Scotland to end 1% public sector pay cap

By on 17/07/2017
The Scottish government is set to scrap the public sector pay cap (Image courtesy: Mogens Engelund).

The Scottish government has pledged to scrap the one per cent public sector pay cap, which has applied across the UK since 2010, in its 2018-19 budget.

Finance secretary Derek Mackay confirmed the move in a statement to Scotland’s Holyrood Parliament and a letter to UK Chancellor of the Exchequer Philip Hammond. “We will take a reasonable approach that absolutely recognises that the time is up for the one per cent pay cap,” he told lawmakers at Holyrood late last month. “Not only will the Scottish National Party [SNP] commit to that, but we will do it.

“As in previous years, we will engage with unions during the development of the policy, both at ministerial level and at official level and we expect to publish it as part of the draft budget towards the end of the year.”

The Scottish government sets the pay for 485,000 public sector workers in Scotland, amounting to around 90 per cent of the total. The pay of NHS staff across the UK is set by the independent NHS Pay Review Body, but within a budgetary parameter decided by the government.

In his letter to Hammond, sent earlier this month, Mackay said: “We are acutely aware of the impact that rising inflation and social security cuts are having on working households. This is why we will bring to an end the one per cent pay cap by taking into account rising living costs in setting pay in 2018-19 and in future years.

“As we work towards the next Scottish budget, we are engaging with trade unions on a pay policy for 2018-19 that reflects both inflationary pressures and the need for affordable public finances.”

Mackay said that where pay recommendations were set at a national level, such as in the NHS, “we have already approached workforce representatives to discuss our submission to the independent pay review body”.

He urged the UK Government to join the Scottish government in scrapping the cap for those working in the services where pay was not a devolved matter, including tax administration and job centres – whose staff are employees of the UK-wide civil service.

Finance secretary Derek Mackay, confirmed the move in a letter saying “We are acutely aware of the impact that rising inflation and social security cuts are having on working households” (Image courtesy: Johnclarksnp).

First Minister Nicola Sturgeon said there would be talks over coming months involving unions, public sector workers and employers about “how we find the right balance between ensuring people earn a fair wage and protecting employment and public services”.

“That won’t always be an easy conversation – unlike at Westminster we really don’t have a magic money tree,” she said in a statement on 4 July, referring to the Conservatives’ £1 billion ‘confidence and supply’ deal with the Democratic Unionist Party (DUP) of Northern Ireland. “But no matter what the UK government does, the SNP will deliver a new pay deal for Scotland’s public sector workers.”

The move comes less than two months after the SNP defeated a move by Labour members of the Scottish Parliament to scrap the NHS pay cap, arguing that the Scottish settlement is more generous than its English counterpart. First minister Nicola Sturgeon argued at the time that the SNP’s model permits higher pay rises for low earners, and that Scottish junior nurses earn more than their peers south of the border.

The party has faced pressure to change its policy from the Labour Party, Green Party and unions. Unison’s Scottish branch is mounting a “summer campaign” to end the pay cap for NHS staff.

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See also:

Fiji kicks off long-awaited pay review

Brexit: UK government should try to win back officials from European Commission by offering ‘more than competitive pay’, committee says

UK government splits grow over austerity

About Liz Heron

Liz Heron is a journalist based in London, who specialises in international news. She worked on daily newspapers for 16 years, reporting extensively on both general news and education. She was Education Editor of the South China Morning Post in Hong Kong and has contributed to a wide range of British media including The Independent, The Guardian and the BBC.

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