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Osborne's £250 pay rise 'not obligatory'

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Local government employers may not have to award low paid workers the £250 pay rise set out in the Budget, chief executives have been told.

Local Government Employers (LGE) officers have been in discussions with civil servants about what the chancellor’s protection for public sector workers earning less than £21,000 a year will mean for local government.

George Osborne said in March that there should be “a two-year pay freeze for public sector workforces, except for workers earning less than £21,000 a year who will receive an increase of at least £250 per year in these years”.

In a letter, LGE chief negotiator Phil White said the chancellor’s statement did not affect the pay freeze already imposed in 2010-11.

In the 2011-12 negotiations, Mr White said “the government will expect local government to show similar restraint on pay to the rest of the public sector; it will also expect local government to have regard to the government’s fairness agenda”.

However, he added, “the government will not necessarily expect the 2011-12 settlement to take the exact form of the Budget announcement”, and he confirmed that any adjustments would be on the pay spine and therefore “be proportionate for part-time employees”.

Mr White’s letter also revealed that government assumptions about local government pay over the next two years will be fed into the October spending review, and consultation with employers on a negotiating position for 2011-12 will only commence once the outcome of the review is known.

Will Hutton’s review of fair pay, which will look at salary disparity in the public sector, and John Hutton’s review of public sector pensions, “will provide an important backdrop to negotiations”, Mr White added.

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