Public Sector Pay: Decentralisation v Control

The period since 1979 has seen a radical restructuring of public sector industrial relations. Not only has the size of the sector fallen, from over 30% of the workforce in 1979 to just under 22% in mid‐1993, although the sector still employs 5.4m people (Economic Trends, 1994). There has also been major organisational change. Apart from the major transfers of public sector staff to the private sector via privatisation, those remaining in the public sector — now largely the public services — have been subjected to major organisational changes. These organisational changes have been driven by Government policies based on concepts of financial accountability and market forces to cut waste and improve efficiency. A major concern has clearly been a reduction in public expenditure, the major part of which is salary costs. However, the linkage between the various strands of Government policy concerning the public sector have not always been clear cut — decentralisation and organisational innovation have not always been clearly connected to public sector pay policy. On other occasions changes in reward management have been predicated on organisational changes.