Share of Welsh workforce in the public sector reaches historic low
19 June 2019
The share of the Welsh workforce employed in the public sector has reached a historic low.
In its latest report, Cardiff University’s Wales Governance Centre reveals that in 2018, 20% of employees in Wales were working in the public sector, down from a peak of 27.4% in 2009.
While the number of people working in the NHS has risen, there have been significant reductions of those employed in local government. The NHS now accounts for the largest proportion of Welsh public sector pay, overtaking local government for the first time in 2016-17.
Unlike other areas of the UK, Welsh public sector workers earn more than private sector workers. In 2017-18 in Wales, average annual earnings were £3,413 (13.5%) higher in the public sector, while on a UK-wide basis, average annual earnings were £2,252 (7.7%) greater in the private sector.
Although the proportion of those in Wales employed in the public sector has fallen, it is still higher than the overall UK figure, which is 16.6%.
Cian Sion, Wales Fiscal Analysis research assistant said: “The percentage of the Welsh workforce employed in the public sector is considerably lower than a decade ago. This is an inevitable symptom of squeezes on public spending.
“But our research shows that it still remains a particularly important source of employment here. While earnings in the private sector lag behind the rest of the UK, the public sector provides a large number of well-paid, highly skilled jobs.”
The report, The Public Sector in Wales, also shows:
- Between 2005-06 and 2017-18, the number of full-time equivalent teachers declined by 2,493 (9.5%), while the number of teaching assistants increased by 9,336 (193.6%), reflecting the introduction of the Foundation Phase curriculum.
- Women are 28 times more likely to be employed as a teaching assistant in the primary sector than men. Meanwhile, the share of male qualified teachers and teaching assistants fell from 25% in 2005-06 to 18.8% in 2017-18.
- In 2017-18, the Welsh Government and local authority pay bill amounted to £7.8bn. NHS public sector pay stood at £3.63bn, or a 46.3% share, while local government was at £3.55bn, or a 45.4% share.
- In 2017-18, the combined workforce of NHS Wales’ local health boards and trusts was 79,916. Staff numbers in NHS trusts increased by 3,021 (or 56%) between 2009-10 and 2017-18. Employees in local health boards climbed less sharply by 2,914, or 4.2%.
- Spending on agency staff in the NHS nearly has nearly doubled since 2009-10. In 2017-18, £107.4m was spent across NHS Wales and NHS Trusts, which was 4.3% of total employee costs, up from 2% in 2009-10. This is despite agency staff only making up 1.8% of the total workforce. At its height in 2016-17, spending on agency staff amounted to £162.1m.
- Local government employee costs have sunk significantly since 2009 and the reduction has been steepest in areas related to planning and economic development (27%) and culture, heritage and libraries (26.4%).
- The number of Welsh Government employees fell by 534 (9.6%) between 2014-15 and 2017-18. Spending on salaries as a share of employee costs has fallen from 75.7% to 73.4% between 2014-15 and 2017-18.
Cian Sion added: “As Wales takes on historic new tax powers along with the ability to determine teachers’ pay, this is a useful time to take stock of how the public sector pay bill is changing.
“The recent lifting of the public sector pay cap and increasing pension costs means there are significant cost pressures ahead. Serious decisions will need to be made about how to maintain and develop this hugely important lifeline to the Welsh workforce.”