Osborne risks backlash over public sector pay reform

The government is to axe automatic annual pay rises in the civil service as part of a pledge to make £11.5 billion worth of public sector savings in 2015/16.

Chancellor George Osborne revealed the proposed legislation in the Spending Review 2013 at the same time as confirming that public sector pay rises will be limited to an average of up to 1% for 2015-16, to help encourage performance-related pay.

He said: “Progression pay can at best be described as antiquated; at worst, it’s deeply unfair to other parts of the public sector who don’t get it, and to the private sector who have to pay for it.

“So we will end automatic progression pay in the Civil Service by 2015-16. And we are working to remove automatic pay rises simply for time served in our schools, NHS, prisons and police.”

But Jayne Flint, an employment solicitor at Shoosmiths, warned that the government could face a backlash from trade unions and public sector employees over the changes.

She said: “There’s a very good chance that the legislation could result in a number of claims for unlawful deductions from wages.

“The Employment Rights Act says that an employer will not make reductions from wages unless there’s an agreement from that employee to that deduction being made.

“The move could also attract huge resistance from the unions.”

Matthew Sinclair, chief executive of the TaxPayers’ Alliance, added: “At the moment, public sector staff get more generous pay than their counterparts in the private sector and gold-plated pensions.

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“Osborne has taken an important step towards delivering a fairer deal, although he is still planning to increase the pay of bureaucrats already receiving more than the private sector workers who pick up the bill.”