North-South pay gap is widening.

Byline: By JEZ DAVISON

TEESSIDE employers must offer more attractive overall packages to retain the region's best employees.

That was the warning from Gary Watson of recruitment firm New Group following news today of a yawning pounds 10,000 pay gap between North and South - up 2% on last year.

According to the survey conducted by ReThink Recruitment, the average salary for staff in the North of England is just over pounds 19,000 compared with pounds 30,600 in London.

Mr Watson, who supplies most of the workers to Teesport said: "The higher living costs in London and the South do not balance out this discrepancy in pay, which is recognised widely across the country. Although incomes are increasing in the North-east, the region lags behind its southern counterparts in other areas such as property values and academic achievement.

"To retain capable staff, employers need to offer more attractive packages with added incentives such as flexible working options, excellent training and a definitive career path as well as a good salary."

The survey, however, also said that some sectors were actually outperforming their southern equivalents.

For example, wages for computer staff in theNorth are growing almost a third faster than in London, it claimed.

Jon Butterfield, managing director of ReThink Recruitment, said that the IT industry's move towards remote, flexible working is eroding traditional geographical constraints such as the North-South divide.

He said: "So much work can now be accomplished offsite that the IT workforce is becoming increasingly dispersed."

The report predicted that the pay divide would narrow as more firms and Government departments relocate from London or expand in other regions.

Mr Watson continued: "There have been plenty of instances where people have relocated to the North-east from the south. However, employers are finding that the region does not have a skills surplus and some sectors, such as the call centre and haulage industries, are finding it more difficult to find people with the requisite skills."

Average pay rises have risen to 4% in recent weeks, up by 0.6% from last month, fuelled by higher inflation, a report said Friday.

Research by pay analyst Incomes Data Services (IDS) showed that last November's 4.3% retail prices index triggered a number of high-level wage increases in long-term pay deals.

Network Rail paid 4.8% to around 7,500 maintenance workers on January 1 in the second year of a 21-month deal, while 40,000 electricians received a 4% increase.

Inflation-linked pay rises, together with the higher increases awarded from last November in sectors such as the motor industry, explained the rise in the rolling three-month average figure from3.4% inDecember to 4% in the threemonths to the end of this month, said the report.

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