National pay should remain in place for only the most senior jobs in the public sector, according to consultants Mercer.
In a submission to the Office of Manpower Economics, Mercer argues that public sector organisations need to first assess whether roles are local, regional or national. The consultants suggest that, because recruits from local labour markets fill most lower and mid-tier roles, locally set pay for these positions is ‘sensible’. However, for more senior and specialist roles, which are dependent on a national labour market, salaries should be defined by national pay frameworks.
Daniel Hibbert, public sector pay specialist and principal at Mercer, said arguments were ‘strongly in favour’ of local pay.
He said: ‘The question as to whether regional pay is suitable rests on whether a job operating in a local, regional or national employment market. Most public sector roles operate in local or regional markets but larger roles – which require high levels of specialist skills – operate in more mobile national markets so a national approach is more appropriate.
‘The government needs to give local organisations the flexibility to determine their own approach based on their analysis of their workforce.’
Mercer’s submission comes in response to the Pay Review Bodies’ call for evidence on regional pay. The bodies have been asked by the Treasury to examine the case for moving away from national pay in the public sector and are expected to report back next month.
