Trade Union Craft JNC Pay and Conditions Submission 2012

Joint Negotiating Committee for Local Authority Craft and Associated Employees

Trade Union Side: UCATT, Unite, GMB, CSEU

Secretary: Steve Murphy Chair: John Allott

UCATT Unite

UCATT House Sovereign Court

177 Abbeville Road 300 Barrow Road

London SW4 9RL Sheffield S9 1JQ

Tel: 020 7622 2442 Tel: 0845 604 1399

Fax: 020 7720 4081 Fax: 0114 256 0935

JOINT NEGOTIATING COMMITTEE FOR LOCAL AUTHORITY CRAFT AND ASSOCIATED EMPLOYEES

TRADE UNION SIDE PAY AND CONDITIONS CLAIM 2012/13

Trade Union Side Local Government Pay Claim 2012/13

1. INTRODUCTION

The Trade Union side look forward to opening constructive negotiations with the Local Government employer’s side. Following the disappointing resolution of the negotiations two years ago, and having being denied the opportunity to enter into meaningful negotiations last year, the Trade Union side are hopeful of a balanced and fair outcome. The Trade Union Side believes that the continuing real term wage cuts for local authority craft workers is unsustainable.

The Trade Union Side are convinced that if allowed to continue they will damage the long term prosperity of the wider UK construction industry and limit the ability of the industry to retain the skilled workforce it needs to meet increased demand into the medium term. Therefore, whilst being mindful of the economic situation and the pressure being brought to bear on Local Government at this time, we strongly hold the view that a positive settlement for the workforce will have to be achieved in the 2012 talks.

Recent pay settlements for employees covered by the Red Book have seen pay freezes, with 0% being offered as the settlement for two consecutive years, which has been compounded by the ongoing inequality with rising pay rates in the construction industry’s private sector. Furthermore, from April 2012 the National Insurance rebate in the Local Government Pension Scheme of 5.3% will be reduced to 4.8%, of which employees have to cover 0.2%. This will result in a reduction of the take home pay for Local Government employees. These facts, along with a number of contemporary issues specific to the Red Book underline the importance of this year’s negotiations.

The Trade Union side recognises that the construction industry has been through a very difficult period in recent years as a consequence of one of the harshest recessions experienced by the British economy in decades.

However, it is not a completely bleak situation. According to industry experts Glenigan, several regions across the UK continued to enjoy a rise in project starts in November 2011, particularly in Wales, the South East and South West of England. Scotland enjoyed an annual growth rate of 10%.

We expect that budget cuts will result in less money being available for new build housing, leading to an increase in refurbishment work next year as Local Government focuses on improvements to their existing stock.

The Joint Negotiating Committee for Local Authority Craft and Associated Employees pay and conditions negotiations offer an opportunity to address the above issues – bearing in mind the construction industry will see signs of recovery and that the cost of living for craft and associated employees continues to rise dramatically.

2. THE FUTURE OF THE JNC ‘RED BOOK’

Since its establishment from the consolidation of a number of local authority craft agreements nearly thirteen years ago the Red Book has provided a positive framework for the negotiation of pay and conditions for Local Authority Craft and Associated Employees. It has been disappointing for the Union side that the last couple of years have been so fruitless for their Local Government employees.

Nevertheless, support for the Red Book has come from both sides of the JNC and on 17 September 2008 the Employers’ side issued a statement recognising the effectiveness of the national craft agreement:

“The national employers recognise that employment issues specific to local authority Craft and Associated employees have been effectively addressed within the existing national negotiating machinery for many years and we therefore remain committed to reaching future settlements through national collective bargaining for this group of valued employees”.

The Trade Union side believes that maintaining the Red Book remains the only way to effectively guarantee that the vast number of employment matters, specific to local authority craft workers is addressed in a standardised manner within this specific context. Examples are: tool allowances, working at heights, payment for work in discomfort and inconvenience, abnormal working time, extra payments for continuous extra skill or responsibility and provisions for apprentices and young trainees.

