Local Government Employers (LGE) has informed unions that there will be a pay freeze for employees for a second year running.
Union representatives were told in a meeting this morning that their request for a £250 pay rise for all staff had been turned down because councils want to focus on protecting services and jobs.
Some councils have already negotiated individual deals with their local union branches with employees accepting pay cuts and changes in terms in return for assurances on jobs.
In a letter to the Unison, Unite and GMB, the employers said the union’s claim for £250 per employee would have increased the local government pay bill “by £265m and add significantly to the funding gap of £6.5bn facing councils” next year.
Jan Parkinson, LGE managing director, said: “Hard-working council employees help make local government the most efficient part of the public sector. This decision has not been taken lightly. Councils are facing extremely tough choices this year and have to ask their whole workforce to recognise the need to limit spending in all areas.”
Unions have expressed anger that LGE did not make any counter offer, not even the £250 pay rise for those earning under £21,000 promised by the chancellor and the cost of which unions believe was included in the local government financial settlement.
GMB national secretary for public services Brian Strutton said: “That does not wash with us. Those workforce cost increases were factored in to budgets.” He also pointed out that some councils, such as Southampton City Council, had found the money to provide pay rises to the lowest paid within the deal they brokered locally.
Unison’s head of local government, Heather Wakefield, said many other councils had also budgeted to give workers the £250 increase. She also called on local authorities to use the millions in reserves to increase pay.
“Our evidence is that many have already put money aside to pay for this modest increase,” she said. “Meanwhile, council workers are facing the second year of a pay freeze, as inflation continues to climb, and the bills keep on piling up.” Unions calculate that workers have had a 10% real pay cut over the last three years.
However, LGE negotiator Phil White said funding from central government was not ring-fenced and councils had decided that they did not want to spend their reduced grant on pay.
“The employers priority this year is that they want to protect services and jobs as fas as they are able,” he said.
A spokesman for the Department for Communities and Local Government welcomed the decision. “Every bit of the public sector needs to do its bit to help pay off the budget deficit,” he said. “Local government pay is a matter for councils, but these savings will help keep council tax down and protect vital public services. Indeed, freezing pay rather than hiking it will protect frontline jobs.”
During the negotiation period when LGE consulted individual councils, negotiators suggested four possible options to councils - a pay cut, a pay freeze, an increase for the lowest paid, and changes to other terms and conditions.
A letter from LGE to chief executives informing them of the pay freeze reveals that there was “virtually no support” for a pay cut and “only a small minority” supported the chancellor’s suggestion of a pay rise for those earning less than £21,000 a year. The “vast majority” of councils supported a pay freeze, negotiations on terms and conditions, or a combination of both.
The LGE note explains that support for a pay freeze and opposition to negotiations on terms and conditions was strongest in the north-east, north-west and Yorkshire & Humberside regional forums.
Arguments against the approach included the perception that it could cost employers more, that it would impede negotiations already taking place locally and doubts that anything could be delivered in time for April 2011. There was also concern that the focus of talks on conditions was too broad and should focus on sick pay, “a priority for many councils”.
Mr White said LGE would be carrying out further consultation with councils as to how terms and conditions changes might form part of the negotiations for the April 2012 pay round.