Lancashire has lost out on £267million due to public sector pay cap since 2010

So when will it all end?

Tuesday, 12th December 2017, 12:00 pm
Updated Tuesday, 12th December 2017, 1:13 pm
Key workers struggling as economy hit

Lancashire’s economy has lost out on £267m through a public sector pay cap that has left nurses going to food banks and firefighters struggling to feed their families.

That is the claim from trade unionists, who say that the decade long public sector pay cap – as well as harming low paid workers – is strangling the county’s economy.

New figures from the TUC show that rising prices and stagnating or falling pay rises – also hitting the private sector – have left many Lancashire workers around £2,695 worse off in real terms than in 2010.

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The TUC’s figures appear to show that far from being over, austerity is still a reality for many in Lancashire.

But in a twist, more than one million council workers have now been offered a two-year pay deal worth two per cent a year for most employees.

Workers on salaries starting at £19,430 would receive a two per cent rise from next April 2018 and a further two per cent in April 2019, with those on lower salaries receiving higher increases.

North West firefighter and FBU official Gary Keary said: “Sadly firefighters have and continue to be hit very hard by the worsening pay situation. There isn’t an organisation in the public sector that hasn’t been hit.

“Full-time operational firefighters are struggling to feed their families.”

The TUC claims the public sector pay cap has reduced spending power in the North West by £1.3 billion this year.

The analysis shows that the North West’s public‑sector workers are earning, on average, £2,695 less today than if their pay had risen in line with inflation (CPI).

As a result, since the pay caps began in 2010, full‑time public sector workers in the North West have had £7 billion less to spend in the local economy.

In Preston alone, that is a loss of £33.2 million.

Across North West areas, the figures show local economies are missing out on huge amounts:

• In Merseyside, spending power is down £285m;

• In Greater Manchester, it is down £497m;

• Lancashire has experienced a reduction of £267m.

Recent TUC polling shows that one in seven (15 per cent) of public sector workers skipped meals this year to make ends meet. And almost one in four said they couldn’t pay an unexpected bill of £500. Research published by the IPPR found that raising public sector pay would boost spending in local economies. And it would help the public purse by raising tax revenues and reduce the cost of benefits.


Fire Brigades Union official Gary Keary said the reduction of staffing levels and and other cuts had left the service in a worsening situation.

Full-time firefighters in the North West were reporting financial difficulties. He said: “Sadly firefighters have and continue to be hit very hard by the worsening pay situation. There isn’t an organisation in the public sector that hasn’t been hit. Full-time operational firefighters are struggling to feed their families. There was nothing in the budget to make difference either.”

The view from businesses

Babs Murphy, pictured, Chief Executive of the North & Western Lancashire Chamber of Commerce said: “There is undoubtedly a lot of sympathy for public sector workers within the business community, as there is from the general public.

“But we must not forget that numerous local businesses are struggling to award pay rises to their own staff too. They are reporting that they have either not paid an increase at all or are awarding smaller pay rises than their public sector counterparts.

“Businesses are under increasing pressure from the burden of employment costs, and this will influence the choices they make and outcomes for employees. Higher employment costs impact on the bottom line and reduce the resources available to invest in the business and its people. It is worth reiterating that businesses are the wealth creators from which the public sector depends on.

“For the UK to remain an attractive and competitive environment going forward, action is needed to prevent unsustainable rises to the cost of doing business.”

Government response

The Government maintains that the public sector pay cap has been an essential measure to save money and cut the national deficit.

When the full effects of the 2008 recession were felt, the Government had to take drastic action.

Budgets were cut across the board, and in 2010 the cap on public sector pay rises was brought in, led by then Chancellor George Osborne.

There had been growing pressure on the Government to lift to the pay cap to boost morale and help retain staff.

In September the government said police officers would get a one per cent rise plus a one per cent bonus, with prison officers getting a 1.7 per cent rise – both funded from existing budgets.

Chief Secretary to the Treasury Elizabeth Truss confirmed in September “now is a time to move to a more flexible approach” to public sector pay.

The chancellor’s Budget last month reconfirmed the ending of the one per cent public sector pay cap where appropriate.

Council staff

Lancashire County Council has had to make cuts totalling millions of pounds to balance the books.

Against a backdrop of dwindling finances, with a predicted £167m shortfall by 2020, union officials fear the council is set to run out of cash within a few years.

Elaine Cotterell, pictured, of Unison, reacted to the Government’s late pay offer.

She said: “It’s a start on addressing the chronic low pay in local government but the offer falls short of the offer submitted by the joint unions last May. Local government staff are the lowest paid in the public sector and have seen their pay reduce in real terms by over 20 per cent since 2010.


One of the sectors most hit by pay caps and budget cuts is the NHS.

There have been reports of full-time nurses going to food banks.

And staffing levels are said to be a critical level. Amid all this, low pay is still an issue.

Unite union official Steve Turner, pictured, a campaigner against Chorley Hospital Cuts, said: “This isn’t just a pay cap, this is a effectively a pay cut.

“It has a massive impact on the local economy. We can’t go on paying for austerity like this .

“There are nurses literally going to food banks. It can’t go on.”