The existence of a separate national agreement and pay and conditions bargaining arrangement for Craft and Associated Employees is due to the widely accepted view that it is the most efficient way to address the distinct employment conditions of these workers. As a consequence of this distinction, the ‘comparators’ for Craft and Associated employees are similar workers in the private sector construction industry.

The Trade Union side firmly believes that this year’s negotiations must once again demonstrate the importance of the continuation of the JNC national agreement for Craft and Associated Employees, by addressing the distinct concerns of these employees and the ability of Local Authorities to provide quality services to local people.

3. BROKEN PROMISE OF PLEDGED £250 PAY RISE TO PUBLIC SECTOR WORKERS

In a previous submission it was explained that in the June 2010 Budget the Chancellor, George Osborne, pledged a £250 flat pay rise to those public sector workers who earn below £21,000 per annum in 2011 and 2012. The Trade Union Side had asked for this to also apply to Local Government workers who earn below £21,000.

To our greatest disappointment, local government workers earning below £21,000, did not receive the £250 pay rise in 2011, unlike any other public sector groups such as the armed forces, prisons, NHS, teachers and civil servants.

We are firmly of the belief that as local government workers did not receive this flat pay rise they were initially promised in 2011 this issue needs to be taken into account in this pay claim.

4. ECONOMIC CONDITIONS

4.1 Cost of living

This year’s pay and conditions settlement has to take into account the rapidly increasing living costs. Figures from the Office for National Statistics (ONS) show:

·  The CPI (Consumer Price Index) annual inflation is as high as 5.0 per cent in October 2011.

The most significant upward contributions to the CPI 12-month rate to October 2011 came from:

- transport which contributed 1.2 per cent. The largest effect came from fuels and lubricants where prices rose by 15.4 per cent over the 12 months to October 2011.

- housing and household services which also contributed 1.2 per cent. The largest effects came from gas where charges rose by 24.1 per cent over the 12 months to October and electricity where charges rose by 14.9 per cent over the same period.

- food and non-alcoholic beverages which contributed 0.6 percentage points. The upward contributions were widespread with almost all categories having upward effects; the largest rises included meat where prices rose by 5.8 per cent over the 12 months to October, bread and cereals which saw a 6.2 per cent rise.

In the year to October 2011, the all items RPI (Retail Prices Index) rose by 5.4 per cent. The annual change concerning fuel and lighting costs was an increase of 20.2%, which has been the highest figure since February 2009.

Over the same period, the RPIX, the all items RPI excluding mortgage interest payments, rose by 5.6 per cent.

Since January 2011 workers have also had to contend with the VAT increase. VAT has been raised to 20%, impacting on goods and provisions that people buy every day.

The table below shows the rising cost of living from October 2010 to October 2011.

CPI / RPI / RPIX
% change over 12 months / % change over 12 months / % change over 12 months
2010 / Oct / 3.2 / 4.5 / 4.6
Nov / 3.3 / 4.7 / 4.7
Dec / 3.7 / 4.8 / 4.7
2011 / Jan / 4.0 / 5.1 / 5.1
Feb / 4.4 / 5.5 / 5.5
Mar / 4.0 / 5.3 / 5.4
Apr / 4.5 / 5.2 / 5.3
May / 4.5 / 5.2 / 5.3
Jun / 4.2 / 5.0 / 5.0
Jul / 4.4 / 5.0 / 5.0
Aug / 4.5 / 5.2 / 5.3
Sep / 5.2 / 5.6 / 5.7
Oct / 5.0 / 5.4 / 5.6

Anything less than 5.6% for the period 2012/13 would mean a real terms pay cut for Craft and Associated employees.

4.2 Pay settlements / Industry comparators

The following groups have received pay increases either in 2010 or in 2011, some pay rises have already been agreed for 2012.

BATJIC 2% increase from September 2010; 1% increase from September 2011.

