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Public Sector Employment in Scotland

Marina Hughes & David McPhee, Scottish Executive

Introduction

The publication of the quarterly Public Sector Employment ( PSE) in Scotland series, on 15th July 2005, introduced a major improvement in the methodology and reporting of public sector employment estimates.

This article examines the trends in the PSE in Scotland series and supplements this with further analysis from other sources.

Background

The development of the PSE series stemmed from the demand for better quality inform-ation on public sector employment in Scotland and across the UK. This was flagged up in a number of UK government reviews including the Atkinson Review of Measurement of Government Output ¹, the Allsopp Review of Statistics for Economic Policymaking ² and the Employment and Jobs Statistics Review ³.

The Scottish Executive worked closely with other UK departments to ensure that the definitions used in Scotland were consistent with that used in the UK version of the PSE series. It was agreed by all that the data in the series would, where possible, be based on available administrative sources and on the National Accounts definition of the public sector ⁴. The National Accounts definition does not include General Medical Practitioners ( GMPs) or General Dental Practitioners ( GDPs), as they are defined as self-employed and are in the private sector. This definition also excludes employment in Further and Higher Education, which is in the Non-Profit Institutions Serving Households sector.

Quarterly PSE Series

The latest publication of the PSE series was released on the 13th of September 2006 and covered the time period from 1999 Q1 to 2006 Q2 ⁵.

The statistics in the PSE series are based on administrative records and surveys of individual public sector organisations. These surveys are carried out by the Scottish Executive and the Office for National Statistics ( ONS).

The public sector comprises local government and central government. Central government includes all administrative departments of government, other central agencies, Public Corporations, Non-Departmental Public Bodies ( NDPBs), Armed Forces and the National Health Service ( NHS). The sources of employment data for each of these government sectors are outlined in the Methodology section. There are, however, a handful of central government organisations that cannot be placed into these broad government sub-sectors. These organisations are included in the total but not in any subgroups (a list of these miscellaneous organisations can be found in the Methodology section).

An estimate of private sector employment is also given in the series. This is derived as the difference between the Labour Force Survey employment estimate for the whole of Scotland (not seasonally adjusted) and the public sector estimate.

The diagram below shows how headcount employment for 2006 Q2 can be broken down into the public sector and its broad government sub-sectors. Note that some organisations ae not included in any sub-sector of the public sector, but are included in the total. Details of these can be found in the methodology section.

Source: Quarterly Public Sector Employment in Scotland Series (Not National Statistics)
1 Includes employment of 3,600 from organisations not included in any subsector. Details of this miscellaneous category can be found in the methodology section

Latest Public Sector Employment Trends

Public Sector

This section considers the trends in the Quarterly PSE in Scotland series. The quarterly data are not seasonally adjusted and therefore comparisons between years should only be made for the same quarter in each year.

In 2006 Q2 there were 585,600 employees in the public sector. This accounted for 23.8 per cent of total employment in Scotland. Chart A2.1 shows the growth in public sector and private sector employment since 1999 Q1. Public sector employment in Scotland has increased by 58,300 (11.0%) between 1999 Q2 and 2006 Q2 with the private sector increasing by 116,700 (6.6%) over the same time period. The majority of the growth in the public sector has been driven by increases within local government and the NHS, which have increased by 30,300 and by 21,900 respectively since 1999 Q2.

In the last year public sector employment has increased by 4,700 (0.8%) while the private sector has only increased by 2,300 (0.1%). The growth in the public sector over the year has been mainly within health and local Government, including teachers and police. Employment in health and local government increased by 3,700 and by 2,100 respectively over the last year.

Chart A2.1: Employment in the public & private sector. 1999 Q1 - 2006 Q2

Source: Quarterly Public Sector Employment in Scotland Series (Not National Statistics)

Chart A2.2 shows that the majority of public sector employment in Scotland is within local government with 50.4 per cent employed by local government in general and a further 5.2 per cent employed by police, fire and related services. The NHS employs 25.9 per cent of public sector employees in Scotland, with the Civil Service employing only 9.0 per cent of public sector employees. The remaining 9.5 per cent of workers are employed by the Armed Forces, NDPBs and Public Corporations.

