National public sector pay to remain

Autumn Statement 2012: The government has accepted the recommendations of local pay bodies in the public sector that there should be no centrally determined local pay rates or zones.

The Prison Service Pay Review Body and NHS Pay Review Body instead recommended making greater use of existing flexibilities when setting pay.

In his presentation of the Autumn Statement, Chancellor George Osborne said: “We commit to implement these reports.

“This means continuing with national pay arrangements in the NHS and Prison Service, and we will not make changes to the civil service arrangements either.”

Daniel Hibbert, a partner at Mercer, said: “The Pay Review Bodies have largely rejected the government’s proposals for regional pay, and the government has accepted that regional pay will be very difficult to implement on the basis it had previously envisaged.

“Going forward, we can expect to see more flexibility in the operation of national pay frameworks, but without the more radical ‘top-down’ changes that the government had once hoped to impose.”