Plans to move to a regional pay scheme have been criticised by Preston councillors who claim it will lead to a drain of skills and talent from the city and surrounding areas.
Chancellor George Osborne wants to end uniform pay for teachers, nurses and other public sector workers and has stated he wants public sector pay to mimic the private sector and be more reflective of local economies.
However, critics believe this will mean staff in low paid areas will face pay cuts and that it will cause problems for businesses.
Preston Labour party Coun Mark Yates, who represents the Larches ward, is putting forward a notice of motion to Preston Council voicing his concerns about the plans and his fears that it will lead to a “skills drain out of Preston and central Lancashire.”
Coun Yates said: “I believe a move to regional or local pay schemes will lead to a large reduction in pay and spending power and ultimately a skills drain out of Preston and Central Lancashire.
“For highly skilled people, Preston will become a less attractive destination and this will inevitably make it more difficult for local organisations to recruit the talent required to lead and overcome the huge and immediate challenges facing the public sector.
“With Preston highly dependent on the public sector for employment, any attempt to drive down wages in local public sector organisations can only be considered counterproductive and will have profound consequences for the local economy.
“Limiting people’s spending power will reduce demand in the economy, lead to further unemployment and will come as a bitter blow to Preston businesses already suffering from the effects of large scale cuts to the local authority.”
The notice of motion proposed by Coun Yates and seconded by Coun Phil Crow, states: “Preston Council resolves to ask the leader of the council to write to the Prime Minister, the Chancellor, Preston’s MPs, pay review bodies and local public sector employers setting out the Council’s opposition to a regionalised pay scheme and the severe consequences that any such scheme will have on the economy of Preston and Central Lancashire.”
The Chancellor is looking to set different pay rates for teachers, nurses and council workers in different regions.
He announced the measures last year with a view to introducing them in April 2013.
The Armed Forces, doctors and dentists would be excluded, but teachers, NHS staff and council workers could see pay frozen or cut to reflect local wage levels.
The notice of motion will be discussed at a Preston Council meeting being held on Thursday October 25 at 2pm.