Local government pay: An indecent proposal

This week local government workers received details of the “proposal” (not a formal offer) from the employers’ side in the national pay dispute in England, Wales and Northern Ireland. The proposal is a two year pay settlement of 2.2%, paid nine months late (on 1 January 2015) with an unconsolidated lump sum paid in December 2014 (an unconsolidated lump sum is an amount of money paid separately from salary or wages which doesn’t increase your pay in the long run). The lump sum payments are more generous below spine point 10 (as was the original offer) - £325 from spine points 5 to 7, £150 on spine points 8 and 9, and £100 on spine points 10 and above (this money would be subject to tax and would be paid pro-rate to part time workers.

The quick read guide to the employers' proposal:
Less money in 2014/15 than if we had accepted the employers’ first offer for everyone who earns more than £1,870.25 gross (i.e. before deductions) per month.
Greater savings from the pay bill in 2014/15 than if we had accepted the employers’ first offer (yes you read that right, this proposal is worth less to local government workers overall)
·       A pittance extra in 2014/15 for those earning less – (between £10 and £20 before tax) much less than has been lost by those who took strike action on 10 July;
·       Coming nowhere near our objective of a flat rate increase of at least one pound an hour;
·       Failing to achieve the living wage for workers up to spine point 10.
A failure to come anywhere close to the £1 an hour flat rate claim

This "proposal" isn't an offer - and UNISON's "National Joint Council" (NJC) Committee, representing the majority of all those trade unionists in dispute, has agreed that this is no basis to settle the dispute. However, were the proposal to become an offer, it's possible some of the unions may consider it an offer worth putting to their membership, they'd be wrong.
Does this ‘proposal’ come anywhere near achieving the objectives of our claim? No. For the low paid, we sought to achieve the living wage of £7.65 per hour (£14,759 a year, for a full-time worker based upon a 37 hour week). The “proposal” leaves everyone on spine point 10 and below earning less than the living wage (set in October 2014) until at least April 2016

Does this ‘proposal’ come anywhere near restoring the loss in real income which local government workers have suffered over the past five years? No. Look at the UNISON online pay calculator to see how much workers have lost at different points in the pay spine. A worker earning £12,435 (well below the living wage) is £2,248 a year worse off but is being offered only £1,065 to make up for this, with nothing more until April 2016. A worker earning £24,982 is £4,905 a year worse off but is being offered only £547.62 to make up for this, with nothing more until April 2016.

What does the proposal offer us in the period up to 31 March 2015?
The increase we would receive under this “proposal” in the period up to 31 March 2015 (the period covered by the joint unions pay claim and the employers' original offer) has two elements, the three months worth of a 2.2% pay rise from 1 January, plus the unconsolidated lump sum. 
At spinal point 26, the value of a £100 lump sum (on the national pay spine) is equivalent to 0.45% of annual salary, which if added to the annualised value of a 2.2% offer paid nine months late (0.55%) gives a “cash value” to the increment in income over the twelve months from our settlement date of 1 April 2014 of 1% of salary. So outside London, the employers’ “proposal” (when compared to their previous offer against which we took strike action) delivers nothing in the current pay year for someone on spine point 26, something for people below that point and worse than nothing for people above that point.

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Beyond March 2015

Now someone looking to recommend settling our pay dispute for this miserable “proposal” despite its impact in the current pay year, might argue that my claim that it is worse than our original, fails to take account of the longer term impact of the 2.2% pay increase from 1 January into the future. 

The “proposal” isn’t a single year pay offer, if it formed the basis of a settlement, we would be accepting that we would not receive a further pay increase until April 2016. Since we hadn’t made a pay claim for 2015/16, and hadn’t received any earlier offer, there is no benchmark against which to measure the post-April implications of the “proposal” in the same way as the implications up to 31 March can be compared with the previous (bottom loaded) 1% one year offer.

To judge the longer term worth of the offer, we would have to make assumptions about what local government could win out of a future pay campaign. It is reasonable to assume (in line with government public sector pay policy), without any campaign or industrial action, local government workers would be awarded two successive 1% pay awards, which together would have been worth a combined 2.01%.

Putting it at it its very best, a settlement on the basis of this “proposal” would be gambling away our opportunity to fight for a decent pay rise in 2015 (a year in which a General Election will be fought in large part on the issue of living standards) in return for an increase 0.19% larger than the worst we could otherwise have expected. Our unions should be taking the fight on the rising cost of living to the employers. Britain needs a payrise and accepting a two year pay deal would take away the chance for local government workers to really fight for one.

To put this into some sort of perspective, here is a comparison of the 2015/16 salaries at various points subject to the straightforward percentage increase element of the “proposal” with what those salaries would have been after two successive 1% increases;

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It is incredible that any serious trade unionist would contemplate accepting a settlement based upon the employers’ “proposal”. We need to smash the pay freeze. We need to give union members the chance to spend the run up to the general election fighting for a decent standard of living. 
Trade unionists must make their leaders reject this ridiculous proposal and any offer made along the same lines. Trade unionists must gear up to make the October 14 strike as strong as possible, to show the potential of the labour movement. Finally we must start asking what next in this pay campaign, we need further action, we need better coordination between public sector trade unions and we need our negotiators to go in as hard as the employers' negotiators.