A restructured local government pay spine will cost councils more money, chief executives have been warned.
A letter sent to chiefs by national employers’ representatives and unions last week, seen by LGC, stressed that while both sides would strive to achieve a financially viable outcome some additional cost was unavoidable.
Unions and national representatives of councils agreed a review of the national pay spine was urgently needed back in February, following decades of neglect and the introduction of the national living wage in April.
Last year LGC analysis found almost a third of the points on pay spine will be wiped out by the end of the decade when the national living wage is set to reach at least £9 an hour.
Unions and employers have now met to discuss the terms of reference for the review, which is due to be completed by 30 June 2017.
The letter, sent following the meeting, said representatives involved in the review “do not underestimate the challenge we face in designing a restructured pay spine that is capable of withstanding annual changes to the national living wage rate (without the need for regular fundamental reviews) whilst retaining its current flexibility for local employers to apply local pay and grading structures”.
The letter added: “It is important to state from the outset that a restructured pay spine will not be possible without some additional cost for councils. However, both sides will endeavour to achieve an outcome that is financially viable for employers and fair to employees.”
Among the terms of reference are commitments to ensure the revised pay spine is capable of accommodating all local government services roles while managing the assimilation of other roles, including health roles, and can be used locally to recognise contribution and progression.
The revised pay spine will also need to be compliant with the Equality Act 2010, while the review will also need to take into account the potential impact on pay arrangements in London.
A consultation with councils and union members on the proposed restructured pay spine will be carried out before any final agreement is reached, the letter said.