Local government pay and industrial action: Unison settles but there’s trouble in store

The prospect of a local government-wide strike over pay across England, Wales and Northern Ireland ended last week as the biggest union, Unison, agreed to accept employers’ 2.475% pay offer for 2007-8.

Unison, which represents 850,000 council staff, including many in social care, had balloted members on strike action – unlike fellow unions GMB and Unite, which accepted the offer last month, albeit reluctantly.

But the 52% vote in favour of action was insufficient to guarantee an effective strike, particularly as under 20% of those balloted actually voted. This forced the union to accept the deal, bringing to an end a stand-off lasting seven months. The rise will now go into employees’ pay packets, backdated to April.

However, attention is already turning to the pay negotiations for 2008-9 and beyond, which this year’s protracted process has delayed.

And, already, the potential for conflict looks huge, with the unions, employers and government – typically seen as the invisible party to council pay negotiations – taking increasingly divergent positions on the way ahead.

For ministers, keeping down public sector pay is a key plank of their anti-inflation strategy. In last month’s comprehensive spending review, the government set a pay growth target of 2% per annum from 2008-11 in the public sector.

Such thinking is reflected in the increases in government funding allocated to councils for 2008-11.

Once funding to cover private finance initiative projects are taken into account, authorities will receive increases of 3.8%, 2.8% and 2.6% in 2008, 2009 and 2010, amid significant pressures on services, notably adult social care. The government has also warned that it expects council tax increases to be less than 5% per annum, reducing the scope for local residents to fill the gaps in government provision, leaving councils little room to exceed the government’s 2% target on pay.

This situation is totally unacceptable to the unions.

Fourth year of no rises

Unison head of local government Heather Wakefield (pictured) points out that 2007-8 is the fourth consecutive year in which council workers have received a sub-inflation increase in pay (see Pay versus inflation). She rubbishes the idea that public sector pay settlements are key inflationary drivers and adds: “There’s no way public sector workers will stand for 2% next year or the year after that.”

Stuck in the middle of this are councils and Local Government Employers, which represents English and Welsh authorities on pay issues.

LGE has its own agenda for the forthcoming negotiations. Not only does it want a three-year deal on pay, but it wants a thorough review of the “green book” – the national agreement drawn up in 1997, which sets out requirements on terms and conditions, including holiday, hours, sick pay and overtime.

Jon Sutcliffe, principal strategic adviser at LGE, says councils want the existing system simplified and made more flexible, with fewer national standards and more scope for local discretion. But he admits that the financial predicament councils have been left in by the CSR will make it “extremely challenging” for the LGE to negotiate significant reforms to the green book or achieve a three-year deal.

“There’s no secret that with negotiations you have to give a little to get something,” he says.

He is blunt about the likelihood of achieving the government’s ambition of a 2% rise per year from 2008-11, adding: “With a multi-year deal you need to give some kind of premium on it and that’s not easy to envisage with a CSR which says 2%, 2%, 2% – that’s not going to get us a deal.”

In the unions’ mind, the 2004-7 deal provides a bad precedent for a three-year agreement, also encompassing reforms to pay and conditions. This offered staff annual increases of 2.75%, 2.75% and 2.95%, along with the implementation of equal pay reviews to iron out historic differences in salary between male and female-dominated occupations, and improved training and development.

Brian Strutton, national secretary for public services at GMB, says: “Our last multi-year deal was a disaster: not very good pay increases and all of the commitments to ending unequal pay and improving training and development were reneged on.”

Equal pay failings

In July, Wakefield told Community Care just one-third of councils had completed equal pay reviews as of the April 2007 deadline, and said Unison was taking up over 70 cases on behalf of women.

The experience leaves Strutton gunning for a “single-year deal with as big a [percentage increase] as we can get”.

The unions will move first on the 2008-9 negotiations, with Unison, GMB and Unite each consulting their branches on a claim before agreeing a common line. Strutton says he wants to achieve this by December.

LGE consulted authorities on some ideas for green book reform in May, but Sutcliffe says it will be doing further consultation over the next couple of months before issuing proposals in the new year.

He says it wants to scrap part 3 of the green book, which lays out national standards in “non-core” areas such as rates of additional pay for weekend working. He says these were inserted as “transitional” standards in 1997 and councils have always had the right to set up local arrangements in these areas, but only a minority have done so.

LGE will also be negotiating for a decrease in the volume of core national standards in part 2 of the green book.

Sutcliffe says that while some areas, such as the 37.5-hour working week, should remain untouched, other areas, such as how councils structure working hours, should be left to local discretion.

In the longer-term, LGE is suggesting a move towards a “total rewards” structure, under which employees choose from a selection of benefits packages, under which, for example, pay is traded against holiday.

The LGE’s plans have not been well received by Strutton or Wakefield.

Strutton says he has been calling for green book reform “longer and louder than most” and suggests moving towards a “more efficient” local government workforce in which fewer staff each receive greater rewards.

But he claims the employers’ agenda is a cost-cutting one and for that reason will be rejected by GMB members.

On total rewards, he says: “They can lead to attractive packages and they can also be a Trojan Horse for reducing terms and conditions. My gut instinct is that they see it in the latter sense.”

Benefits packages

Wakefield warns that, under total rewards, lower-paid, part-time workers, most of whom are women, would have less choice over benefits packages than better-paid counterparts because, for instance, many cannot afford to be in the pension scheme.

She says Unison will be calling for improved benefits for council staff, which she claims compare poorly to NHS counterparts, and better training and development – alongside a pay deal that compensates council staff for the past four years.

She sees industrial action over next year’s pay round as highly likely, particularly given plans for a co-ordinated campaign among public sector unions against the government’s 2% stance.

Strutton, who is more cautious on the prospects for a strike, says unions have learned from 2007 that a divided front strengthens the government’s and employers’ hands. A case in point was the fact GMB and Unite decided to accept the offer after consulting members, and Unison backed an industrial action ballot.

He adds: “One of our big lessons from 2007 is that we all need to stay in line in our negotiations and that’s what we are going to be trying to do in 2008 because we all face the same issue which is central government pay policy.”

All of this leaves the prospects for a negotiated settlement between council employers and unions looking bleak, with an industrial dispute looking ever likely.

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Mithran Samuel

This article appeared in the 8 November issue under the headline “The shape of disputes to come”