On average the public sector’s salaries are 6% higher than equivalent private sector rates and in the North West that premium is arguably much more. It is nationally negotiated pay rates and conditions that create the anomaly and in regions such as the North West they create a disparity that may well be higher. This is a premium that many, perhaps in the private care sector particularly, cannot afford. It hinders them in recruiting the best managers. Over a period of time abolition of national pay bargaining, proposed last week by a centre right Think-Tank, would almost certainly remedy the inequality.
However, anything that tends to drive pay rates down (albeit slowly) is not going to be welcomed by public sector employees. Naturally the public sector Trade Union, Unison, is already up in arms.
But public sector employers are not likely to welcome the idea either. Wage bargaining is a costly and time consuming process and local bargaining would create the need for negotiating and pay bargaining skills to be available locally. Such skills are rare among those employers.
There must be doubt whether this radical idea can materialise.
Yet the concept of care workers, some at or close to the minimum wage, paying tax to enable their colleagues in the public sector to be paid better rates does not sit comfortably with equity. Nor, as already said, does inequity make it easy for the private sector to recruit the best employees.
And if the local public sector pay premium is £3,200 pa (as in Merseyside), then private sector employers should welcome the possibility of levelling the playing field.