Scottish public sector workers are the ones who have seen the largest pay rises in the UK.
The Institute for Fiscal Studies’ (IFS) figures show that the public sector salary in Scotland has increased by 5% since 2019. However, there has not been any growth anywhere else in the country.
The Scottish government and local councils have negotiated deals with the NHS and school staff in Scotland, and in other areas of the devolved sector. These agreements are larger than the ones offered in the rest of the UK.
In the fourth chapter of IFS’s third annual Scottish Budget Report, ‘Scottish Public Sector Employment and Pay’, it was noted that newly qualified teachers in Scotland earn PS33.594 per year, compared to PS31.650 in most areas of England (6.1% higher), while newly-qualified nurses in Scotland are paid on average PS31.892, while they are paid PS29.970 in most of England (6.4% greater).
Data shows that 22% of Scotland’s workforce, or around 590 000 people, are employed in public service. This figure is lower than the figures for Northern Ireland and Wales where they are respectively 26% and 24 %. It is still higher than the 17% reported for England, and any English region.
The study showed that the employment rate in the public sector has increased by 11% or 56,000 since 2017. In the same period, Scotland has seen a faster increase in public sector employment than any other region of the UK except Wales.
The number of workers in the public sector has also increased.
IFS warns that, while Scottish policymakers may have made a “reasonable choice” to prioritize pay in this sector, the increased pay bill in Scotland of PS27 billion per year represents more than half of the devolved daily spending. This poses a growing financial challenge for Scotland’s government.
The organisation insisted that it would have to find money from its own revenues or by cutting spending elsewhere.
It also said that it was unclear what the benefits are of higher pay in the public sector. The Scottish public sector retains more staff than England but the gap is narrowing. There’s no obvious evidence that higher pay increases in Scotland helped to retain workers.
No data exists to prove that pay increases have any positive effect on motivation or recruitment.
Jonathan Cribb is an associate director of IFS, and the author of this chapter. He said, “Scotland not only has increased the number public sector employees more rapidly than other parts in the UK, but it has also increased pay faster.” These are all reasonable priorities for Scotland. However, the Scottish government faces fiscal challenges because the UK funding will not reflect the Scotland-specific decisions.
It’s not clear from the data available that higher pay increases in the public sector have improved retention. The Scottish Government should commission or undertake research to better understand the impact of its pay policy and consider targeting future pay increases where there are clearest signs of recruitment, retention, or motivation issues.
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