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UPDATED: Unions and finance chiefs react to pay offer

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The majority of council employees will receive a 2% pay increase in each of the next two years under a proposal now being considered by unions.

The National Employers, who negotiate pay on behalf of the majority of councils in England, Wales and Northern Ireland, made the offer to unions today. It also includes the introduction of a new national pay spine on 1 April 2019.

As LGC has previously reported the introduction of the National Living Wage will mean almost a third of points on the existing pay spine will be wiped out by the end of the decade. A new pay spine was required to address this and maintain pay differentials between employees.

The Local Government Association say the proposal means that the majority of staff, which is those earning an annual salary of £19,430 or more, would receive a 2% pay rise from April 2018 and a further 2% rise in April 2019.

It said the offer, which does not apply to council chief executives or senior officers, will result in an increase to the national pay bill of 5.6% over two years.

In May this year council finance directors were warned by the LGA’s principal adviser on employment and negotiations Simon Pannell to start planning for an increase in the pay bill of between 4% and 6% as a result of the new pay spine.

In June unions submitted a request for a 5% pay increase for all council staff in 2018-19, which would add an extra £559m to the sector’s wage bill if it was met in full.

Unions said the 5% claim, which seeks to move the lowest paid staff onto the real living wage, is in addition the increase in pay bill as a result of the new spine. 

UNISON head of local government Heather Wakefield said: “Council and school support staff are the lowest paid workers across our public services and are long overdue a wage rise above the 1% cap.

“The government must now come up with the cash to fund local government properly so councils have the money to give their staff a wage increase that doesn’t put more services or jobs at risk.”

GMB union national secretary Rehana Azam said local government workers have experienced the worst squeeze on their pay “in living memory”.

She added: “We have been clear throughout that years of pay pinching from our members must be brought to an end, with decent pay rises.

“We’ll now be giving the employers’ formal offer the careful scrutiny and consideration it requires.”

Jill Penn, president of the Society of District Council Treasurers, said the 2% pay offer was “not surprising”.

“There will have been something built in [to councils’ budgets] but it is just how much has been factored in,” said Ms Penn, who is head of finance and revenue services at Broadland DC, which operates outside of the national pay negotiations.

Sheila Little, president of the Society of County Treasurers and director of finance at Surrey CC, said she was “not too fazed” by the 2% a year pay offer as her council, which also operates outside of the national pay negotiations, had been planning a headline 1.6% pay offer to its staff in each of the next couple of years.

She told LGC government plans announced in the Budget to increase the national living wage by 4.4% from £7.50 an hour to £7.83 an hour from next April “will have more of an impact on councils than any staff [pay] increase… because that will impact on all providers for authorities”.

Duncan Whitfield, strategic director of finance and governance at Southwark LBC, said the 2% pay offer would add an extra £2m on to the borough’s wage bill next year on top of what had already been planned.

He said: “We have of course been aware of ongoing negotiations and have been anticipating additional pressures.”

Mr Whitfield, who is president of the Association of Local Authority Treasurers, added: ”Following on from the chancellor’s Budget statement, where he made no type of commitment to lifting the public sector pay cap, it has become increasingly clear that these financial pressures will be borne by local authorities and will need to be balanced against the extent of services that can be offered.

“Despite these pressures, local government must be able to pay appropriate salaries to recruit and retain staff for a wide range of demanding and challenging roles. The current offer makes some headway to offset the impacts of austerity on local government pay over the last seven years. There may well be some way to go.”

*This story was amended at 4.40pm to clarify that National Employers negotiate on behalf of the majority of councils but not all. 

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