Pay gap between public and private sectors widens

The government says the pay gap is much greater in some parts of the country

The average worker in the public sector was paid 8.2% more per hour than the average private sector worker, according to official figures.

The Office for National Statistics (ONS) reportstressed the difficulties in reaching the figure, including the problems of matching skills and jobs.

The figure for April 2011 compares with a gap of 7.8% in 2010 and 5.3% in 2007.

It excludes self-employed people and non-cash remuneration such as pension contributions and health insurance.

Wales widest

The chancellor said in his Budget last week that he was looking into how to make public sector pay reflect the going private sector rate in particular areas.

"Some departments will have the option of moving to more local pay for those civil servants whose pay freezes end this year," George Osborne said.

The Institute for Fiscal Studies estimated that the pay gap in Wales was 18%, while in the South East of England, men in the public sector were paid 1.4% less on average than their private sector counterparts.

ATreasury reportsaid that private sector pay was much more sensitive to differences in local labour markets and prices than the public sector.

No bonuses

Among the other differences highlighted by the ONS between the public and private sectors was that about 40% of public sector workers have a degree or equivalent qualification, compared with about 25% in the private sector.

Also, the gap between the highest and lowest paid workers is higher in the private sector, with the top 5% of earners paid 5.7 times more than the bottom 5%, compared with 4.5 times in the public sector.

Public sector workers are older on average than private sector workers, and earnings tend to increase with age and experience.

Finally, because the figures cover April, they do not take account of many bonuses in the private sector, which tend to be paid earlier in the year.

"The analysis would be more accurate if all the bonuses paid out to private sector employees - especially the sky-high payouts made to top bankers in the first three months of the year - were included," said Brendan Barber, general secretary of union umbrella body, the TUC.

"The figures show that graduates tend to earn more in the private sector, whereas people with lower skill levels will have slightly higher salaries if they work in the public sector."

'Don't be fooled'

Employers' organisation the CBI stressed that the average pay figures do not make direct comparisons between specific jobs in each sector.

"Nevertheless, it is clear that public sector pay is still considerably higher than pay in the private sector," said Neil Carberry, CBI director for employment.

"We need to ensure that public sector salaries reflect local labour market conditions, by putting pay decisions into the hands of individual employers at the local level."

The public sector union Unison pointed out that many of the lower paid jobs in the public sector have now been privatised, such as catering and cleaning, so that staff were working in the public sector but counted as part of the private sector.

"Don't let anyone be fooled into thinking that public sector workers are enjoying high wages," said Unison general secretary Dave Prentis.

"Millions of public service workers are being hit by the government's pay freeze."