Local Government workers submit pay claim for 2010 (press release)

SCOTTISH LOCAL GOVERNMENT PAY CLAIM 2010

Submitted by the
TRADE UNION SIDE OF THE SCOTTISH JOINT COUNCIL
FOR LOCAL GOVERNMENT IN SCOTLAND.

To the
EMPLOYERS’ SIDE OF THE SCOTTISH JOINT COUNCIL
FOR LOCAL GOVERNMENT IN SCOTLAND.

THE CLAIM

• That the settlement should run for a period of one year with effect from 1 April 2010 to 31 March 2011

• An increase of 3% or £600 on all Spinal Column Points whichever is the greater

• Any settlement should be weighted towards the lower paid

• A minimum wage of £7 per hour should apply in line with the Scottish Living Wage Campaign

• Community and Voluntary organisations that apply SJC conditions should be encouraged to apply any settlement agreed through the SJC

INTRODUCTION TO TRADE UNION CLAIM

The current pay settlement expires on 31 March 2010. This is therefore the sixth pay claim and set of negotiations under the separate Scottish bargaining machinery of the Scottish Joint Council for Local Government Employees and the Scottish Executive’s financial arrangements.

This year’s claim is lodged against the background of:

• The continuing implementation by local authorities of the Single Status Agreement’s key objective of fair and non-discriminatory grading;

• The current financial situation and the need to invest in the public sector to promote recovery.

• the major contribution made by employees in the service delivery challenges arising from Shared Services, Efficiency Savings, Best Value Regime with the demand for continuous improvement and greater flexibility.

The trade unions re-affirm their commitment to service delivery of the highest standard based on shared principles of: democracy, fairness, excellence, partnership and long term investment. In order to achieve the aim of high quality services the workforce must be well rewarded, trained, motivated with security of employment.

Local government in Scotland continues to face recruitment and retention problems as reported in IDS reports. This year’s claim seeks to take some measures to rectify these difficulties.

The trade union’s claim seeks to maintain the living standards of members and is weighted in favour of the lower part of the pay spine; these elements should be reflected in the settlement.

TRADE UNION CLAIM

The Trade Union Side of the Scottish Joint Council submit to the Employers’ Side a claim seeking a revision of the spinal column of hourly rates and the spinal column of annual and hourly rates for former APT & C Staff and Manual Employees, last revised by circulars (SJC/36 & SJC/37).

The trade union’s claim seeks:

• A settlement that runs for a period of one year with effect from 1 April 2010 to 31 March 2011
• An increase of 3% or £600 on all Spinal Column Points whichever is the greater
• Any settlement should be weighted towards the lower paid
• A minimum wage of £7 per hour should apply in line with the Scottish Living Wage Campaign
• Community and Voluntary organisations that apply SJC conditions should be encouraged to apply any settlement agreed through the SJC

The Trade Union Side considers 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 within the agreed timetable.

PREVIOUS TRADE UNION CLAIMS

Since 1999 and the formation of the Scottish Joint Council, there has been five previous claims submitted by the trade union side:~

1999

The First claim to be submitted was:~

• A general increase of £500 or 5% whichever is the greater.
• Further action to end low pay.
• Scottish Joint Council Joint Working Party on employee friendly and family friendly flexibility.

The Second claim to be submitted was:~:

• A minimum rate of £5.00 per hour; with
• An increase of 5% on all pay points; or
• A flat rate increase of £500.

.

2004

The Third claim to be submitted was:~:

• A flat rate increase of £1,000 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.

2006

The fourth claim to be submitted was:~

• The settlement should run for a period of two years with effect from 1 April 2006 to 31 March 2008.
• An increase that accommodates either a percentage and/or a fixed sum (for example £1,000 or 5% whichever is the greater), or a combination of both, applicable to all Spinal Column Points.
• A revision of the bottom Spinal Column Points.

