Treasury considers local pay flexibility

Greater local pay flexibility is being
considered for public sector workers as part of the comprehensive
spending review, a spokesperson for the Treasury confirmed last
week.

“We are not trying to unpick nationally
negotiated arrangements, but we are trying to see whether local
flexibility can help where there are areas of problems,” he said.
“This already happens in schools, hospitals and prison
services.”

Work and pensions minister Nick Brown is
leading the work on labour market practices, and the outcomes will
be included as part of the spending review.

The Treasury spokesperson confirmed that, as
part of the process, existing flexible pay schemes in the private
sector were being looked at, particularly in relation to their
impact on recruitment and retention.

“It is sensible to be looking at what other
people are doing in this area, the options they have used and how
successful they have been,” he said.

It is understood that the flexible pay systems
employed by retail companies Next and Safeway are both under
consideration. Next uses geographical pay zones ranging from
provincial towns to central London, and Safeway operates a pay
banding system. Both allow individual stores to adjust pay levels
according to local labour market pressures.