10 reasons why regional pay won’t work

17 May

by Amy Jackson


Yesterday 22 Lib Dem MPs sent an open letter to the Guardian in opposition to the government’s plans for regional pay. Osborne argues that ending national pay agreements and centralised pay bargaining gives a fairer deal to taxpayers, creates a better service (somehow) and ensures a fairer deal for public sector workers (we are sure they would disagree). Here is why he is wrong.

1. Regional pay is unfair and in breach of equal opportunity principles. People doing the same job should not have different rates of pay.  One exception that is perhaps justifiable is the context of London, and London weighting already covers the significantly higher living costs of the capital.

2. The employer has a responsibility. Civil Servants are employed by Central Government.  It is a national work force that should have national terms and conditions.  Without them the legal basis for any deals becomes dodgy.

3. How do you match up the regions to regional pay?  Remember we already have 3 regions – inner London, outer London and the rest. There are also pockets within regions that are not easily recognised and if they are assumed to be compatible with low rates of pay then you have chaos. Manchester within the North West is a classic example.

4. Regional pay depresses the regions outside London even further and drives yet more business and talent to the South East where pay would undoubtedly be higher.

5. Implementing variable pay rates the first time may be seen as practical, but with time the pay rates become a factor in what happens the business.  At the moment we have a flat rate of pay and we can measure the impact of that rate across the country on turnover.  With different rates of pay in operation you are not sure whether the issues are down to the rate of pay, the social conditions or the competence of managers.

6. Who negotiates the different pay rates?  If it is done centrally there is a real risk of underhand bargaining and personalities coming into play.  One union rep gets a deal the other cannot because of personal history.  If it is devolved there is a risk that inconsistency creeps into other areas. For example, in the North East pay is poor because of reduced budget allocations but locally certain sweeteners are added (such as an extra half day off each week) in order to get a deal secured.  This lack of control, plus grievance, plus inconsistent conditions of service, is a real concern.

7. The impact on staff morale.  Staff are concerned with fairness and money.  Regional pay will affect productivity and motivation.  Civil servants deal with vulnerable people who need responsible civil servants, not individuals who have a sense of grievance.

8. The civil service has not had a pay rise for 4 years.  The Tories argue that this is essential – would it not be more easily breached with regional rates of pay?

9.  Regional pay will create a huge backlash. The Coalition has already seen two days of national strikes in the public sector against proposed pension changes, and attempts to implement regional pay would be met with a similar reaction.

10. Private sector employers are unlikely to respond with generous offers of pay rises, and instead may feel that as the local rate was now falling, they too could hold down pay in their businesses. The UK economy is suffering from a lack of demand, and paying people less is hardly the solution.

Regional Pay, No Way

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