Chart A2.2. Breakdown of public sector employment in Scotland, 2006 Q2

Source: Quarterly Public Sector Employment in Scotland Series (Not National Statistics)

Public sector employment in Scotland accounted for 23.8 per cent of total employment in 2006 Q2. This was higher than the proportion for the UK as a whole which had 20.2 per cent of workers employed within the public sector. Chart A2.3 shows data on the proportion of public sector employment in a selection of countries around the world ^{6, 7}. This shows that Scotland has a relatively average proportion of public sector employment compared to these countries. Notably Nordic countries such as Norway, Sweden and Denmark have higher proportions of public sector employment than Scotland.

Chart A2.3: International comparisons of public sector employment rates, 2004

Source: International Labour Organisation, UK & Scotland Public Sector Employment Series

Local Government

Local Government employment is made up primarily of "other" Local Government ⁸ (37.3%). The largest single staff group in Local Government is teachers, which make up 19.8 per cent of the sector with other education staff, which includes classroom assistants as well as other school staff, making up a further 16.2 per cent of the sector. Social work staff account for 17.4 per cent of the sector with police and fire making up the final 9.3 per cent (Chart A2.4).

Chart A2.4: Breakdown of local government in Scotland, 2006 Q2

Source: Quarterly Public Sector Employment in Scotland Series (Not National Statistics)

Since 1999 Q2 all areas of Local Government have seen an increase in employment except "other" Local Government which has seen decrease of 3.7 per cent. The largest proportion increase was in other education staff, which has risen by 52.4 per cent since 1999. This was mainly driven by an increase in teaching assistants. There were also increases in police and related services (19.0%), social work services (18.7%), teachers (6.5%) and fire and related services (3.8%) (Chart A2.5).

Chart A2.5: Local government employment in Scotland, 1999 Q1 - 2006 Q2

Source: Quarterly Public Sector Employment in Scotland Series (Not National Statistics)

Local Government is female dominated with 66.7 per cent of employees being women. However, this differs by staff group with 86.4 per cent of 'Education - Other' staff being female but only 15.5 per cent of fire and related services staff. The majority of women in Local Government work part time with 35.5 per cent of all Local Government staff being female part time workers compared to only 4.2 per cent of Local Government staff being male part time workers (Chart A2.6).

Chart A2.6: Local government employment in Scotland by gender & work pattern, 2006 Q2

Source: Quarterly Joint Staffing Watch Survey (Not National Statistics)

Central Government

Central government includes the Civil Service, Armed Forces, NDPBs, Public Corporations and the NHS. However, for the purposes of this article the NHS will be excluded from central government and will be covered separately in the next section.

Chart A2.7 shows the breakdown of central government employment, 48.7 per cent of central government employment is within the civil service (one third of which is the Scottish Executive and Associated Agencies). Public Corporations account for 25.2 per cent of central government employment with NDPBs and Armed Forces accounting for just 13.6 per cent and 12.5 per cent respectively.

Chart A2.7: Breakdown of central government in Scotland, 2006 Q2

Source: Quarterly Public Sector Employment in Scotland (Not National Statistics)

Chart A2.8 shows headcount and Full Time Equivalent ( FTE) employment in central government since 1999 Q1. The chart shows that FTE central government employment has increased by 4,700 (4.7%) since 1999.

Chart A2.8: Central government employment in Scotland, 1999 Q1 - 2006 Q2

Source: Quarterly Public Sector Employment in Scotland Series (Not National Statistics)

Chart A2.9 shows that the largest proportion increase since 1999 has been within NDPBs (36.3% increase since 1999). The increase in employment within NDPBs is the result of some fairly major changes in the number and makeup of NDPBs. Within Scotland there are a selection of NDPBs and Public Corporations which are sponsored and controlled by the Scottish Executive but there are also a number of employees of UKNDPBs and Public Corporations who work in Scotland. Since 1999, 13 SE sponsored NDPBs with staff have been disbanded. Within this period 12 new SE sponsored NDPBs have been created and 2 bodies have been re-classified as NDPBs from another part of the public sector. The majority of the increase of staff within NDPBs has been caused by small increases in many of the NDPBs which existed in 1999 and still exist rather than through the creation of new NDPBs.

