Ignorance

And paying staff more is part of that necessary spending. Public sector employees have done very badly over the last decade and have seen their real pay fall significantly. You cannot supply decent public services on the back of underpaid and demotivated staff directed by politicians who continually tell them they are not worth what they’re paid when the public very clearly disagrees with that view.

Has public sector pay fallen – if it has ta all – by more or less than private sector pay over this past decade? Actually, by less. So, why should they get that more then?

20 comments on “Ignorance

  1. Total public sector remuneration has actually surged ahead, as the value of their defined benefit pensions have risen significantly. Private sector pension values on the other hand have plunged.

    Yet each party has pretty much pledged to maintain this pension chasm or make it worse, especially Labour.

  2. ‘You cannot supply decent public services on the back of underpaid and demotivated staff’

    Nor will they provide them with overpaid and motivated staff.

    ‘directed by politicians who continually tell them they are not worth what they’re paid’

    Rilly? Name one. Use of the plural is hyperbole.

    ‘when the public very clearly disagrees with that view.’

    Need a reference for that.

    Murph is so full of sh!t that his eyes are brown.

  3. What PT says. Public sector pensions are low-hanging fruit for the chancellor to reform. I’m amazed that nobody has tried yet. Presumably their civil servants keep dissuading them.

  4. Could someone explain to me how public sector pensions work? There appear to be legal entities that call themselves pension funds (various different ones for teachers, policemen, civil servants etc) but they don’t appear to have any assets. Am I right in thinking every public sector pension fund works on a cash in/cash out basis? That is to say the teachers of today pay in their contributions, as does the employer (ie the State) and the ex-teacher pensioners of today get paid out of that cash flow? There’s no actual investment in assets producing income?All Public Sector pension scheme are Ponzi schemes, rather like the national pension scheme, just on a smaller basis?

  5. Jim – it varies from scheme to scheme. Some do have investment assets. In particular the local government pension scheme was well-known for being largely funded (although I think that too has degraded in recent years thanks to falling interest rates).

    Many don’t have investment assets. Legally they have assets, but these are basically just an IOU from government promising to pay cash when needed (this fine distinction sometimes confuses people who believe these scheme are funded, when they not).

    Also, different institutions have changed schemes over time, so it can be a mix even within one institution.

    But overall, yes there is a vast funding gap.

    The public sector pensions are still pretty obscene. It’s not just the pay, but it’s all the T&Cs as well – inflation protection, spousal pensions, the fake capitalisation rates used to assess the pension rights under the lifetime allowance etc.

  6. Local government pension funds tend to be funded as they are the inheritors of schemes set up in the 1880s and 1890s when local government started being properly put in place. Teachers pensions are less likely as they tend to be schemes set up in the grand post-WW2 expansion of education, which was also the time of the expansion of the assumption that the Governement would do everything.

    I’ve got my grandma’s 1980s teacher’s pension documents somewhere, as well as her grandmother’s Friendly Society pension documents from the 1940s.

  7. @Jim “That is to say the teachers of today pay in their contributions, as does the employer (ie the State) and the ex-teacher pensioners of today get paid out of that cash flow?”

    Nope. Both the contributions and pensions are part of general funding. If every public sector worker were sacked today there would be nothing coming in but the pensions would still keep flowing out.

    There’s no direct link.

    As mentioned elsewhere, local government pensions are mostly funded but with huge funding shortfalls. These will be exacerbated by batshit crazy investments in green technology by councils.

  8. I, for one, am fully in favour of all public sector pension funds being invested in Captain Potato’s New Green Investment Funds. Every penny. Wishing them all the best in their happy retirements.

  9. I have a relative who was for 12 years a public sector employee, on a fast-track scheme. Two years here, two years there, and was given a tax-payer funded OU degree MBA which was then parlayed into private sector consulting work deploying the contacts earned over the previous 12 years further to mulct the taxpayer, to the extent that current earnings are about £250,000 a year, and promise more or less to stretch to four times as much before too long.

    I am reliably informed by this relative that the face value of the 12-years’ worth of pension ‘contributions’ was, at the point of resignation, £600,000.

  10. If public sector employees are doing so badly they’ll all be leaving in droves and getting jobs in the private sector because as well all know they’re much better than the private sector, leaving lots of job vacancies as evidence of that poor pay. Anyone seen it?

  11. His case is proven by the dedication and service Britain’s surprisingly well-paid train and tube drivers provide to the general public.

  12. @ Rob
    The train drivers are almost all, nominally at least, “private sector”. Pushing up the average for private sector pay. TUPE rules have left the RMT’s stranglehold largely in place despite privatisation – albeit SWR’s ability to provide a skeleton service during an official strike is an encouraging sign that some rail workers have shed or, having jined in the last couple of decades, chosen not to acquire their shackles.

  13. @ BiND
    My physiotherapist left the NHS for private practice, but it wasn’t for more money, it was because he cared about doing a good job and healing his patients. He groans every time he mentions NHS management (the system, not just the bureaucrats within it).

  14. the bus drivers are threatening to strike as they aren’t happy with the $33 an hour pay they currently get

  15. @Edward Lud

    I find the £600k figure somewhat unlikely. I was an HMIT fast-track recruit in 1987, stayed for 10 years. My civil service pension pot was given an actuarial value of c£140k when I was 55 (2 years ago).

    Not bad as it was non-contributory.

    But it would be going some to build up £600k in 12 years.

  16. @Andrew C

    Additional Voluntary Contributions matched by employer probably. I did that in my first post-Grad job (private sector)

    Subsequent employers didn’t offer that option. Then Brown taxed & killed pensions in 1997

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