The government keeps using pay review bodies as a buffer when it comes to denying public sector workers their requested pay rises.
Health secretary Steve Barclay has refused to discuss increasing workers’ pay with union leaders, claiming that the government has accepted the recommendations from the independent pay review bodies.
But unions are not willing to accept this, and want ministers to sit down with them to negotiate better pay as inflation has soared to 10.7%.
This standoff has triggered more strikes across the country, bringing many public services to a complete halt across December.
So what exactly are pay review bodies? Here’s what you need to know.
What is a pay review body?
There are eight pay review bodies in the UK, which account for 45% (or 2.5 million) of public sector workers.
They negotiate around £100 billion of pay every year, and are made up of HR experts and economists with experience in both public and private sectors.
Those in each body are appointed by the relevant government department.
“The appointments are made on merit and political activity played no part in the decision process,” according to the government’s website.
The government also decides how to pay anyone who sits on these boards – it is £350 a day for the chair, for preparation and attendance at meetings, and £300 for the other members.
The first pay review body was created in 1963 when NHS doctors clashed with the government over salary, before being expanded for other parts of the public sector.
During previous eras of difficult economic activity (such as the high inflation of the 1980s), the pay review bodies were backed by both unions and government.
But, this shared willingness to follow the bodies’ advice seem to be fading.
How does it work?
Each body is supposed to make sure public sector wages are in line with similar private sectors jobs.
It takes evidence from relevant government departments, unions and expert organisations before deciding how pay should change each year. It then advises the government on these changes.
Does the government always follow its advice?
These recommendations are not legally binding, although the government usually just accepts the recommendations.
But, it’s not unheard of for ministers to reject the suggestions – then-health secretary Jeremy Hunt did just that in 2014.
This year, the government claims to have accepts the recommendations about increasing pay from the pay review bodies. The trouble is, this is still significantly below the requested increase from the striking unions.
For instance, unions representing NHS workers have called for a 19% pay increase, while the government has only offered around 4%.
Speaking to BBC Radio 4 on December 21, current health secretary Steve Barclay said: “When we haven’t accepted in full the recommendations of the independent pay review body programmes such as your yourselves have been the first to criticise us.
“When we don’t accept in full the recommendations, we’re criticised for doing so, on this occasion, we have accepted them in full.”
Here’s a quick look at how the government has followed independent pay recommendations in the last 12 years:
So are they independent or linked to the government?
The pay review bodies are appointed by ministers, but claim to still be independent.
Even so, they have to work to the government’s parameters.
The government says what pay award it is aiming for, determines when it will respond to and publish reports of pay review bodies – and is always aiming for the 2% inflation target meant to keep the economy on an even keel.
They are therefore unlikely to recommend something which ministers will only reject.
So it’s not surprising that Pat Cullen, general secretary of the Royal College of Nursing union, claimed that the NHS pay review body is “set up by government, paid by the government, appointed by government, and the parameters of the review are set by government.”
She added: “There’s nothing independent about the independent pay review body.”
How have unions reacted?
Unions have started to suggest they will pull out of negotiations with the pay review bodies due to the tensions around salaries.
Cullen said her union had been “hoodwinked into lending credence to this process for years”.
“The government is using the pay review body for cover and for this exact reason unions like us are seriously looking at whether we take part anymore,” she claimed.
The Unite union has also alleged that the bodies are “not fit for purpose”, while senior sector managers said the “writing is on the wall” for the system.
Similarly, the GMB union, which represents ambulance drivers, has already said it is pulling out of that process and will not provide evidence to the NHS pay review body.
What does the government say?
The Department of Health and Social Care said pay review bodies were staffed by independent industry experts, and still pushes for unions to join next year.
“They base their recommendations on several factors including the economic context, cost of living, recruitment and retention, morale and motivation of NHS staff,” a spokesperson said.
So why can’t the pay review bodies find a balance?
High inflation and years of government austerity means independent pay review bodies are stuck between a rock and a hard place when it comes to making recommendations which will suit both parties.
So it’s not surprising that industrial action is continuing.
Nurses and ambulance workers are already striking, teacher ballots for industrial action are expected in January, and unions are starting to ask if the bodies are still an appropriate means of setting wages.
Public sector unions have lost trust and many are considering boycotting the process, calling for government ministers to sit down for negotiations instead.
The government is also citing fears over a supposed wage-inflation spiral if public sector workers’ salaries are increased.
However, many economists actually think it isn’t wages that will drive the inflation rate but external factors like energy prices.
And, private sector wages in the three months to October grew by 6.9%, compared to 2.7% in the public sector.
“There is no reason pay review bodies should be fine tuning [public sector] wages to affect economy wide inflation,” the Institute for Fiscal Studies’ Ben Zaranko said.
