The union was commenting on press reports that chancellor George Osborne is expected to say in the Budget that regional pay will be imposed on some civil servants – notably the Department for Work and Pensions, the Home Office and the Department for Transport – to reduce their pay in line with local private sector salary levels.

Osborne announced in his autumn statement last year that he was asking pay review bodies to examine moving from national pay bargaining to regional pay, and to report back by July 2012.

Currently there are only a few examples of regional pay in the civil service, introduced under the last government. For example in 2007 the Ministry of Justice introduced 'zonal' pay covering five regions (now down to four). English Heritage also operates a regional pay system.

According to the civil service pay remit guidance issued last Friday, the Cabinet Office Workforce Reform team is working with departments to develop "a single agreed view of the market rates for different roles in different locations in the civil service, an agreed metric for determining whether an individual Department is paying above the rate for a job role and a model reward strategy to support the development of departmental strategies."

But Prospect deputy general secretary Dai Hudd said: "The introduction of regional pay is an ideological attack, beset with pitfalls. Specialist civil servants, who are much in demand, work in national and international markets, not regional ones.

"They will simply be encouraged to move jobs and regions in order to receive higher pay, leading to skills shortages in key areas."

He drew attention to data from the Office of National Statistics in July 2011 showing that those with the highest level of education (a degree or equivalent) earn on average 5.7% less than employees in the private sector. "There is no sense in this policy," Hudd added. "It will have a negative impact on local economies, by taking even more money out of depressed areas."

Prospect's own report, Government That Can – needs people who know how, revealed last week that since 1992 the pool of qualified technologists working for government in defence, transport, energy, research, environment, food, justice and overseas has fallen 78%, from almost 36,000 to 8,100.