Local economies will suffer if controversial plans get go-ahead, warn unions after research by job website

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The West Country, Midlands and North of England will be hit hardest by government plans to regionalise pay according to the latest research on private sector wages from job search website Adzuna.co.uk.

Pay cuts of up to 17% could be expected in cities such as Leeds, Liverpool and Belfast as the review announced in the Budget looks to bring regional public sector pay in line with the market.  The data also reveals large variations in the London ‘premium’ for different jobs.

TUC general secretary Brendan Barber said: “It won’t just be public sector workers outside of London and the South East that lose out if the government’s ill-thought out proposals for local pay go ahead.

“Local economies, already reeling from the impact of thousands of public sector job losses and a lack of consumer spending because of the government-imposed public sector pay freeze, would be dealt a further blow if public servants’ pay is held back.

“Setting pay nationally makes sense for the public sector and many large private firms opt for this approach too. They know that negotiating local pay can be incredibly complicated, time-consuming and expensive.

“It’s not public sector pay rates that are stopping private companies from taking on staff. The real reason is that with our economy stagnating most businesses don’t feel confident enough to invest and take on staff and won’t do so until the UK’s wider economic prospects improve.”

The Top 10 Cities in the UK were ranked by average salary using Adzuna’s comprehensive search index of over 500,000 live job ads, as well as the major Regions.  Adzuna also analysed specific job titles by location to see regional differences in pay by job sector.

UNISON general secretary Dave Prentis said: “This is more evidence of the excruciating impact of local pay on some of the most economically depressed areas of the country.

“The government should think again before introducing crude cuts that will starve local businesses of much-needed income, and add to the number of boarded-up shops in the high street.

“Public service workers are already suffering from a pay freeze despite the rising cost of basic necessities such as food and fuel. Local pay is expensive to implement and makes no economic sense.”

The study shows that private sector workers in the West Country, the Midlands and the North of England are paid at least 15% less than the national average.  If the pay policy suggested by the Chancellor is fully implemented, this means that tens of thousands of the 140,000 workers in the Department for Work & Pensions, the Home Office and the Department for Transport could expect pay cuts of up to £5,000.

The data also shows that IT professionals in Belfast, Hospitality workers in the North East and Call centre staff in Edinburgh are currently among the most underpaid staff in the country, earning 30% less than the national averages for their professions.

While many areas of the UK struggle to keep up with national averages for their sector, the data shows Londoners earning 20% more on average, and huge salary premiums being paid for low skilled workers in the capital. Nannies, Bar Staff and Customer Service workers are taking home 30% more than average in London, suggesting a shortage of labour for these roles.  In contrast, the real private sector ‘London weighting’ for roles such as journalists and recruitment consultants is less than 10%.

But the London workforce shouldn’t be popping the champagne corks yet. If George Osbourne’s regional pay policy is enacted, the London allowances paid to some public sector workers in inner London (up to 20% of salary in sectors such as Nursing) could come into line with lower private sector equivalents, meaning pay cuts of up to 5% even in the capital.

Doug Monro, Co-Founder of Adzuna, said “Because we list nearly every UK job ad in our search engine, we get a great birds eye view of what employers are paying across the UK. Workers will always be paid a premium where demand outstrips supply, but the changes could well affect the prosperity of the regions and lead to even more migration into an overcrowded London.”

 


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