The public sector could face difficulties attracting top talent following the Chancellor’s introduction of a pay rise cap, according to Dean Shoesmith, president of the Public Sector People Managers’ Association and HR director at Sutton and Merton Council.

The Chancellor confirmed in the 2010 Budget Report that public sector pay rises will be capped at 1% for the next two years and that the sector will have to make efficiency savings of £11bn.

Shoesmith told Recruiter: “It depends on how the economy is faring and the retail price index. Pay awards are normally linked. If inflation is running at less than 1%, a 1% deal is generous. The rate of inflation has been variable and difficult to predict.

“It will also depend on pay levels in the private sector. If inflation is running over 1% and the private sector is paying over 1% in pay rises, it may affect our ability to recruit top talent, of hard to fill talent of key professionals in managerial leadership positions.

“However, often it is not just about pay. People join the public sector for altruistic reasons, to make a difference.”