Robert Watts
Public sector workers earn 7% more on average than their peers in the private sector — a pay gulf that has more than doubled since the recession began.
Official figures show that staff employed by the state are enjoying bigger pay rises, working fewer hours and receiving pensions worth up to three times as much as those in the private sector.
Civil servants, National Health Service staff, council officials and other public sector workers have enjoyed a “golden age” under Labour, according to an investigation by The Sunday Times.
The analysis was validated by Straight Statistics, a group that campaigns for the accurate reporting of official data.
Since Labour came to power in 1997, the number of public sector workers has increased by 914,000 to more than 6m, just over a fifth of the workforce.
Figures published by the Office for National Statistics (ONS) show that average annual earnings of public sector workers rose to £22,405 last year — compared with £20,988 paid to the average private sector worker.
The lead of the typical state employee stands at 7%, compared with 3% the year before. Until 2005, private sector workers received more on this measure and as recently as 2002 enjoyed a 5% lead. “However you look at it, public sector workers have done better than most in the private sector over the past decade — and the gap is widening,” said Nigel Hawkes, director of Straight Statistics.
Official figures show that public sector wages are rising at 2.8%, compared with 1.1% in the private sector.
By a whole range of measures, public sector employees are also enjoying better working conditions. Last year the average public sector worker laboured for 35 hours a week — a fall of an hour on the previous year and 2Å hours less than the typical private sector worker. The average state employee also enjoys three or four more days of holiday a year.
This has come despite a decline in productivity. According to the ONS, public sector productivity fell by 3.4% in the 10 years from 1997 — compared with a rise of 28% in the private sector over the same period.
“It is ridiculous that pay and perks have risen when public sector productivity has fallen. This gravy train now has to come to an end,” said Graeme Leach, chief economist and director of policy at the Institute of Directors.
One of the starkest gaps between the public and private sector is in pension provision.
Most civil servants receive employer pension contributions worth 19.4% of their salary paid into their final salary pension scheme each year. This is more than three times the average of 6% paid by private sector firms into their employees’ less generous defined-contribution schemes last year.
Most private sector workers have to work until they are 65 to claim their company pensions; the average public sector retirement age is 58. This average masks lower retirement ages in some areas. Council workers in Glasgow and Falkirk retire at 56, on average, and many police officers have been able to claim their pension shortly after their 50th birthday, although the terms have been tightened for new members.
Not only are public sector workers better rewarded, but they also take more time off work through illness. According to the Chartered Institute of Personnel and Development, state workers average 9.7 days of sick leave a year, compared with 6.4 days in the private sector.
The generous pay and perks offered by state employers is encouraging more graduates to favour working in the public sector. Nearly 39% of public sector workers are now graduates, up from 25% in 1998. Only 20% of private sector workers have a degree, a rise of 5% since 1998.
David Frost, director-general of the British Chambers of Commerce, said the days when public sector workers received lower salaries in return for better pensions and more job security were “long gone”.
“Right across the spectrum of pay and conditions the public sector is now outstripping the private sector,” he said.
“Small and medium-sized businesses — the firms who will be vital for the economy’s recovery — lose staff to the public sector because they cannot compete with the pay and benefits big state employers offer”.
Despite the sharpest downturn in living memory, the British state’s recruitment drive has continued with 300,000 civil servants, administrators, social workers and other officials hired since the collapse of the Northern Rock bank in September 2007. In the past two years alone the NHS’s headcount has risen by 107,000.
There were job losses in the public sector last year, but not on the scale of the profit-making private sector where more than 700,000 people lost their jobs in the first three quarters of last year. About 44,000 state workers were made redundant during the same period — but despite these losses, the public sector’s total job count still increased by another 47,000.
A spokesman for the Treasury said the government’s pay policies reflected the need to recruit and retain staff, but still delivered value for the taxpayer.
He said the higher average pay of public sector workers was partly due to the fact that many cleaning jobs and other low-paid public sector work had been outsourced to the private sector.
“In the pre-budget report the government announced it would seek to cap basic pay uplifts at 1% across the public sector in 2011-12 and 2012-13,” the spokesman said. “This will save £3.4 billion by April 2013”.
Times Online