JIB (Electrical) 5% increase from 2010

HVAC 2% increase from October 2010

RUF 2% increase from January 2011 and a further 2% from January 2012.

NAECI 4.7% increase from January 2011; negotiations currently taking place for 2012

JIB (Plumbing) 3% increase from January 2011 and repeated in January 2012

CIJC Working Rule Agreement: 1.5% increase from September 2011.

Figures from the Labour Research Department Payline database show a median increase of 2.5% on lowest basic rates for all sectors in the three months to October 2011.

The median for the three months varied little by sector. The private sector median was 2.6%, the public sector 1.7%, the manual median was 2.8% whilst for non-manual it was 2.5%.

The median pay increase for the year to October 2011 was 3.0%, taking into account all the agreements monitored though the LRD Payline database.

There can be little doubt that such pay awards are being achieved on the basis that the wider construction industry can legitimately expect a sustained period of growth.

5. CONSTRUCTION INDUSTRY PERFORMANCE

5.1 Past and current performance

There can be no doubt the last few years have been difficult ones for the construction industry. The advent of the Coalition Government has seen a cut in the Government funded infrastructure projects, such as Building Schools for the Future, resulting in a knock on effect on the whole sector.

However, last year the UK economy grew in the three months to June 2010 by 1.2% thanks to a 9.5% rise in construction output. At the end of October 2010 it was shown that the UK economy grew twice as fast as had been predicted, with GDP expanding 0.8 per cent, well above the 0.4 per cent predicted by economists. According to the Construction Skills Network, the UK economy is expected to have grown by 1.8% in 2010, and the construction industry has grown by about 4-5% in 2010. Public housing and public non-housing were were the most buoyant sectors in 2010, with significant amount of work being carried out.

Whilst this growth spurt in the construction industry can be attributed to completion of public service contracts commissioned by the last government, it is also impressive when contrasted against the severe cuts in demand experienced by the industry during the height of the recession.

Nevertheless, this year the sector’s performance is not as bleak as it might seem. As stated before, several UK regions have continued to enjoy a rise in project starts in November 2011 that was already prevalent in previous months, particularly in Wales, the South East and South West of England. Also Scotland enjoyed an annual growth rate of 10%.

The Glenigan Index for October 2011 increased by 6% on a year ago. According to Glenigan, the underlying value of private housing starts for the UK as a whole has increased for the third time running. The Non-Residential Index for October 2011 is 2% up on a year ago as the effects of Government funding cuts were counteracted by growth in private sector construction. The Civil Engineering Index for October 2011 was 79% up on a year ago. Both utilities and infrastructure starts increased dramatically. The infrastructure sector saw large investments in road and rail station projects in South West and the South East of England.

5.2. Outlook and forecasts

According to Glenigan, the 2008 Pre-Budget report started off a number of large increases in funding for social housing, which have propped up construction starts for the last three years. The underlying value of social housing project starts during 2010 was 30% higher than the level seen during 2007. The government has also pledged to deliver up to 150,000 affordable new homes during five years to 2015.

In his 2011 Autumn Statement, the Chancellor has also announced a number of measures to boost the industry’s output over the next years. Most importantly, the Government will spend £5bn on infrastructure projects over the next three years. Projects covered by this money includes: the electrification of the Leeds to Manchester rail route, a new rail line linking Oxford to Milton Keynes and Bedford, a revamp of the Tyne & Wear Metro and the widening of the A14 around Kettering.

In the Autumn Statement, Government promised to support construction companies that cannot get bank finance with a £400 million fund that will set off projects that already have planning permission. In addition it pledged to use mortgage indemnities to help 100,000 families to buy newly built homes.

Recent figures from the Office for National Statistics (ONS) support this expectation. For example, the total volume of construction output in the fourth quarter of 2011 grew by 0.9% compared with the same quarter in 2010 and by 2.8 for the whole of 2011 compared with 2010.[1]