TAX hikes will not be necessary to cover a 7.9% pay rise for public sector employees, the Treasury Minister has said.
Deputy Ian Gorst said that there was ‘sufficient money’ within the government’s approved spending plans to fund the pay awards but did not reveal where £10 million in agreed savings in each of the next four years would be made.
He was speaking after leading business figure Kevin Keen raised concerns over the rise and warned that employers may have to consider cutting staff numbers or other costs if they felt pressure to emulate the increase for their staff.
Deputy Gorst said he was ‘confident’ that the government would not need to raise taxes to fund the pay increases.
In December, the States Assembly approved the Government Plan, which acts as the public spending blueprint for the next four years.
The Treasury Minister said: ‘In the Government Plan… we had the budget allocations for this year. There are reserves put aside to fund pay rises and other contingencies through the year.
‘The States Employment Board has been negotiating with various pay groups – some pay groups have settled and there are still ongoing negotiations.
‘There is sufficient money allocated within the Government Plan to fund a pay settlement across the pay groups at 7.9%.
‘The Government Plan was agreed by the States in December and if we live within those parameters – which I am very committed to doing – there are no plans within that Government Plan to raise taxes.’
The Prospect and Unite unions, which represent around 3,500 government employees between them, voted overwhelmingly to accept an offer of 7.9% – below the current inflation rate of 10.4% – from the States Employment Board.
The police have also voted to accept an identical increase, while negotiations with other pay groups – such as teachers – remain ongoing.
Further talks between the teaching unions and the SEB are due to take place this week, while the Royal College of
Nursing has confirmed it is putting an unspecified offer to its members.
In October, chief executive Suzanne Wylie said the government would undertake a series of ‘value for money’ productivity reviews to bring public spending back under control, to help make £10 million of savings a year for the next four years.
The Government Plan also includes £30 million of ‘necessary and contingent funding’ to recover from the pandemic this year.
