European Trade Union Institute, ETUI.

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United Kingdom

21 March 2019

UK: industrial action looms against poor public sector pay resulting from 10 years austerity policy

After an austerity policy of ten years, the income of public sector workers has reached an alarming level. A study commissioned by the Living Wage Foundation shows that 1.2 million public sector workers earn less than the real Living Wage. The real Living Wage rate, which is independently calculated based on the real cost of living, is currently £9 across the UK and £10.55 in London. Workers have started industrial action for decent pay and improved conditions at work.

Public sector workers, employed either directly by the state or on outsourced contracts (almost half a million are on outsourced contracts, while 725,000 work directly for a public sector body), account for up to 20% of the 6 million people in the UK paid less than the real living wage, which is a voluntary minimum set each year to reflect living costs. The Living Wage Foundation published findings that show there are over 1 million public sector workers, paid by the public purse, trapped in in-work poverty earning below the real Living Wage. The Foundation campaigns for the idea that workers deserve a real Living Wage based on the cost of living, not just the government minimum. According to the study, there are not only moral reasons to improve the income of public sector workers. From the money spent uplifting the pay of public sector workers, 35p in every £1 would go back to the Treasury in increased tax receipts. Moreover, the experience in other sectors shows that 75% of Living Wage employers have seen an increase in staff motivation and retention.

TUC research, released in early 2018, showed that one in seven children with a parent in the public sector would be living in poverty by the end of the year. That’s 550,000 children – up 150,000 since 2010, when the government started holding down public sector pay and restricting in-work benefits. After a decade of austerity several government departments have serious problems paying higher wages out of existing budgets without having to find cuts elsewhere.

In some sectors, the effect of underfunding of the public work has resulted in endemic poverty pay with strong negative effects on the workforce. For instance, the root cause of the growing social care workforce crisis is poor pay in the sector. Half of all care workers in England – more than 500,000 workers across the sector – earn below the real Living Wage. The sector alone accounts for one in 10 of all low-paid workers. Beyond this, there is also extensive evidence of illegal low pay and the avoidance of the minimum wage. According to a survey, four in five employers in the social care sector admit that low pay is the biggest obstacle to filling the sector’s 110,000 vacancies. Local authorities – which commission most social care in the UK – have had their government funding halved since 2010. Earlier analysis by the Institute of Fiscal Studies in 2017 found departments such as justice and work and pensions facing real-terms cut of as much as 40% over the decade to 2020.

In recent months, this has led to intensified protests and strikes, against what workers describe as poverty pay. In February 2019, outsourced cleaners, catering staff, security guards, receptionists and porters at the Department for Business, Energy and Industrial Strategy (BEIS) held a 26-hour strike in protest. In January 2019, outsourced cleaners, security guards and receptionists at the Ministry of Justice (MoJ) staged a 48-hour strike to demand the London living wage. Outsourced cleaners at the MoJ who staged a walkout in August 2018 succeeded in bringing their pay rates up to £9.

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