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Proposed 2% pay rise 'would be headache'

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Councils would face a “headache” if they had to rethink next year’s budget plans to factor in a proposed 2.2% pay rise for all staff, council leaders have said.

The LGA is starting a consultation on proposals published last month that would see a 2.2% pay increase for staff earning £14,880 and above, with higher increases for employees earning less than that. The deal would run from 1 January 2015 to 31 March 2016.

The LGA is holding 11 regional meetings to gauge the views of councils which it will feed back to the national negotiating panel to enable it to decide whether to turn the 2.2% proposal into a formal offer.

LGC spoke to several leaders and chief executives, all of whom agreed with the principle of a pay rise for staff. But some said they had based their budget assumptions for 2015-16 on previous proposals for a 1% rise, and raised concerns about the impact of the new proposal on budgets and services.

One city leader, who asked not to be named, told LGC: “We’ve budgeted for a 1% pay rise, and anything more than that will [give us] a headache.”

Another city leader said that in order to award the proposed pay rise, “something else will have to give”.

The councillor said the demoralised workforce had endured real-terms wage cuts and job losses in recent years.

“More than anything they deserve a rise but the difficulty is, however much we think it is deserved, if we haven’t got the funds to do that, we would struggle,” the leader said.

Michelle Kirk, director of the East of England LGA, said the proposed pay increase would potentially have the biggest impact on “really small” councils and on large authorities with higher numbers of lower paid staff, but that most councils would have difficulty paying anything extra.

“For every additional penny paid to staff, there will need to be cuts made elsewhere,” she said.

“[The impact] will depend on how many staff they have at each level, but any pay award that is given in local government does present a challenge for local authorities in terms of their ability to afford it.”

Some authorities said the proposed 2.2% increase was “manageable”.

Wigan MBC chief executive Donna Hall said her authority “had more or less budgeted for this amount”.

She said: “For us, having a fair deal for staff is really important [to] making sure we have got that foundation for wider transformation.”

Graham Burgess, chief executive of Wirral MBC, said that while the proposed rise would add to budget pressures, the council felt it could accommodate it.

This month, unions agreed to suspend strike action after employers agreed to consult on a 2.2% rise.

 

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