Staff attending union meetings this week at QinetiQ’s prestigious research centre at Farnborough and other QinetiQ sites have unanimously condemned QinetiQ’s "discretionary" 2% pay offer as "derisory and divisive". They have endorsed union plans to lobby City financial institutions that invested in the £1.1 billion flotation in February.

Prospect, the union representing QinetiQ’s scientists and other specialists, has been told by the company that it "cannot afford" to pay the proposed "final" 2% pay offer in all parts of its business due to budgetary pressures.

Prospect National Secretary David Luxton said today: "The Board of QinetiQ have totally misjudged the mood of their employees. A ‘discretionary’ 2% pay offer is in stark contrast to the Trading Statement published to the Stock Exchange by QinetiQ less than two weeks ago at the end of the financial year. Despite a stated strong performance in two of the company’s sectors - Defence and Technology, and Security and Dual Use - it is now telling staff that it cannot afford even a below-inflation 2% pay offer in all parts of its business.

"The pay offer fails to give appropriate reward and recognition for the thousands of scientists, engineers, specialists and other employees who have done so much to enhance the company’s technical reputation, making its flotation a huge success in the City and bringing a considerable personal windfall to QinetiQ’s senior directors.

"The value of QinetiQ is the unique intellectual capacity of its employees. This offer does immense damage to staff morale and motivation."

The unions in QinetiQ (Prospect, Amicus, PCS, GMB and the T&G) are now planning to lobby the City financial institutions that have invested in the company to emphasise the importance of good staff morale for the organisation’s future long-term profitability.