News

Council pay rise deal: most staff offered 1% a year over two years

The majority of council employees have been offered a two-year pay increase from April 2016 above the obligatory National Living Wage (NLW) threshold.

The National Employers, who negotiate pay on behalf of 350 local authorities, made the offer to unions today, estimating that it will affect over one million employees in England, Wales and Northern Ireland.

 Most of them – those on salaries starting at £17,741 per year – would receive a raise of 1% from April, with another 1% in April 2017. Those on lower salaries would receive higher increases that take into account the NLW, which will take the minimum hourly pay to £7.20 in 2016.

Cllr Sian Timoney, chair of the Employers’ Side, said: “Despite the challenges now facing local authorities following the Spending Review and new NLW, there is a broad consensus among councils that there should be a pay offer to staff this year.

“This offer balances our commitment to increase the pay of our hardworking employees with the responsibility we have to address the ongoing financial pressures we face.

“We believe that this is a fair deal for employees, given the limits of what we can afford, and a fair deal for the taxpayers and residents who use and pay for the vital services which local government provides.”

The total increase to the national paybill as a result of this offer is 2.4%, or nearly £365m, over two years. Around 0.4% of this figure is designed to meet the public sector’s obligation under the NLW and to start the process towards a £9 hourly pay by 2020.

But the pay offer will not apply to council chief executives, senior officers, teachers or firefighters, all of whom are covered by a separate pay arrangements.

According to National Employers, the offer is final as it is at the “limit of affordability for councils”.

The National Joint Council, responsible for negotiating the pay and terms and conditions of staff in local authorities, will continue to allow individual councils to decide where to place employees.

Each council takes into account several factors, including job size and local labour market conditions, when deciding what salaries will be. Unlike in other parts of the public sector, there are no nationally-determined jobs or pay grades in local government.

Unison's National Joint Council committee is meeting on Monday to consider the offer and subsequent consultation with its members. The GMB union says it will decide its stance after a meeting of representatives on 7 January. Justin Bowden, GMB National Officer, said: "This meeting will decide the GMB stance on the proposals before giving all members a vote on the offer in a ballot."

Both unions, plus Unite, will meet formally in February to decide their next steps.

It is unclear how many staff could be made redundant as a result of the NLW. Research published by CIPD and the Resolution Foundation last month claimed that more than one-fifth of public sectors employers already plan to trim their workforce as a result of the higher pay threshold.

More recently, figures from the Office for Budget Responsibility confirmed that more than 100,000 public sector employees will face the axe over the course of this Parliament.

Mark Lloyd, the new CEO of the LGA, acknowledged in an interview with PSE that councils will have to reduce workforce capacity in the next five years alongside expected service reductions.

Statistics from the GMB union recently put a number to these claims as the union revealed 17 of the first 29 councils across the UK it looked into were floating plans to cut nearly 12,000 jobs as a result of budget reductions. Topping these was Glasgow City Council, planning to send 3,000 staff home over the next two years.