2008

The fifth claim submitted;

• That the settlement should run for a period of one year with effect from 1 April 2008 to 31 March 2009
• An increase on all Spinal Column Points of £0.51835 per hour, (the equivalent of £1000 per annum) or 5% whichever is the greater
• An increase in annual leave entitlement by three days resulting in amending the first sentence in paragraph 7.3 of Part 2 to read; ‘The minimum paid full annual leave entitlement is twenty three days’ (excluding all Public Holiday)
• An additional one day’s public holiday

The following settlement was reached;

Pay Settlements – General

According to IDS Pay Report 1034 (October 2009) the median settlement level for the last three-month period, to the end of August 2009, has remained at 1% - the same level recorded in the last analysis by IDS. While pay freezes make up nearly half of settlements for this latest period, pay awards at and above 2% still account for two-fifths of awards. Very few pay awards are actually at the median settlement level of 1%, with most of these in the public sector.

Pay freezes have mainly been concentrated in chemical manufacturing, construction, general engineering and at non-food retailers. If these are excluded from the analysis and focus just on those companies awarding increases the median settlement level is 2.5%.

Pay Settlements – Public Sector

Local government staff in England, Wales and Northern Ireland have been awarded a pay increase of 1% for 2009, with an additional 0.25% for the lowest paid groups earning up to £13,703 a year.

The award, covering 1.3million workers, will be backdated to 1 April 2009. As part of the agreement, annual leave entitlement has increased from 20 to 21 days for employees with less than five years’ service. A further four days is awarded after five years’ service.

Scottish Teachers Settlements

The Scottish Negotiation Committee for Teachers reached the under noted agreement:

A three year pay deal for Scotland's teachers was agreed by the Scottish Negotiating Committee for Teachers in December 2007 comprising of the following:

Police Support Staff in Scotland

The Police Staff Council (Scotland) settlement of:

• From 1 September, 2005 an increase on all spinal column points of 2.95% with a further 0.45% conditional on negotiations on terms and conditions of employment.

• From 1 September, 2006 an increase on all spinal column points of 2.25% with a further 0.25% conditional on negotiations on terms and conditions of employment.

• From 1 September, 2007 an increase on all spinal column points of 2.45%

A three year deal was agreed in January 2009 with the following:

National Health Service in Scotland

A multi-year deal was reached in 2008:

The Statutory National Minimum Wage

The current Statutory National Minimum Wage from 1^st October 2009:

Issues influencing Scottish Local Government Pay

Low Pay

The Joseph Rowntree Foundation, in their report "Monitoring Poverty and Social Exclusion 2007", said that far more must be done to help the working poor. Half of all poor children live in working households. Public services are the biggest direct employers of low paid workers aged over 25. The Scottish Low Pay Unit estimates that over 350,000 full time workers are low paid trapping individuals and families in poverty and denying opportunities and choices that should be there for everyone in a country as wealthy as Scotland. Recent settlements within the Scottish Joint Council have failed to address this issue.

Public Sector Pay

Whilst not the main focus of the report, the Finance Committee of the Scottish Parliament made a number of recommendations in relation to local government pay. These included support for a working group with Cosla and the trade unions to look at low pay. In addition they recommended tripartite discussions between unions, COSLA and the Scottish Government when pay is discussed as part of the local government settlement. The trade unions however remain disappointed at the slow progress being made in establishing and agreeing a work programme for the Low Pay Working Group given that the establishment of this group was a key part of the last SJC Pay Settlement.

Equal Pay

The Scottish Parliament’s Local Government Committee published a report on ‘Equal Pay in Local Government’ and made the following recommendations:

These issues have been formally raised with the SJC Employers.

Boosting Local Economies

Research by the Association for Public Service Excellence found that for every pound spent by public employers, 64 pence is recycled into the local economy

Affordability

Both the UK and Scottish Governments have set a public sector pay policy of limiting pay awards to 1.5% (basic award).

The Audit Commission has called for a freeze on public sector pay to ‘rebalance the public finances’.

The Scottish Government is warning of budget problems due to the Treasury clawing back £500million of its revenue due to the increased efficiency savings planned by the UK Government. Local Government’s share of this is £174m. Whilst local authority support is cut in real terms by 0.5% revenue grants are increasing by over £400m (+ 5.2%) at the expense of capital expenditure that reduces by £189m (- 18%).

