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Councils warned to plan for increase in pay bill

from the Local Government Chronicle: https://www.lgcplus.com/7017710.article

Councils have been warned they need to plan for an increase in their pay bill of up to 6% over the next few years as a result of reforms to the local government pay spine.

Unions and national representatives of councils have been drawing up proposals for a new pay spine structure following the introduction of the national living wage in April. Previous LGC analysis found almost a third of the points on the current pay spine will be wiped out by the end of the decade when the national living wage is set to reach about £9 an hour.

At the recent Public Service People Managers Association’s conference Simon Pannell, the LGA’s principal adviser on employment and negotiations, said the current pay spines “useful shelf life” had “probably finished many years ago”, and added it had since become “a creature of year-on-year compromise and fudge”.

LGC reported last August how local authority chief executives had been warned the new pay spine will cost councils more money.

Speaking at the conference, Mr Pannell said: “We recognise there’s a need to warm up our audience, by which I mean senior politicians and finance directors… If you’re planning for 1% [pay bill increase] in each of the next few years you need to think again and think higher than that. The message that’s gone out is to plan for 4% to 6% over the next two to three years.”

He said negotiators were “very aware” that a new pay spine would have ”a disparate effect on individual councils” but added any claims to the government for new burdens funding were unlikely to be met with sympathy as the sector will not be able to argue the national living wage’s is costing councils any more than it is a whole range of other organisations.

The new pay spine is likely to have around the same number of pay points to the current structure and be introduced over two years, potentially beginning in April 2018.

However, there are concerns a similarly structured pay spine could soon go out of date as the national living wage continues to increase.

A “big issue” those involved in the discussions are wrangling with is how to make sure the new pay spine has a “lengthy shelf life” while not making it “unnecessarily expensive”, Mr Pannell said.

He said a shorter pay spine with bigger incremental steps between pay grades had been considered but discounted as it would result in “significant” winners and losers.

Discussions between representatives and the unions are set to continue until the end of June before proposals will be consulted on again. The period over which the new pay spine should be implemented will form a part of that.

Mr Pannell said it was likely to take two years as doing it any faster would be “far too costly” while implementing it over a longer period of time would be “incredibly difficult for the trade unions to sell” to their members.

16/05/2017


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