With the prospect of a summer of discontent, public sector unions and employers are bracing themselves for a seriously sweaty round of pay negotiations.
Against a simmering backdrop of disputed pay deals and the relentless march of modernisation, industrial relations are entering the most critical phase since New Labour came to power. Many observers are arguing that the very way these disputes are handled needs updating if wholesale strikes are to be averted.
Squaring up in the blue corner stand the employers, represented by the battle-weary Employers' Organisation. Under attack from the unions for being too intractable in their stance on pay and conditions, yet criticised in some government quarters for being too soft, the organisation has a hard fight to justify its heavyweight status.
Public sector unions Unison, GMB and T&G are currently demanding a 4% pay rise plus£200 and the abolition of the bottom three grades to help the lowest paid. They are also asking for an increase in annual and maternity leave, as well as two weeks' paternity leave.
They reacted with fury to the EO's proposal of a 7% increase over three years - a bid to end the exhaustive pattern of pay bargaining on an annual basis - and an end to premium rates for shift, evening, overtime and weekend work. Further derision was aimed at the offer of a joint review of holidays and benefits.
Unison national secretary Heather Wakefield says: 'It is clear the employers are adopting a tough stance.' She describes their offer as including 'more strings than the philharmonic', and adds: 'I cannot see a way forward unless the employers rethink their penny-pinching approach. At this rate we cannot rule out industrial action.'
In the wake of public sector strikes in 2002, the Local Government Pay Commission was charged with reviewing the state of pay in local government. Its findings painted council staff as the poor relations in the public sector, but what should have been a bargaining tool for the unions has so far proved underwhelming.
Ms Wakefield says: 'The attitude of the employers has been so disappointing because in spite of the commission's report, local government staff have seen no sign of investment or training and only a pay offer which is below inflation.'
Set up by the Local Government Association in 1999, the organisation's main role is to support councils as employers. It provides advice on people management, helps formulate policy on employer issues and through its stewardship of pay negotiations has the potential to affect 1.5m staff and around£14bn of council spending.
Funded by a government grant, it occupies a curious hinterland - neither the lapdog of government nor firmly ensconced in the local government fraternity.
A recent report by the Work Foundation, commissioned by the LGA as part of a programme of investigations into bodies which are funded by the government grant to councils, criticised the EO's separation from the fully independent LGA as a structural weakness. It also said the organisation lacked corporate capacity, and called for greater co-ordination between it and the LGA.
Crucially, in the area of pay negotiations the report called for the team responsible to be strengthened. In what many took to be a thinly veiled criticism of its handling of the ongoing fire dispute, it said the EO is still politically vulnerable to the government and the unions.
Phil Sapwell, chief personnel officer at Redbridge LBC and - in his role at the Society of Personnel Officers - a key adviser to the employers in the current pay talks, says he is happy with the organisation's basic approach to the negotiations. But he accepts it is in an awkward position.
He says: 'As an organisation which represents more than 400 local authorities, getting one single message from such a wide constituency is unlikely. As well as that it has to take account of the LGA and of course the purse strings are held by central government departments and national politicians who have their own agenda. I am not surprised that some people criticise it for being in turn too hard or too soft. In fact, if it is getting flack from both sides then it must be doing something right.'
Rob Pinkham, the EO's new executive director, refutes suggestions that it is stuck between a rock and a hard place, unable to please the unions, its members or the government. He says: 'It is not a question of being hard or soft on anyone - this is not a war. We have always only ever been about the quality of services and how these pay agreements can further that end.'
And as for the idea that government is putting the squeeze on employers, Mr Pinkham says: 'Civil servants may think they are putting pressure on us to keep council tax low, but the notion that councillors are desperate to put up council tax is just daft - affordability has always been a major priority in our negotiations.'
The organisation is aiming to reinvigorate its reputation by arguing for a complete overhaul of the way pay negotiations are carried out as well as a fresh take on working practices for council workers across the country.
In its recent submission to the Local Government Pay Commission, it called for an end to the '9am-5pm, Monday to Friday' culture. It is demanding greater flexibility for councils to put forward their own pay levels for unsociable hours, staff responsibility and performance as well as undertaking their own negotiationsin relation to market conditions.
This is one area in which Mr Pinkham is unequivocally drawing the battle lines - over the issue of pay and conditions and the fear within the EO that the government is keen to snatch this function away from councils.
He says: 'I am of the view that when we lose control of key staffing issues like terms of employment then we lose control of services. If we are to defend local democracy then we have to defend councils' right to set these terms.'
However, unions fear this new-found zeal for local bargaining will only serve to entrench low pay, particularly for women, who traditionally face lower pay rates in the open job market than within councils.
Nevertheless, Mr Pinkham insists: 'We are not being nasty or trying to save money. These are proposals we believe will help deploy the workforce better and make councils more responsive to our 24-hour society.'
And when it comes to putting its own house in order, the organisation claims it has already made radical changes. Mr Pinkham says: 'We have slimmed down our side of the negotiating table, with 12 elected members to the National Joint Council and the creation of an executive of just four elected members. This means there is a strong line of accountability back to the LGA.'
The organisation is also looking at recommendations made in the Local Government Pay Commission report, which include creating a joint information base for use by both employers and unions.
'This would mean we are all working from the same basic information,' explains Mr Pinkham. 'So for example, both sides would be working from the same start dates if we were comparing pay. The situation at the moment is that you can more or less prove anything according to which dates you use.'
In response to another suggestion, it has appointed a permanent equal-opportunities adviser and adopted the commission's recommendation of assisted bargaining.
Mr Pinkham says: 'Within our current pay proposal we have included this conciliation approach at a local level to avoid previous situations, where there has been stalemate and deadlock'
As LGC went to press, the local government pay negotiations were entering a critical stage, with the prospect of industrial action increasingly likely.
For now, it would seem, employers are in a lose-lose situation, with unions quick to condemn their proposals and Downing Street piling on the pressure for councils to drive a hard bargain with the unions. Fearful any concessions will unleash a wave of public sector industrial unrest, the government is keen to keep pay rises to a minimum. It, of course, faces its own battles keeping a lid on council tax and income tax while trying to improve public services, all in the run-up to a general election.
For the employers, meanwhile, juggling these competing pressures looks set to become an occupational hazard.