 2	4479
Excutive Officer 1	3561
Staff Officer	3355
Deputy Principal	2584
Grade 7	1293
Grade 6	265
Grade 5 and above	246
Others	1734

I would be lying if I said I wasn’t surprised by the number of staff in the higher grades, even though I know that includes professionals such as medical officers, accountants, computer programmers etc, whose skills come at a price.  It does however explain why the median wage is as high as £24,728, which is in the EO2 band.

The actual average (mean) wage is higher again at £27,860 according to table 2.  This tends to be the reality despite the number of staff in lower paid grades – proposals for voluntary redundancy schemes will make this worse, because as well as Mick’s note on maintaining the bureaucracy (something which I don’t think is entirely fair from experience) it always tends to be lower grades who leave, higher paid staff remaining.  This has been severely impacted over the last 10-15 years as cleaners, canteen staff and now some messengers and security staff have been outsourced to the private sector, which reduces the pay bill and the headcount, but also pushes up the average wage as these staff are inevitably low paid.

The short version is that to understand the disparity between public and private sector pay requires the reader to understand the pressures far beyond the trade union movement (who are furious about DFP imposing the 2014 pay “settlement” rather than negotiating) in terms of legal obligations which have pushed public sector wages up and with reference to privatisation of low paid jobs, but also the one I haven’t mentioned: to listen to the CBI you would think that the public sector is badly overpaid.

In my experience, this isn’t fair.  There are many businesses who couldn’t absorb higher wages for their staff, but should we not be concerned that other companies which could well afford to pay higher wages aren’t prepared to compete for staff in the public sector, because they’re more interested in making money and limiting pay bills than “rebalancing” the economy?  Have they noticed that cutting wages leads to less income for them?