Pay gap between public and private sectors ‘widens’

The pay gap between workers in the public sector and those in the private sector has widened, statistics show.

Public sector employees were paid 7.8% more on average than private sector staff in April 2010, the Office for National Statistics (ONS) said.

This was a bigger gap than the 5.3% difference in 2007, the figures show.

Other benefits such as bonuses and pensions could alter the gap. The ONS added that many lower skilled jobs had been outsourced to the private sector.

Other factors that could account for commanding higher pay were the average age of public sector workers, and their qualifications.

The statistics are likely to feed into the debate and dispute over public sector pensions, which led to a walk-out by teachers and some other public sector workers last week.

Timing

The analysis is drawn from two pieces of research from the ONS about pay and the UK workforce.

Simon Gompertz Personal finance correspondent, BBC News

Critics of the public sector will be grinding their teeth at the sight of the pay gap widening even further.

This is extra ammunition for those calling for cuts and lower pensions.

However, the bald figures come with a health warning.

After years of contracting out, staff are more likely to be teachers or nurses than cleaners and caterers and many more have degrees.

Statisticians have to try to adjust for that.

Plus, they warn that most private sector bonuses and perks are not counted and nor are self-employed lawyers, businessmen and entrepreneurs.

It does not include some factors that could influence people’s remuneration and standard of living, such as pension contributions, company cars and health insurance.

The timing of the research, related to April, meant that payments made in the bonus season of January to March were ignored – as were the earnings of the self-employed.

Key to the difference in pay was the higher proportion of higher-paid jobs in the public sector, the ONS said.

Over the past 10 years, the trend for low-skilled jobs to be outsourced to the private sector has continued, pushing up the average wage among public sector workers.

The public sector also employed a larger proportion of older workers, whose pay has increased over time.

In 2010, some 38% of workers had a degree or equivalent qualification in the public sector, compared with 23% in the private sector.

Comparing the pay of these graduates flips the pay gap around, with public sector workers earning 5.7% less than those in the private sector.

Within the two sectors, the gap between the highest earners – in the top 5% – and the lowest 5% of earners is greater in the private sector than in the public sector.

“What the figures show is that the public sector is fairer than the private sector,” said TUC general secretary Brendan Barber.

“Public sector high-flyers are paid 6% less than those at the top of the private sector, while those in less skilled jobs on lower pay earn 6% more in the public sector.”