Dear public sector employees,
I am writing this on the eve of what promises to be the harshest budget in thirty years, possibly in living memory. It certainly needs to be.
And I notice that some of the more militant unions; Unite, for example, are already flexing their muscles ready for a summer of discontent. Here’s why that is a bad idea.
It won’t achieve anything. It doesn’t matter how much you gripe, strike, or throw toys out of the pram. Britain is broke, we’ve spent 30 years living beyond our means, and it has to stop. I know there are some disgraceful bankers with their noses in the trough; but there are some very tasty deals for Unionistas too. As the recession bit in 2008-9, Unite chief Tony Woodley’s pay went up by 30%. I can’t say the same for my pay packet!
But my real issue is with the gulf in employee remuneration regimes between the public and private sectors.
Under a Freedom of Information request, a national newspaper recently found that local authority staff take almost twice as many days off sick as staff working in the private sector. Employees at the worst-performing councils take over 12 days off per year on average; and even the best-performing council, Calderdale, is worse than the private sector average. Sick pay policies in the public sector generally pay out on full pay for longer than private sector schemes, and absenteeism is often not a part of local authority appraisals and assessments. Now, I’ve been to some council offices, and they’re pretty dreary. But not dreary enough to account for a doubling in sick days.
Then there’s working hours. The Policy Exchange think tank says that employees in the private sector work 23% more hours – that’s over 9 years more across a lifetime – than those in the public sector. As an entrepreneur, I don’t have official working hours of any sort: I stay at my desk until whatever needs to be done gets done!
And finally the elephant in the room: pensions. Outside the gilded halls of the public sector nursing home, the idea of a final salary pension is all but entirely anathema. And with corporate pensions running at an alarming deficit, I’ll be amazed if companies in ten years time will be able to honour their commitments at all. The government’s responsibility is even greater: its total future commitment is three quarters of a trillion pounds. It’s simply not possible and not sustainable for either sector to honour its pension commitments, and, here especially, I expect promises to be broken by successive administrations.
I’m not prepared to commit an opinion on the most obvious differential between the public and private sectors: basic pay. I don’t think there’s any legitimate comparison to be made, as the waters have been muddied too much by:
- Outsourcing public sector services to the private sector (e.g. refuse collection)
- And the move of some highly paid private sector job to the public purse (e.g. the nationalisation of Northern Rock)
…all of which makes pure pay differentiators very tough to judge. Even so, the best analytics I could find (an outfit called Straight Statistics) suggest that for median payscales in comparable jobs, public sector employees enjoy 7% more cash than those working for businesses.
This budget is going to be painful for everyone. The last thing we need is a wave of strikes and union militancy on the basis of dogma rather than genuine unfairness.
Filed under: current affairs, finance | Tagged: absenteeism, austerity, budget, business skills, CIPD, entrepreneur, entrepreneurship, local authority, pay rates, pay scales, pensions, private sector, public sector, public sector pay, run a business, sick days, sick pay, start a business, straight statistics, union, Unite, working hours | Leave a Comment »








