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Local Government pay offer 2004 out for consultation

The Scottish 2004 Pay Offer for local government employees is being sent out to branches in a Scotland-wide consultation exercise. This follows what the employers claim is their first and final offer.

Joe Di Paola, Scottish Organiser for Local Government said, "We want branches to hold meetings in the workplace, and to ballot members to supplement meetings in order to consult as widely as possible with members regarding this offer”.

The offer is to cover a two-year period (from April 2004 - March 2006) and is a straight percentage offer of:-

• 2.95% on all spinal column points, on all scales, with effect from 1 April, 2004

• 2.95% on all spinal column points, on all scales, with effect from 1 April, 2005

It is likely that this is the best offer that can be achieved through negotiations.

Branches are asked to consult with a closing date of 2nd July, 2004

Branches should add together the total numbers voting for and against however the numbers are gathered. Joe added, "It is vital that each branch consults on the same question and a circular has been sent to branches outlining the question to be put.”

Branches should only consult those members who directly benefit from any pay offer, that is those who are directly conditioned to the Scottish Joint Council for local government employees (former manual and APT&C staff pay scales).

Whilst this will include staff in the voluntary sector and services contracted out on Scottish Joint Council pay scales, it will exclude those covered by other agreements such as Colleges of Further Education, Police Authorities, Chief Officials and Craft Workers. Nor should members on locally agreed pay rates or on individual contracts not directly related to the SJC be consulted.

If branches have any difficulty in deciding who should be consulted, they should seek advice from their Regional Officer, Joe Di Paola, Bill McAllister or Stephen Palmer at Douglas House on tel - 0845 355 0845.

The results should be returned to Joe Di Paola by 2 July 2004. A similar process is taking place in England, Wales and Northern Ireland There, the offer is of 2.75% in the first year followed by two offers of 2.95% for the following two years. The last year is underpinned by a guarantee of RPI.

At the Scottish Joint Council meeting held on 7^th June, 2004 the employers responded to the trade union side's pay claim with a first and final offer as set out below:-

• 2.95% on all spinal column points, on all scales, with effect from 1^st April, 2004
• 2.95% on all spinal column points, on all scales, with effect from 1^st April, 2005

The settlement to run till 31^st March 2006.

The Trade Union Side of the Scottish Joint Council agreed to consult with those members conditioned to the Scottish Joint Council's National Agreement on Pay and Conditions of Service.

The view of the trade union side is that the above offer is the best offer that can be achieved by negotiations.

LOCAL GOVERNMENT PAY CLAIM 2004

TRADE UNION SIDE OF THE SCOTTISH JOINT COUNCIL FOR LOCAL GOVERNMENT IN SCOTLAND

BACKGROUND TO TRADE UNION CLAIM

This is the second claim under the new separate Scottish bargaining machinery and the Scottish Executive's financial arrangements. The fifth and final stage of the current pay settlement expires on 31 March 2004. The Trade Union Side of the Scottish Joint Council submit to the Employer's Side this claim for the revision of the hourly rate of spinal column (SJC/14) and the existing annual and hourly rates last revised by circular (SJC/9).

This year's claim is lodged against the background of the implementation of the Single Status Agreement's job evaluation exercise and assimilation to the new spinal column of hourly rates, expected to be completed by 1 April 2004. (SJC/13)

The trade union's claim from is straight forward and realistic. It seeks to maintain living standards and address the problem of low pay within local government.

TRADE UNION CLAIM

The trade union's claim is in two phases, it seeks:

• A flat rate increase of £1000 per Annum on all Spinal Column Points, underpinned by a Minimum Wage of £6:00 per hour with effect from 1st April, 2004.
• An increase of 5% on all Spinal Column Points with effect from 1st April 2005.

The settlement should run for a period of two years from 1^st April, 2004 to 31^st March, 2006 in accordance with the Scottish Executive's financial settlement timetable for local authorities.

The flat rate element of claim is aimed at addressing the problem of a large number of low paid employees in local government and is underpinned by a minimum wage of £6:00 per hour by 1st April, 2004.

The of the claim is required to help restore and maintain living standards of all employees covered by the NJC who have seen their pay eroded considerably in comparison with those in both the public and private sectors.

The Trade Union Side believe that the claim is realistic, modest and fair. The following pages expand on the main points and give justification for them. It is hoped that the Employers' Side will give our claim full consideration and respond favourably.

LOCAL GOVERNMENT PAY

Recent local government pay settlements have seen local government workers fall behind other public sector occupations (see below) and behind the median of private sector settlements (CBI Pay databank).

The following tables illustrates this:

3. Source: Pay and workforce strategy for local government. ODPM/EO Sept, 2003

Local government pay has been hit by successive years of public spending restraints. This has meant that local government workers have seen their pay drop in comparison with other workers.

Between 1998 and 2002, private sector pay increased by 22%. Overall public sector pay has risen by only 16.8%, and local government pay fared little better, rising by 17.8%. Both increases are below the increase in average earnings for the period. In 1997, average local government pay was £371.60 per week, higher than average private sector pay which was £368.40. However, public sector pay increases have not kept pace with those in the private sector, and public sector workers are now worse off than their private sector counterparts.

1. Source: ONS New Earnings Survey 2002, indices re-based 1998

Average Earnings UK & Scotland

In the three months to December 2003, whole economy average earnings, including bonuses, increased by 3.4 per cent over the same period a year ago, down 0.1 percentage point from the November 2003 rate. Excluding bonuses, the increase was 3.6 per cent, unchanged from the previous month.