This assumes that local authorities will continue their commitment to freeze council tax rates and reduced rates for small businesses, a policy that is looking increasingly difficult to justify. The accumulated cost of the council tax freeze will be £210m in 2010/11 and the small business scheme £93m. These are resources that are urgently needed to meet the increasing demands on councils during this difficult financial period. In contrast English council tax increases have averaged 2.8% per year.

The trade unions seek to work with the Employers to try to promote the need for increased resources for both services and pay to the Scottish Government.

Efficiency Savings

The contribution and endeavours of the local authority workforce in securing efficiency savings through continuous improvement under Best Value Regime should be reflected in the settlement. The staff who have delivered these savings and improvements have been accepting real pay cuts over a number of years.

TRADE UNION TARGETS

The argument on low pay targets is increasingly moving towards the concept of a living wage. The Minimum Income Standards project has set a general rate of £7, based on an analysis of costs for all families with one person working full time and one working part-time, no child care costs, or two people working full time with childcare costs. This level covers about 70% of the families concerned, so a group of living wage experts (academics, campaigners) agreed to use this figure instead of doing separate calculations in each place.

However, because the £7 is based on council housing costs in Loughborough, the MIS has also provided a table that allows you to use realistic local housing costs – which tend to push up the Living Wage quite sharply. The figure for Glasgow went to £7.60 when the cost of a private rented 3 bed house was used in the calculation.

In Scotland the SJC Trade Unions and other community and campaigning organisations support the Scottish Living Wage Campaign whose aim is to see all employers in the public, private and voluntary sector in Scotland pay their workers no less than the Scottish Living wage of £7 per hour. This equates to the £600 flat rate element of the SJC Trade Union Side Claim.

ECONOMIC FACTORS

Unemployment

The seasonally adjusted unemployment rate in Scotland is 7.1% (UK rate 7.9%) in the June to August 2009 period, up 2.5 percentage points (UK 2.1%) on the same period a year earlier.

The seasonally adjusted claimant count rate (Scotland) - which measures the number of people claiming Jobseeker's Allowance - in September 2009 is 4.7%, unchanged from August 2009.

Inflation

CPI annual inflation – the Government’s target measure – was 1.1 per cent in September, down from 1.6 per cent in August.

By far the largest downward pressure affecting the change in the CPI annual rate came from housing and household services. This was principally due to average gas and electricity bills, which were unchanged between August and September this year but rose a year ago when some of the major suppliers increased their tariffs.

There were further large downward pressures from:

The largest upward pressure affecting the change in the CPI annual rate came from transport, in particular from fuels and lubricants and second-hand cars where prices rose between August and September this year but fell a year ago. The average price of petrol rose by 2.4 pence per litre this year to stand at 106.2 pence, compared with a fall of 1.7 pence a year ago. Diesel prices rose by 2.5 pence per litre this year compared with a fall of 2.3 pence a year ago. Partially offsetting these upward pressures were downward effects from sea and air transport where seasonal price reductions were larger than a year ago.

There was also a large upward pressure from clothing and footwear where prices rose by more than a year ago across a range of items.

In the year to September, RPI annual inflation fell by 1.4 per cent, compared with a fall of 1.3 per cent in August. The main factors affecting the CPI also affected the RPI, however the different methods used to measure the price of new cars in the CPI and RPI resulted in a larger upward contribution to the RPI (compared with the CPI) from the purchase of vehicles.

RPIX inflation – the all items RPI excluding mortgage interest payments – was 1.3 per cent in September, down from 1.4 per cent in August.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate in August, at 1.6 per cent, was above the provisional figure for the European Union as a whole of 0.6 per cent.

The Hidden Costs for those on Low Incomes

Even though inflation has continued to fall in the last year, food price inflation continues to be high and is much higher for those on lower earnings affecting many working in local government. A report titled ‘A Minimum Income Standard for Britain’ by the Joseph Rowntree Foundation, 2009 showed that minimum living standards rose by about 5% in the year to April 2009 giving a minimum income calculation for a single person of £13,900 per year. These figures are far higher than recent pay increases and minimum salary levels for SJC staff and highlight the cumulative effect of underpayment over many years.

