Public sector pay deals 'lagging behind' » Local Government » 24dash.com

Pay deals in the public sector have fallen more than 1% below those in private firms as a result of the Government's pay policy, a new report showed today.

Settlements in private companies in the three months to May were worth an average of 3.8%, in between the Consumer Prices Index and RPI inflation.

But rises in the public sector were running at 2.7% in the same period following below-inflation offers in the Civil Service, local government and a deal in the NHS.

A study of almost 170 pay settlements by analysts Income Data Services showed that deals in manufacturing firms continued to keep private sector awards at relatively high levels.

Ken Mulkearn, of IDS, said: "Private sector wage deals continue to present a relatively strong picture and settlement levels there have maintained their lead on those in the public sector."

TUC general secretary Brendan Barber said: "These figures confirm that public servants are facing cuts in their living standards, yet every expert agrees that this will do nothing to reduce inflation.

"Keeping down the pay of nurses does not result in a cheaper gallon of petrol."

Meanwhile, MPs will decide today whether to defy Prime Minister Gordon Brown and award themselves an inflation-busting 4.4% pay rise.

Ministerial salary increases have already been scrapped in a bid to set a pay restraint example amid tight deals for public sector workers.

Now the Commons must choose whether to ignore an independent review that said they deserved a big pay hike and accept the Government's deal instead, worth around 2.2%.

MPs will also vote on a shake-up of their controversial allowances, for millions more pounds to be spent on their offices and for their home addresses to be kept secret.

Sir John Baker's review of Westminster pay had recommended that MPs receive three years of £650 "catch-up" payments and a pay rise in line with recent average public sector earnings.

But the Government wants pay linked to the mid-point of a basket of public sector settlements - meaning a likely rise of 2% in 2008/09.

Commons leader Harriet Harman will urge MPs to show restraint amid opposition warnings of a looming "summer of discontent", with massive public sector pay strikes in the pipeline.

The halt to ministerial pay will not prevent them receiving the same rise as other MPs in their £61,181 salary for being a constituency representative.

Debate on the pay rise will be followed by another on plans to shake-up the Westminster expenses system drawn up in the wake of the Derek Conway scandal and other controversies.

MPs will be stopped from using public money to do up and furnish second homes but the total they will be able to claim for food and running those homes will drop just £206 a year to £23,800.

The plans, put forward by the Members Estimate Committee chaired by Speaker Michael Martin, will also bring in more rigorous scrutiny of MPs' claims, including independent auditors and spot checks.

Anti-sleaze watchdog Sir Christopher Kelly has welcomed the scrutiny and transparency measures as "significant steps" towards the sort of "robust regime" the public should expect.

But the chairman of the Committee on Standards in Public Life also flagged up a lack of "structural change" in the proposals, notably over the employment of family members.

The reforms do not include any changes to such job rules, although new contracts are to be used and MPs have already begun declaring the practice in the Register of Interests.

Mr Conway, who was subsequently stripped of the Tory whip and suspended from the Commons for 10 days. overpaid his son out of his expenses.

MPs will also vote on a motion proposing MPs' home addresses should be excluded from the first publication, later this year, of a detailed breakdown of how they spent allowances.

The details are being released after the Speaker lost a High Court battle to prevent the disclosure, under freedom of information laws, of similar data relating to high-profile MPs.

Proposals to centrally procure accommodation for MPs, meeting a common standard across the country, are expected to more than double the cost to up to £6 million a year.

The vote could also be the last time MPs grant themselves a pay rise as they will also be asked to approve a move to put the process into the hands of a review body.

Lib Dem MP Norman Baker said it was "ridiculous" that MPs voted on their own pay and suggested an independent body should be responsible for it.

He also said the proposals for expenses would go some way towards tightening the rules and dealing with the problem of MPs stretching the allowances to their advantage.

But it would not solve all the problems, he said.

"We'll have to produce receipts for everything - that's something I've been arguing for for a long time," Mr Baker told GMTV.

The idea of buying goldfish tanks, oil paintings, top of the range televisions, the "John Lewis list" - that's all going to go."