Any respite for staff offered by the prospective local government pay deal will be short-lived, writes LGC’s editor
The indications that a pay deal for local government staff is in the offing come as a relief – there will be no strike and there should be some easing of the pain on staff who have suffered hugely in recent times. However, this relief may be short-lived.
It is anticipated that both councils and unions will agree to a deal, taking effect from January, entailing a 2.2% pay rise for most employees, with extra pay for those who earn least. This would follow below-inflation rises in 2013 and 2014, which came after three successive years of frozen pay.
The scale of the proposed rise became apparent days before the Office for National Statistics released its latest inflation figures. The rate of the retail prices index – the measure that takes into account the costs of housing as well as consumer purchases – was 2.3% in August. RPI is forecast to hover at about 3% for the next few years, according to a Treasury comparison of independent forecasters’ workfrom May.
It is therefore the case this pay increase hardly represents a real-terms hike; indeed it is more likely to be a fall.
This pay increase hardly represents a real-terms hike; indeed, it is more likely to be a fall
Local government’s lowest earners in particular have been hit by significant reductions in their standard of living over the past few years but even those at higher levels – who rarely gain the sympathy of politicians or the public – have been hit.
LGC’s most recent salary tracker showed newly appointed chief executives were earning 6% less than their predecessors, without accounting for inflation. Management cuts may well also mean they do more work for reduced pay.
For both of these groups of staff, councils face competition in the labour market. It is a depressing cliché that scanning barcodes at a supermarket till tends to pay more than a career in social care.
Those at the highest levels will inevitably start looking at the private sector as a more generous and less demanding employer. The public sector cannot continue to rely on goodwill as its main retention tool – staff have rents or mortgages to pay.
Although the 2.2% pay rise takes place at a time councils are under severe financial pressure, it is in a year – incidentally the year before a general election – that constitutes the calm before the storm. The worst cuts lie when the government cuts council funding after May’s poll.
Despite this, councils will struggle to afford this rise without funding it by reducing services, and the prospect for further pay rises in the next parliament appears bleak.
The irony for unions is that the more successful they are at seeking rises, the more likelihood there is that their members will see their jobs transfer from direct council control and national pay bargaining.
LGC’s workforce survey this week indicates a huge growth in expectation that more services will be outsourced as councils continue their quest to improve efficiency.
The impact of austerity on pay and delivery models, not to mention staffing levels, inevitably makes this a difficult time for the local government workforce.