Tough times ahead make pay reform a priority for the public sector

To illustrate this, on the day that inflation rose to 2.9%, the local government employers announced a pay freeze for millions of council staff. The employers are feeling the pressure of funding pension schemes as well as a squeeze on budgets and services.

Most commentators agree there will be big reductions in public spending, whether it's sooner or later is the debate. These will go beyond efficiencies and politicians have said that there will be ‘cuts'. I presume this means in both jobs and services. Many public-sector organisations are considering how they can be more innovative than ever before to rise to the huge challenges ahead. Radical solutions might mean new relationships with citizens, joining up with public-sector partners and a clear focus on only those services that can demonstrate they add value for their cost.

Public-sector HR teams will need to ensure that we have healthy organisations that can recruit, retain and motivate the skilled professionals we need to manage these transformations. There may be fewer of them, but we will need high quality people who can thrive in a changed world. Pay and reward needs will be fundamental to this.

The Public Sector People Managers' Association (PPMA) advocates taking a fresh approach in those parts of the public sector where pay and conditions haven't changed much for decades. So we need to move away from automatic pay increases and move to paying for performance. We need to do away with outdated pay supplements and pay in line with the market. None of this thinking is new: people and government have been calling for change for at least five or six years.

One of the PPMA's big challenges on pay and reward for the next 12 months is to keep reminding the sector that the tough times ahead demand action on pay reform. The other main challenge is to help guide the way for what this might mean in practice and show how public-sector colleagues can get there."

Mike Cooke is HR director at London Borough of Camden and lead officer on Pay and Reward at the PPMA