Chart A2.9: Breakdown of central government employment in Scotland, 1999 Q1 - 2006 Q2

Source: Quarterly Public Sector Employment in Scotland Series (Not National Statistics)

NHS Employment

Employment within the NHS has increased considerably since 1995 but particularly since 1999 with an increase of almost 17,000 staff (12.5%). There has been an increase in all areas of the NHS with the largest proportion increase within the therapeutic, healthcare science, technical, pharmacy and ambulance staff group (27.8%). The largest increase in level of employment was within the administrative and estates staff group which increased by over 7,000 staff. Medical and dental staff also increased by 15.3% and nursing and midwifery staff increased by 6.8% since 1999 (Chart A2.10).

Chart A2.10: Employment within NHS in Scotland, 1995 - 2005

Source: ISD Scotland

The majority of staff within the NHS in Scotland are female (77.9%). However this differs within the different staff groups with about 40 per cent of HCHS⁹ medical and dental staff being female and almost 90 per cent of nursing and midwifery staff being female. Only 2.4 per cent of employment in the NHS consists of males who work part time but 37.4 per cent of NHS employment is made up of females who work part time (Chart A2.11).

Chart A2.11: Gender and work pattern breakdown of NHS staff, 2005

Source: ISD Scotland

According to the National Accounts definition of public sector General Medical Practitioners ( GMPs) and General Dental Practitioners ( GDPs) are not considered part of the public sector as they are considered to be self employed. However, GMPs and GDPs do provide a very important service to the public so it is important to consider how employment in these groups has changed over time. Chart A2.12 shows that the numbers of GMPs and GDPs have risen since 1995. Since 1999, GMPs have risen by 6.3 per cent and GDPs have risen by 13.2 per cent. The increases over the last year have been particularly marked (an increase of 2.1% for GDPs and an increase of 5.1% for GDPs over the last year).

Chart A2.12: GMP & GDP employment in Scotland, 1995 - 2005

Source: ISD Scotland

Previous Sources of Public Sector Employment

Prior to the development of the quarterly PSE in Scotland series the main source for public sector employment was the Labour Force Survey ( LFS). The LFS is a self reported survey of UK households which provides overall estimates of employment in the UK. Data on public sector employment from the LFS is dependent on the respondent's decision on whether they work in the public sector or not. This leads to the LFS over-estimating the size of public sector employment as it includes people who believe they work in the public sector when in fact they work for a private sector company which is contracted to do work in a public sector building. An example of this is a cleaner in a school who is employed by a cleaning firm which has a cleaning contract with the school. Also those who work in the FE and HE sector would be included in this estimate if they report themselves as working for the public sector.

The latest data from the LFS estimates that there are 693,000 workers in the public sector in Scotland compared to 585,600 from the official PSE in Scotland series. This is a large difference and in fact the problems with the LFS estimate for public sector was one of the driving forces behind the development of a more accurate measure of public sector employment. Although the LFS is known to over-estimate the size of the public sector, it is still a very useful and rich source for comparing the make-up of the public and private sector, later in this article the LFS is used to provide an occupation and qualification breakdown of the private and public sector.

It is also possible to estimate public sector employment using employee jobs data from the Annual Business Inquiry ( ABI). This method uses Standard Industrial Classification ( SIC) codes to allocate employee jobs to specific industries. Using this method to measure public sector employment has problems caused by the fact that the breakdown of industries does not allow a split of public and private employment within education. It is also not easy to obtain a public and private split for the Health service as this is based on a detailed breakdown which is not publicly available. Using the ABI employee data gives an overall estimate of the public sector of 608,000 employee jobs. This is still higher than the official estimate of public sector employment but is not quite as high as the LFS estimate. The differences will be mainly caused by the inability to strip out private employment within the education and health industries.

