CBI criticises 'old-fashioned' pay deals for public sector workers

The CBI has launched a scathing attack on public-sector pay and pension deals, accusing the Government and other state-backed employers of clinging to human resources practices from "a bygone age".

John Cridland, the business group's deputy director-general, said national pay bargaining rounds for public-sector workers, including teachers, doctors and firemen, offered little incentive for staff to improve the quality of services. "National pay bargaining encompassing a disparate range of roles belongs to a bygone age," he said. "It ignores external market rates for comparable jobs and doesn't encourage workers to go the extra mile or reward star performers."

The CBI warned that public-sector employers had yet to get properly to grips with the mounting expense of occupational pension schemes, and said taxpayers would end up "saddled with excessive costs".

A report published by the CBI today claimed the idea that public-sector workers were paid less than their private-sector counterparts was a myth. Its figures showed the median rate of pay in the public sector was 15 per cent higher.

The report called for the Government to introduce pay negotiations organised locally and to take more account of performance when settling individual claims.

The TUC rejected the report as "an attack on the public sector and its fundamental values". It said the pay comparisons were meaningless because public-sector workers included a greater proportion of highly skilled and qualified staff.

The TUC's general secretary, Brendan Barber, said: "It seems the CBI wants individual nurses competing with each other for bonuses, rather than working together for the good of patients."