The UNISON NJC Committee met on Thursday 1 August to discuss the contents of the pay claim for 2014/15. The Committee felt the core objectives should be to restore pay levels and ensure that the Living Wage becomes the basic rate of pay in local government.
The UNISON NJC Committee agreed to consult branches on the following two alternative options for the proposed 2014/15 NJC pay claim:
- The Living Wage (LW) hourly rate to be the minimum pay rate, with an equivalent percentage increase on all other spinal column points
- A flat rate increase of £1 an hour on all pay points, which would achieve the current Living Wage as the bottom NJC spinal column point
[A pay scales chart detailing the proposed changes can be viewed here.]
OPTION 1 – A claim based on the Living Wage
The Living Wage (LW) hourly rate to be the minimum pay rate, with an equivalent percentage increase on all other spinal column points – from scale points 5 to 49 – to maintain equal pay differentials.
This claim would represent a £1 an hour increase on the new bottom rate of £6.45 at scale point 5 from 1 October to bring it to the level of the current LW of £7.45 outside of London. Further consideration would need to be given to how the claim applies to the position in London, given London’s separate pay structure and the higher level of the London Living Wage of £8.55 – separately determined from the Living Wage.
This proposed claim is designed to:
- Address the issue of poverty pay at the bottom of the NJC pay structure, but also real and relative low pay for admin, professional, technical and managerial occupations up to the top of the pay scale – which is the lowest from top to bottom within the public sector
- Ensure the continuation of sector-wide collective bargaining, rather than local bargaining – or no bargaining at all – to achieve the Living Wage
- Ensure the integrity of job evaluation as the means to determining grading and pay and agreed Single Status pay and grading structures and therefore prevent a move away from the principle of equal pay
- Prevent a new rash of equal pay litigation in local government which would divert precious financial resources by applying the increase required to achieve the Living Wage to all points on the pay spine
- Provide a clear focus for a high profile campaign which would have popular resonance within and outside the union
OPTION 2 – A flat rate increase of £1 an hour
This option is based on the fact that £1 an hour on the new bottom rate of £6.45 at scale point 5 from 1 October will bring it to the current level of the LW of £7.45 outside of London.
This option has the attraction of simplicity and will also leave all grading structures intact. However from a pay and grading perspective, it would increase the existing compression in the middle to higher pay grades and would have be accompanied by agreement for significant extension of the spine to allow for some upward movement in the top half of the structure.
It should be noted that the Living Wage is normally increased in late October/early November and that there is likely to be at a higher rate by the time of the NJC negotiations in 2014, making the required increase more than £1.
- Where are we at with the Living Wage in local government and in other sectors?
Information currently available from UNISON intelligence suggests that there are a small – but growing – number of councils which have adopted the Living Wage. At least 34 English and Welsh councils have implemented it, although few have formal accreditation – for which they are required to have a plan to apply it to outsourced staff.18 of those paying the LW are in London.
It should also be noted that the means by which LW has been adopted vary across councils – with some employers effectively ‘imposing’ it without negotiation. The absence of negotiation is concerning and could set a pattern for other pay and conditions issues in the future. There are also some variations in the rate and different methods of implementation – some of which raise concerns about the on-going integrity of agreed Single Status pay and grading structures. Not all councils are pledged to annual up-rating.
There are a growing number of councils ‘going it alone’ and making awards above the NJC level and including the LW. In the process some are leaving the NJC bargaining machinery, which is looking increasingly ‘creaky’. Composite D agreed at local government conference this year reinforced support for sector-wide collective bargaining and therefore for retaining the NJC.
There is also further verbal evidence of a growing interest by councils not yet paying the LW in doing so. A high proportion appears to be considering paying the LW. At this year’s Local Government Association (LGA) conference, Local Government section staff carried out a survey of councillors and also asked them for their views and intentions in respect of the LW. Only a small minority were not giving thought to or considering applying the LW in their councils.
There has been considerable success in Further Education and Higher Education in achieving the LW. Around 60% of FE colleges are now paying it and there is a growing impetus in HE.
A clear macro-economic case has been developing for the LW. In a recent study, the Institute for Fiscal Studies (IFS) found that if all wages were raised to £7.85 in London and £7.60 elsewhere, and assuming no job loss, the total gain to the Treasury in the private sector would be between £5.9 and £6.3 billion through lower spending on benefits and tax credits and increased revenue through tax and national insurance. There would be an additional gain to the Treasury of £0.9 billion if all public sector employees were paid the LW – although the higher wages would be paid from the public purse. Broadly speaking, IFS found that for every £1 spent on raising wages to the LW level, around 50 pence returns to the Treasury. A study by Queen Mary College, University of London also found multiple benefits to employers of the LW including reputational improvement, lower staff turnover, greater loyalty and higher motivation
The local economic benefits are also clear. High proportions of local government workers live in the areas in which they work and spend locally. The LW would lead to higher local spending and therefore contribute to the local and macro economies. APSE and CLES research has shown that for every £1 spent in the local economy, a further 64 pence is generated
There are strong moral arguments for the LW as a means to tackle rising inequality, falling incomes and the particular impact of poverty on children and vulnerable groups. Strong arguments can be made for its positive impact on social cohesion, health and the future wellbeing of our society. In any case, outside of London it is less than the official poverty level of £7.47 – which is the equivalent of two thirds of median male earnings. The LW assumes access to social housing and a car, both increasingly rare for the low paid
Within the public sector, local government is the only sector with large numbers of employees below the LW. Only those on the bottom pay point of Agenda for Change in the NHS are (just) below the LW, alongside relatively small numbers in 6th Form Colleges, Further Education and Higher Education
How would the claim be paid for and implemented?
The Employers are very likely to say that either option is unaffordable – particularly if it includes an increase across the pay structure. The Local Government section is examining possible models of implementation, which would achieve the LW as the bottom rate, maintain equal pay differentials and give an increase to all.
While there is no doubt that most councils are strapped for cash, the local government pay bill has fallen for the last 3 years in real terms and is now 23.09% lower than in 2010. In the last year alone, the gross pay bill, including additional pay fell by 10%. Many councils also have reserves, which have also grown significantly in recent years
Consultation is under way and we would appreciate any feedback from members on this issue.