Millions are set aside to settle States pay awards

Deals for thousands of staff, including civil servants and public sector employees, have still not been settled for this year after they were put on hold at the start of the pandemic, while no talks have taken place with any of the groups yet about next year.

States finances have been hit by Covid-19 measures, with a £59m. deficit expected this year and £23m. next.

The UK has frozen pay for 1.3 million public sector workers for 2021, but low-paid and NHS staff will get raises, as it looks to control spending with Chancellor Rishi Sunak highlighting a disparity between public sector and private sector wages.

When asked whether it would consider imposing a pay freeze, a Policy & Resources spokesman said:

‘The Policy & Resources Committee is due to have initial meetings to consider the position for pay groups very shortly. Any updates will be communicated directly to employees and union representatives in the first instance.

‘All pay groups, with the exception of two, established staff and public sector employees, have had awards for 2020.

‘Given the previous committee’s decision to suspend any further pay discussions at the beginning of the pandemic, no talks have been held so far with regard to 2021.’

Those groups who settled this year received an extra £10.9m., including £5.8m. for Agenda for Change staff, a group which includes nurses and midwives.

The 2021 Budget Reserve of £17.9m. includes continuation of the provision for unsettled 2020 pay awards and an allowance for 2021 awards.

P&R would not say how much of this was to cover pay awards.

‘At this stage it is not possible to be more specific than the detail provided in the Budget report as this could directly impact future pay discussions.’

The Budget Reserve holds an allocation which it is expected will be transferred to individual committees during the year and funding for contingencies and emergencies.

Last year the Budget Reserve was also used to cover things like the general election and to provide £900,000 to establish the borrowing the States needed as part of the response to Covid-19.

Median earnings in Guernsey generally are up by around 2.5% on last year, although the payroll co-funding scheme was in operation supporting up to 30% of the workforce, and the total number in employment in June of 30,135 was 4.5% down on 2019.

Inflation fell back to 2% in the third quarter and is expected to be 1.5% during 2021.

The central forecast is for the economy to shrink by 6.6% this year when measured in terms of GVA and only bounce back by between 2 and 5% in 2021.

The States meets today to debate the Budget.