Public sector pay 'still frozen'

Public sector workers, including NHS and council staff, are continuing to be hit by a pay freeze, while employees in some private firms are seeing wage rises ahead of the rate of inflation, according to new research.

Around two-thirds of pay reviews in the public sector are leading to pay being frozen, with a few exceptions at councils in the South East not covered by national bargaining, said pay analysts Incomes Data Services (IDS).

Workers in manufacturing and production firms have seen recent median settlements of 3%, 0.2% above June's RPI inflation rate, while the figure for the whole economy is 2.5%.

Alastair Hatchett, of IDS, said: "Median pay settlement levels across the economy have been significantly below the RPI inflation rate since November 2009.

"The fact that the private sector median has now nudged ahead of inflation will provide a little welcome respite for some hard-pressed employees, but the coming months will tell whether this represents a continuing trend or a temporary blip."

TUC general secretary Brendan Barber said: "Small real-terms pay rises in parts of manufacturing, where workers took painful hits to their pay and hours to stay in work at the height of the recession, are welcome.

"But with workers across private sector services continuing to experience real wage cuts, the pain is still far from over.

"It will take many years of stronger pay rises to claw back the wages lost over recent years, particularly with tax credit cuts also hitting family incomes, and across the public sector workers are still experiencing deep cuts in their living standards thanks to years of pay freezes and caps."