There has been much talk recently of introducing regional pay in the public sector with Andrew Lansley and others stating their support of the 'policy'. There are, of course, a number of issues with this policy and we aim here to examine them.
The case is made that by establishing a regional pay framework, it makes the public sector more flexible and responsive to local markets. In contrast, Unison argue the assumption that all private sector pay varies by location is false, in reality most large, multi-site private sector companies have national pay and grading structures (plus additions in London and the South East). Zonal pay has become widespread in certain sectors, most notably retail and retail banking, although these tend to follow the understandable hierarchy of higher rates for London, the South East and the rest of the country. Complex renumeration systems are then, by contrast, comparatively rare.
As regional pay has been dispensed with as unworkable and divisive by much of the private sector and with the Government endlessly citing the private sector as the blueprint for effective and efficient service provision, why would they choose to disregard this inconvenient truth? The answer is in a fetishisation of cutting working conditions in the public services and an adherence to narrow economic policy and neo-liberal dogma that is as pernicious as it is mis-guided (as evidenced by the double-dip recession).
Such a policy would embed inequality across the regions with a clear differential between pay in the North and the South. The idea that living costs (outside of housing) are significantly cheaper in the North being a myth as utility, fuel, food, VAT prices are universal (public sector workers living in 'poorer areas' are struggling to make ends meet in a time of imposed austerity, spiralling living costs are not confined to the south). There have been a number of excellent studies into the cost implications of inequality including 'The Spirit Level' and the Government sanctioned 'Marmot Review'; both cite (from a very strong evidence base) that inequality is counter-productive and significantly more costly than more equitable societies.
There are also many examples of particular jobs in the public sector struggling to recruit staff, this policy will exacerbate this situation and dis-incentivise what (until recently) had been seen by Government as admirable professions - nursing, teaching et al; coupled to this many in the public sector are already suffering pay freezes, reducing pension benefits and longer working lives with predictable impacts on morale. Regional pay will do nothing to ensure professions are capable of presenting a type of employment many will view as attractive, therefore compounding shortages. It is also politically naïve to imagine that the combination of these factors will not negatively impact the lives of those relying on publicly provided services.
Having different pay structures across the regions will inevitably create a situation where workers are encouraged to move to areas where the pay available for their skills is higher, creating a 'brain-drain' to the South - as Andy Burnham (Shadow Health Secretary) said via Twitter today 'Areas where health is worst need to attract the best NHS staff. Regional pay will achieve exact opposite: poorest services in poorest areas'. This migration will leave areas in the North a smaller pool of qualified and experienced staff to choose from and create increased pressures on services in the South due to having significantly increased local populations.
As we know there is currently a housing crisis, the transference of populations in this manner is not currently matched by housing availability or policy. Perhaps most disturbing (on this point) is the realisation that if skilled workers are migrating South and local authorities in the South are forcibly rehousing benefit claimants in the North there will be an ossification of the North/South divide - the South becoming ever richer, the North becoming ever poorer.
It is also quite clear that such pay differentials actually harm productivity and efficiency, is this the Governments intention? Perhaps if we entertain the idea that the long game is to promote the idea that the only way to rescue unproductive and inefficient public services is to justify further privatisation. A recently published TUC paper questions the economics of this pursuit:
'Reducing public sector wages in struggling areas would be certain to lead to fewer jobs, as a further fall in consumer spending would drive more private sector enterprises out of business. The failure of these enterprises would then cause further ripple effects. Economists estimate that this doubles the impact of any public sector wage cut'.
The counter argument is never far behind; a case in point being Melanie Philips, right wing journalist, (who is always keen to offer her views on the public sector states), 'although some public sector jobs are indeed essential -- such as front-line teachers, nurses or police officers -- the public sector cannot provide the motor for prosperity because it does not produce wealth. On the contrary, it uses up the country's wealth'. Philips misses the point here by reducing 'value' to merely 'wealth creation'; the public sector (whilst not creating wealth) has immeasurable value - creating healthier communities, protecting our children, managing our waste.
This is not about an argument of left and right; it is an argument about right and wrong. Let's be clear, if this policy is implemented, it will be a hammer blow to the public sector, a policy designed not for equality or fairness but as a divisive tool to deconstruct the welfare state and further demonise (often highly qualified, capable but much maligned) public sector workers who offer their careers to serving communities.
This is another example of ill thought out policy direction that fails to take into account the repercussions for the whole system, for people's lives and for the effective and equitable provision of services. This policy will do nothing to secure improvements in public services, it will undermine committed, hard working professionals and entrench inequality - it must be opposed.
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