Media outrage about public sector manager salary increases is “unfounded” according to private sector research published this week.
Income figures from Hay Group’s salary database shows senior public sector employees have not received disproportionate pay rises over the last decade and continue to earn 33% less than private sector colleagues.
The data also shows front-line public servants are now better off than employees in the private sector although the management consultant’s pay experts have predicted this will be reversed as the government’s austerity drive takes effect.
However, Hay Group’s reward information consultant David Smith, said: “Our data shows that the media furore over public pay is unfounded, with percentage rises at senior management level largely identical to those in the private sector.
“Public sector managers should arm themselves with reliable and robust figures, particularly around the value of the total package, to help support their decisions about pay in the public domain.”
Communities secretary Eric Pickles has been a particularly vocal critic of “exorbitant” pay deals for town hall chief executives. Last year, he told the Daily Telegraph: “There is widespread public concern about soaring salaries in local government, with chief executives moving from council to council like football managers.”
Hay Group data for senior managers in the private and public sectors shows senior pay in both the private and public sectors has risen in line with each other between 2000 and 2011.
While private sector senior salaries rose by 62% to a current average of £176,498, public sector salaries rose by 61% to the current average of £118,673.
LGC’s Salary Tracker research, published in July, showed the average salary of chief executives appointed in the previous 12 months was 18% lower than their predecessors’ salary.
Hay group’s data shows a different trend for front-line and support staff in the public sector who now earn more than their private sector colleagues after average public sector salaries rose by 13% more than private sector wages
In 2000 average public sector salaries were £12,035 compared to the marginally higher £12,652 private sector average.
After more than a decade of Labour government public sector spending policies and following a drop in private sector wages since the recession hit in 2009, that position has switched with the average public sector salary of £18,027 compared to £17,332 in the private sector.
However, Hay Group predicted private sector salaries would soon be outstripping public sector salaries at all levels.
Mr Smith said: “The public sector was not directly affected by the global economic downturn, unlike the private sector. But with government austerity taking hold, many employees are beginning to feel the impact of cost cutting in their wallets.
“With pay restraint taking hold in the public sector and pensions set to become a less valuable benefit, we predict that the salary gap will start to widen at all levels in the next couple of years.
“In these tough times, the challenge for the public sector will be to contain costs yet still be able to attract and retain key talent.”