A clear gap between the level of pay settlements in the public and private sectors is continuing, according to the latest data from IDSPay.co.uk. The median settlement level for private sector deals in the three months to the end of September is 2.6 per cent, up from 2.5 per cent in the three months to August. The median in the public sector remains at zero.

There has been a shift away from the ‘normal’ distribution of pay settlements seen since the beginning of the year. While there is still a peak at the middle of the distribution where the median award for the whole economy of 2.4 per cent is located, pay awards at 3 per cent and above are now nearly matched by the number of lower and zero awards on either side of this peak.

Just over half of pay freezes have been recorded in the public sector. Some lower-paid workers in the public sector have received small ‘protection’ increases, mostly worth £250 or between 1.2 and 2 per cent, but these are in the minority. Zero awards have also been recorded in the private and not-for-profit sectors, as have lower awards in the 0.1 to 1.99 per cent range, notably in the fast food, pubs and restaurants sector and parts of manufacturing.

Private sector awards

The median pay award in the manufacturing sector has risen to 3 per cent, up from 2.8 per cent in the three months to August. Only one pay freeze has been recorded in the sector this time, while just over two-thirds (67 per cent) of manufacturing awards are at or above 3 per cent.

The median pay increase in the private services sector has remained at 2.4 per cent. Here, less than a third of increases are at 3 per cent and above, considerably lower than the proportion recorded in the manufacturing sector.

The different experiences of the public and private sectors are shaping the difference between the level of pay settlements between the two sectors. And while pay awards are ahead in the private sector, they are still some way behind inflation, even in manufacturing where pay awards are higher in comparison to other sectors. Our own figures on pay settlement levels appear to reflect official statistics on average weekly earnings from the ONS which also show a gap between the private and public sectors.