The council took account of inflation forecasts when choosing the 2.5% figure. It expects the economy to pick up which could put pressure on its ability to retain staff.
'In terms of the government's pay policy we are maintaining that in the last three years we have taken large amounts out of our budget and had significant improvements in productivity which we expect to continue in 1994', said head of personnel and management services John Coe.
Harrow moved to local pay last year and agreed a 1% pay rise in August after months of negotiations. This year the council wants to finish negotiations by the end of January.
A 2.5% increase will add £1.2 million to the council's pay bill. But the changes it is seeking in the conditions of service would offset some of this increase. Mr Coe estimates the move to monthly pay could save up to £70,000 in administration costs while cutting the premia rates could bring savings of around £60,000.