Public and Private Sector Earnings

The Annual Survey of Hours and Earnings ( ASHE) is the official source of pay estimates ¹⁰. The survey is carried out by ONS and covers one per cent of all employees. The ASHE can be used to look at the gap between public and private sector earnings.

In Scotland, in April 2005, private sector median gross weekly earnings were £374.60, lower than the public sector earnings of £464.20 (resulting in a gap of £89.60). Private sector mean gross weekly earnings (£459.30) were also lower than those for the public sector (£516.70) but the gap was smaller (£57.40). This reduction in the gap when using the mean is because of the skewed distribution of high earners in the private sector; the mean is more easily biased by high earners than the median.

Chart A2.13 shows public and private sector median gross weekly earnings from April 1997 to April 2005. Over the period public sector median gross weekly earnings grew quicker than private sector median gross weekly earnings (38.1 per cent compared to 30.7 per cent). Thus the pay gap between the private sector and public sector has increased over the period from 14.7 per cent in 1997 to 19.3 per cent in 2005 (the pay gap is measured as the percentage difference between public sector earnings and private sector earnings so in 2005 employees in the private sector earned 19.3 per cent less than employees in the public sector).

Chart A2.14 shows the pay gap between the public sector and private sector for all employees, male employees and female employees. The gap is clearly wider for women than men. In April 2005, median gross weekly earnings for full-time women private sector employees was £297.10 compared to £444.80 for women public sector employees, that is private sector women's earnings were 66.8 per cent that of public sector women's earnings (representing a gap of 33.2 per cent).

Public and Private Sector Occupations and Qualifications

Chart A2.13 showed that public sector earnings were higher than private sector earnings generally. This difference in pay can be explained, in part, by the occupation and qualification mix being very different in the public and private sectors.

The latest LFS figures show that 34.5 per cent of employees in the private sector are in the top three high earning occupation groups (Managers and Senior Officials, Professionals and Associate Professional and Technical) compared to 51.5 per cent of employee in the public sector (Table A2.1). This goes some way to explaining the overall gap of 19.3 per cent between public and private sector earnings.

Chart A2.13: Median gross weekly full-time earnings by sector Scotland, April 1997 - April 2005

Source: Annual Survey of Hours and Earnings

Chart A2.14: Public/private sector pay gap of median gross weekly earnings of full-time employees Scotland, April 1997 - April 2005

Source: Annual Survey of Hours and Earnings

Table A2.1: Distribution of occupation of employment in Scotland, 2006 Q2

Source: Labour Force Survey, 2006 Q2

Table A2.2 shows the gap between the public and private sector earnings by occupation. The table shows that the gap between public sector and private sector pay narrows when looking at the broad occupations of employment. Managers and Senior Officials in the private sector earn 9.9 per cent less than those in the public sector. Whereas for the professional occupation group those working in the private sector earn 5.2 per cent more than those working in the public sector. There will be differences in the exact jobs that make up the broad occupation groups so the gap in gross weekly earnings do not necessarily reveal differences in rates of pay for comparable jobs.

Table A2.2: Median gross weekly pay of full-time employees by occupation and sector of employment in Scotland, April 2005

Source: Annual Survey of Hours and Earnings, 2005
Full-time employees on adult rates whose pay for the survey period was not effected by absence.

Also, the qualification mix for those working in the private sector differs considerably to that of those working in the public sector. The latest LFS figures show that 32.3 per cent of those employed in the public sector have degree level qualifications compared to 16.1 per cent of those in the private sector (Table A2.3).

Table A2.3: Distribution of qualifications, Scotland, 2006 Q2

Source: Labour Force Survey, 2006 Q2

Conclusion

The introduction of the quarterly PSE in Scotland series allows public sector employment in Scotland to be measured consistently over time and accurately. The series also allows comparisons against that of the UK.

The size of the public sector is lower than previously estimated through sources such as the Labour Force Survey and the Annual Business Inquiry. Although other surveys are known to over-estimate the size of the public sector they are still a very useful tool when looking at the different characteristics of public sector workers.

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