Saturday, September 27, 2014

Local Government Pay - "Please sir, can we have some less?"

We have the details of the “proposal” (not a formal offer) from the employers’ side in the national pay dispute covering local government workers in England, Wales and Northern Ireland. This amounts to a two year pay settlement of 2.2%, paid nine months late (on 1 January 2015) with an unconsolidated lump sum paid in December 2014 (an unconsolidated lump sum is an amount of money paid separately from salary or wages which doesn’t increase your pay in the long run – it is taxable and would be paid pro rata for part time workers). The lump sum payments are more generous below spine point 10 (as was the original offer) - £325 from spine points 5 to 7, £150 on spine points 8 and 9, and £100 on spine points 10 and above.

This "proposal" isn't an offer - and UNISON's "National Joint Council" (NJC) Committee, representing the majority of all those trade unionists in dispute, has agreed that this is no basis to settle the dispute. However, there is a danger that other unions may find that their officials are trying to "sell" this dodgy deal to members - and that this may cause the fainthearted within UNISON to wobble. A brief look at this entirely unacceptable proposal indicates why no one who cares about the future of local government or its workforce would give this "proposal" any consideration whatsoever.

Since we started this dispute because we had made a single year pay claim (for a flat rate increase to bring the lowest paid outside London up to the rate of the living wage), and since the employers responded with a single year offer of a 1% pay rise, with an element of “bottom loading” to keep the lowest paid above the rate of the statutory minimum wage, it is worth looking, first of all, at what this “proposal” means for that single year (1 April 2014 to 31 March 2015).

The increase we would receive under this “proposal” in the period up to 31 March 2015 has two elements, the three months worth of a 2.2% pay rise from 1 January, plus the unconsolidated lump sum. It is somewhat disingenuous to add an unconsolidated lump sum to a delayed percentage increase (as they are incommensurable, it’s like adding apples to bananas). However since that is what the table which has been circulated to UNISON branches does, it’s worth looking at what these figures mean in practice for how much money we will be paid in the year from 1 April 2014 (which is the period over which we embarked upon an industrial dispute and took strike action).

At spine point 26, the value of a £100 lump sum (on the national pay spine) is equivalent to 0.45% of annual salary, which if added to the annualised value of a 2.2% offer paid nine months late (0.55%) gives a “cash value” to the increment in income over the twelve months from our settlement date of 1 April 2014 of 1% of salary.

So outside London, the employers’ “proposal” (when compared to their previous offer against which we took strike action) delivers nothing in the current pay year for someone on spine point 26, something for people below that point and worse than nothing for people above that point.

On the Inner London Pay spine the equivalent spine point (above which the employer’s “proposals” actually deliver less in cash terms in the current year than the 1% against which we have been taking strike action) falls between spine points 20 and 21 (in outer London the same point falls between spine points 23 and 24). Therefore everything I say here about how utterly inadequate the employers’ proposal is applies with added force in Greater London.

Outside London, in authorities which apply only the national pay spine, the following table shows, at various points on the pay spine, how much more or less the employers’ new “proposal” offers between 1 April 2014 and 31 March 2015 when compared to the 1% pay offer (with more for spine points 5 to 10) against which we took strike action;
Spine point
Value of previous offer £pa
Value of “proposal” £pa
Gain/(loss) £pa
Gain (loss) per month
Gain/(loss) per week

As you can see, the employers’ “proposal” offers an extra pittance to the lower paid at the expense of offering less to workers paid at or above spine point 26 (the bottom of scale 6). This is obfuscated to some extent in the documents circulated by the device of offering to settle next year’s pay claim at the same time – so it is worth stressing just how tiny the benefit to the lowest paid from this “proposal” really is. Across the whole year, the lowest paid benefit by a few pounds before tax – after tax perhaps enough to afford a small round of drinks to toast the skill of our negotiators?

Those who took strike action may also be interested in how the improvement (if there is one for them) in the money they will receive from their employer in the current pay year compares with the deduction they experienced for taking strike action on 10 July. There is no point making this comparison for those on spine points 26 and above – since they will all be worse off than if we had accepted the employer’s original offer.

This table compares the amount by which workers at various points on the bottom half of the pay spine benefit from the employers’ “proposal” (compared to the previous offer) with how much it will have cost them to have taken strike action for a day, depending upon whether their employers made deductions at the rate of 1/365th or 1/260th of annual salary;
Spine point
Deduction at 1/365th
Deduction at 1/260th

The skilled negotiators who have drawn this dramatic new “proposal” from the employers will therefore have achieved (if they could persuade members to accept a settlement on this basis);
·         Less money in 2014/15 than if we had accepted the employers’ first offer for everyone who earns more than £1,870.25 gross (i.e. before deductions) per month (£430.41 gross a week);
·         A pittance extra in 2014/15 for those earning less – barely enough to buy a round of drinks and much less than has been lost by those who took strike action on 10 July;
·         Coming nowhere near our objective of a flat rate increase of at least one pound an hour;
·         Failing to achieve the living wage for workers up to spine point 10.

Now it might be objected, by one of these skilled negotiators (let’s perhaps refer to him as BS?) that this analysis of just how pathetic it would be to recommend settling our pay dispute for this miserable “proposal” because of its impact in the current pay year, fails to take account of the longer term impact of the 2.2% pay increase from 1 January into the future.

I’ll look further at that argument in the next blog post, but it is entirely reasonable to look at the impact of a pay proposal over one year, because if we had accepted the employers’ original offer (against which we took strike action) we could have lodged a new claim for a further increase from 1 April 2015.

The most important conclusion to draw from all this analysis is that we need to step up preparations for strike action on 14 October 2014!

1 comment:

Graeme Horn said...

I calculated that as a part time worker by April 2016 I will be 8 pounds up compared with a 2 x 1 per cent deal.My ending salary would be 38 pounds higher so I'll get that again in 2016/7. By around October 2018 I will have recovered the one day's pay lost.

That's all pre-tax of course.

In April 2016 I might just have enough to buy you and me a pint, Jon. But you'll have to come to Birmingham as I won't be able to pay London prices.

Birmingham branch wants to fight on.