The corresponding figures for the main UK industry sectors were:

Manufacturing
3.4 per cent including bonuses, unchanged;
3.3 per cent excluding bonuses, unchanged;.

Service industries
3.4 per cent including bonuses, down 0.1 percentage point;
3.6 per cent excluding bonuses, down 0.1 percentage point;

Public sector
4.4 per cent including bonuses, down 0.4 percentage points;
4.4 per cent excluding bonuses, down 0.4 percentage points;

Private sector
3.2 per cent including bonuses, unchanged;
3.3 per cent excluding bonuses, unchanged.

Average annual earnings of all full-time employees rose to £25,170 in April 2003, according to the latest New Earnings Survey for April 2003. Average gross annual earnings for full-time women rose above £20,000 for the first time to stand at £20,314, compared to £28,065 for men. Full-time female employees saw an increase in annual earnings of 0.5 percentage points more than that for men (3.5 per cent, compared to 3.0 per cent respectively). A key finding of the NES was that the gender gap narrowed by a full 1.0 percentage point between April 2002 and April 2003.

Average gross weekly earnings of all full-time employees on adult rates working a full week in April 2003 were £476. The median was £394 a week. The average for men was £525 (up 2.2 per cent on the previous year), and the average for women was £396 (up 3.3 per cent). The average working week for full-time employees was 39.6 hours, of which 1.6 hours consisted of paid overtime.

RECRUITMENT PROBLEMS

The reports of the Income Data Services identify that a number of Scottish local authorities reported recruitment and retention problems for a number of key professional posts. Also there were problems in lower-paid posts as a result of the local private sector market.

A UNISON Survey conducted in 2003 reveals that over a third of local authorities are offering financial incentives to graduates to stay with the local authority for an agreed period, whilst others are offering assurances on non-financial incentives such as training, personal development and working conditions. An article in the Herald dated 30 June 2003 quoted the Association of Directors of Social Work as calling for a national review of pay and conditions to stop the "Dutch auction" created by lack in an internal labour market.

LOW PAY

There exists within Scottish Local Government the continuous problem of pay inequality and low pay. While the single status agreement established a minimum wage for local government employees, it still left half of the local government workforce with basic rates of less than half male median earnings. In fact the number of employees falling below that figure has increased dramatically over the past ten years as local government rates have continued to lag behind the whole economy average since 1988.

60.8% of the local government workforce are paid between spinal column point 3 - £10,068 to spinal column point 15 - £14,211

LOCAL GOVERNMENT FINANCE

The unions are aware of the major constraints that the Government has continued to impose on local government spending.

The trade unions have been promoting the need for increased resources for both services and pay. This includes seeking to have a share of the Scottish Executive's underspend for local government.

Scottish Ministers have announced their public sector pay policy at 2.5% based on forecast rate of inflation within the wider UK context, including the broad economic outlook and the need for public sector modernisation and pay based on performance.

Standards of those who provide local government services. If local government is to provide quality services and also meet the challenge likely to arise from Best Value, then it requires a skilled, motivated workforce. That requires a commitment to reward people fairly for the work they do.

FUTURE PAY TRENDS

Average earnings growth in the year 2002/03 for the whole economy was 3.1%. This was a drop from 3.7% in the year 2002 to June 2003, but the fall was mainly a result of private sector earnings falling back to 2.6% against 5.6% growth in the public sector.

The expectations of the IRS panel are that headline earnings growth will rise to 4% by the end of 2003.

COST OF LIVING

While inflation generally is expected to remain around the target rate of 2.9% or 2003 revisions of the estimate of economic growth.

The control of inflation (which is by no means certain in the context of widespread recession) has been at the expense of successive interest rate rises. For example, this means that the September headline RPI of 3.2% masks rises of 8.4% in overall housing costs and 18% in mortgage costs. Such rises hit our members hard especially the lower paid for whom housing costs account for a substantial proportion of income.

CONCLUSION

There can be no doubt that local government employees have seen their real earnings fall in comparison with both other public and private sector employees and prices.

At the same time, while the lowest pay rates have been raised as a result of the single status agreement, the number of low paid employees has increased enormously, leaving huge numbers of local government workers caught in the poverty trap.

In making a claim for £1,000 underpinned by a minimum wage of £6:00 per hour and a second phase of 5% we aim to address these two issues. Given the levels of low pay, and the fall in real earnings that local government workers have experienced, our claim is simple, fair, modest, and justified. We therefore ask the employers to meet the claim in full.

PREVIOUS PAY SETTLEMENTS FROM 1997

7. 1 April 1997 2.5% (APT&C) minimum wage £4.00 per hour giving rises of 2.4% to 4.7% (manual workers)
8. 1 April 1998 3%
9. 1 April 1999 3.3%
10. 1 April 2000 2%*
11. 1 October 2000 1%*
12. 1 February 2001 3%*
13. 1 March 2002 £500* Flat rate
14. 1 April 2003 4%*
1. * Part of the five stage agreement SJC/9 (30 March 2001).

POLICE STAFF PAY SETTLEMENT.

The police support Staff Council have agreed a two year settlement of an increase of 3.5% on all spinal column points from 1 September,2003 and a further 3.3% from 1 September 2004.

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