Inflation Forecast

According to the latest review of inflation forecasts, City analysts expect RPI inflation to be -0.3% in the 4th quarter of 2009 and to steadily rise to 2.6% in the 1st quarter of 2010 before reaching 3.1% in the second quarter of 2010.

Average Earnings

Average earnings including bonuses rose by 1.6 per cent in the year to August 2009, down from the July rate of 1.8%. Average earnings excluding bonuses, or regular pay, rose by 1.9 per cent in the year to August 2009, down from the July rate of 2.2%.

In the year to August, pay growth (including bonuses) in the private sector stood at 1.2 per cent compared with 3.2 per cent for the public sector. Excluding bonus payments, growth in the private sector stood at 1.5 per cent compared with 3.4 per cent for the public sector.

Average Earnings Forecast

The consensus view of IRS’s panel of expert economic commentators is for average earnings growth to pick up from 1.9% in the final quarter of 2009 to 3.1% in the first quarter of 2010.

House Prices

According to the latest Quarterly Scottish House Price Index from the Bank of Scotland house prices rose by 5.3% in Scotland in Q3 2009 compared to the UK average increase of 2.8%.

Annually, house prices in Scotland fell by 6.3%, slightly below the UK average fall of 7.4%.

The average price of a house in Scotland is currently £125,418. This is 22% below the UK average of £161,280.

Community and Voluntary Sector

It is also the trade unions view that community and voluntary organisations and other organisations whose staff are contractually linked to the SJC award or who apply SJC conditions should be encouraged to apply any SJC pay award. Whilst the trade unions accept that these organisations are not constitutionally attached to the SJC the services they provide are part of the wider local government remit and their staff should not be disadvantaged by failing to apply the SJC award.

SJC ‘Red Book’

The trade unions in making this claim have not included ‘other’ terms and conditions of service as part of the claim however there are conditions of service that we would like to improve over the coming years and would look to utilise other SJC meetings to raise these issues.

CONCLUSION

The 2008 – 2010 SJC Agreement did not maintain our members pay at the level of inflation across the two years of the settlement, or average earnings. Our claim seeks to address this further relative decline in local government workers earnings.

It is important to focus on the period of our claim, 1 April 2010 – 31 March 2011 during which inflation is forecast to rise to 3.1% in the second quarter of 2010 coupled with the fact that many of our members are low paid. Given the fact that food inflation continues to be high this impacts greatly on those on lower incomes. This we believe supports our claim and the fact that any settlement requires to address low pay in local government. It is for these reasons that our claim is a mixed percentage and flat rate claim. We are also mindful of settlements elsewhere within the public sector in Scotland that do not expire until 2011 and the need to ensure a degree of parity across bargaining groups.

For these reasons, we believe that our claim is a just one, well supported by evidence, and one we hope is given the very serious consideration it deserves.

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2010 Pay Claim Consultation

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The survey is now closed to get the branch consultation underway. We had close to 3500 responses. The Local Government Committee thanks all those who participated.

Online survey forms part of pay consutation for first time

Stephanie Herd

It may feel like the dispute over pay was only yesterday but the last year of the two year pay deal (cost of living rise) was implemented in April 2009. The formal pay claim for 2010 will be lodged with the Scottish employers in November of this year.

It is important to UNISON to engage with its members in the formulation of what should be in the pay claim. For the first time we have decided to ask you directly through a survey on what you think the core elements of the pay claim should be.

The survey is very short, is only ten questions long and should only take up five minutes of your time.

The survey will ask you questions about whether you'd prefer a flat rate pay award or a percentage, how many years should the pay deal run for etc.

Your answers will help shape the formal consultation we will undertake with members through their branches in the latter summer months.

What you tell UNISON in this survey will have a direct bearing on the claim and this is your opportunity to give your views and I hope that you will find a few minutes to complete the survey.

All you have to do is to click on the link below. It should open up on your computer; click the answers that best reflect your views and click done at the end. The survey will close on 30 June 2009.

Thanks

Yours

Stephanie Herd
Chair Scottish Local Government Committee