01 October 2004
Pay rises in the private sector are outstripping those for public sector workers for the first time since April 2001, research has shown.
Figures published by Industrial Relations Services in its Pay databank report reveal that pay settlements in private firms averaged 3.1% in the 12 months to August 2004. This compares with an average of 2.9% at August 2003.
By contrast, pay deals for public service workers fell from 3.3% to 2.8% between August 2003 and 2004.
The IRS statistics suggest that this trend is accelerating. Between June and August 2004, average private sector rises went up from 3% to 3.1%, while average public sector pay deals fell from 3% to 2.8%.
The research also shows that, with the headline inflation rate at 3.2% in August 2004, just one in four pay deals is above inflation. The Treasury has consistently demanded public sector wage restraint and stressed that it will not fund above-inflation deals.
But report author Sheila Attwood warned that inflation-linked deals due to take effect in the coming months would almost certainly assume an inflation rate of more than 3%.
PFoct2004
