Scottish Public Sector Pay Rises Outpace Rest of UK, Raising Budget Concerns

Public sector workers in Scotland have received significantly higher pay increases than their counterparts elsewhere in the UK, placing added strain on the Scottish Government’s budget, according to new research from the Institute for Fiscal Studies (IFS).

The analysis reveals that Scottish state employees’ wages have risen by 5% above inflation since 2019, while public sector workers in the rest of the UK have seen no real-terms increase. This wage growth has coincided with a rapid expansion of the Scottish public sector workforce, further increasing financial pressure on Holyrood.

Rising Costs and Expanding Workforce

Since 2017, the number of public sector employees in Scotland has grown by 11%, equating to an additional 56,000 workers. As a result, the Scottish Government’s annual wage bill has soared to £27 billion, with state employment now accounting for 22% of Scotland’s total workforce, compared to 17% in England.

The IFS report highlights several public sector roles where Scottish salaries outstrip those elsewhere in the UK:

• Newly qualified teachers in Scotland earn £33,594, roughly £2,000 more than the £31,650 offered in most of England.
• Newly qualified nurses in Scotland start on £31,892, compared with £29,970 in large parts of England.

Concerns Over Fiscal Sustainability

Jonathan Cribb, an economist at the IFS, warned that the increased spending may not be delivering proportional benefits in staff retention or productivity.

“Scotland has not only increased the number of public sector workers more quickly than other parts of the UK, it has also increased their pay more quickly,” Cribb noted. “While these are reasonable priorities, they add to the Scottish Government’s fiscal challenges, given that funding from the UK Government will not reflect these Scotland-specific decisions.”

With Scotland’s block grant from Westminster fixed, higher pay and an expanded workforce have left Holyrood with difficult choices about how to fund public services in the long term.

Political Backlash

Critics argue that the spending increases are unsustainable and not improving public services at the rate taxpayers would expect.

Craig Hoy, a Scottish Conservative MSP, described the situation as “frankly unaffordable” and accused the Scottish National Party (SNP) of failing to control spending.

“There’s been no attempt by the SNP to rein in spending, to tackle waste on an industrial scale, or to improve public services,” Hoy said.

With Scotland’s budget already under pressure, the debate over public sector pay, government spending, and the sustainability of Scotland’s finances looks set to intensify in the months ahead.