Headlines: May 11th, 2007



The Social Market Foundation has claimed the present system of public sector pay is failing to target resources at those areas that are most in need. It is calling on the Government to introduce a zonal system as a way to end staff shortages in some areas.

The Foundation says that over the last decade pay in the public sector has grown faster than pay in private business but that shortages of staff have continued, especially in deprived areas. It is also concerned that increases in pay have not been tied effectively to improved performance. In a new paper for the Foundation, Robin Harding argues the case for zonal pay, which would for example, allow individual schools and hospitals to vary pay rates in response to the local labour market.

In the report, “Poverty pay: How public sector pay fails deprived areas”, he says the current system makes crude adjustments for the higher costs of living in London and the South East but does not give greater rewards to nurses and teachers who work in tough conditions in deprived areas. The result, he argues, is shortages of well-qualified workers in areas that need them most.

The proposed new system would see the retention of national pay bargaining but would end London weighting and local supplements. National pay agreements would set four or five progressively higher pay bands and instead of a school or hospital being in a higher band simply because it is in London, it would move up or down the bands depending o­n its ability to recruit staff. The benefits, the report says, would include the creation of better public services in deprived areas, fairness to staff who work in those areas and better use of public money.

The Director of the Social Market Foundation, Ann Rossiter, said, “Equal pay for equal work has been a standard demand of the trade unions movement for decades. But this is not the reality o­n the ground. This scheme comes closer to that ideal by paying public services more for front-line work and work in challenging areas.”