Learn › Economic theory › Work and what it pays

Work and what it pays

How public sector pay is set

Explain how public sector pay is set and its effects across regions

Specification: Edexcel 3.5.3

Ministers ask an independent review body to recommend each pay rise

For large parts of the UK public sector, a pay rise starts with ministers. They send a remit letter to one of eight independent pay review bodies, which cover groups such as NHS staff, doctors and dentists, school teachers, the armed forces, the police and prison staff. Each body takes written and oral evidence from the government, employers and staff representatives, adds its own data and research, and reports with its recommendations. The government then decides. It is not bound by the recommendations and can accept them, reject them or change them.

The award is paid on national scales that barely vary from place to place

Each award is paid on a pay structure set nationally. NHS staff are paid on national pay bands, councils in England and Wales outside London use a national pay spine, and the commonest pattern in government departments is just a London and a national set of bands. Private employers vary pay far more by place, with the cost of living and how attractive an area is. So a nurse where private pay and housing costs are high earns the same as a nurse where both are low, a worse deal in the first town.