Local Government (NJC) Pay Award 2014-2015 - Letter to George Osborne
Heather Wakefield 020 7121 5329
Rt Hon GeorgeOsborne MP
Chancellor of the Exchequer
1 Horseguards Road
London
SW1A 2HQ
14 January 2014
Dear Chancellor
LOCAL GOVERNMENT (NJC) PAY AWARD 2014-2015
I am writing to you as the Head of UNISON’s Local Government, Police and Justice section on a matter of critical importance to over 1.6 million employees working primarily in local government and schools, on local government pay and conditions. 600,000 of them are UNISON members.
The subject of my correspondence is the forthcoming pay settlement for the National Joint Council for Local Government Services (NJC), covering local authority and school employees in England, Wales and Northern Ireland. This will take effect from 1 April and the Local Government Employers are currently consulting local authorities over their offer. I anticipate a response from them in mid-February.
Basic pay fallen by 18% plus local cuts to conditions
I am writing to ask you to recognise the severity of the financial position in which many of my members find themselves and to take steps to ensure that they enjoy a pay increase this year which compensates for the 18% real-terms loss of earnings they have suffered since your government took office. I believe that they also deserve a pay increase which brings their pay into line with other public service workers doing the same or equivalent work. There are means at your disposal to enable the Local Government Employers to award a pay increase which would start to compensate for the hardship my members are suffering – outlined later in my letter. I would ask you earnestly to employ them.
This hardship is the result of a number of factors – a unique three-year pay freeze from 2010 – 2013, a below-inflation pay settlement last year and failure of the government and local government to apply the £250 you yourself promised to public sector workers earning below £21,000 in 2010 and 2011. Indeed, NJC pay increases have been below inflation in eight of the last sixteen years – in 1998, 2005, 2007, 2008, 2010, 2011, 2012 and 2013. On top of this, severe reductions in council budgets since 2010 have resulted in additional local cuts to pay-related conditions such as car allowances, unsocial hours’ payments, holiday pay and sick pay - forcing many of my members into debt and borrowing.
Pay lagging behind the rest of the public sector
This pay ‘austerity’ also means that my members’ pay and conditions are now lagging far behind the rest of the public sector - and much of the equivalent private sector remuneration too. Many earn barely more than the National Minimum Wage for demanding, skilled work. The consequences for individuals and their families are severe, the impact on the budget for in-work benefits obvious and the negative electoral implications for the government very easy to predict.
Women the hardest hit
Over 77% of the local government and school workforce of 1,600,000 are women, already facing the brunt of increases in childcare, eldercare, energy and travel costs, as well as cuts to in-work benefits. 55% of all jobs are part-time and over 90% of those part-time workers are women. Many have more than one job to make ends meet. Part-time hours are increasingly being cut, taking some below the threshold for working tax credits.
The workforce is deployed over more than 200 occupations, with a large proportion employed in school support and childcare roles, social work and social care, building and street cleaning, catering and admin and customer support jobs. Others work in human resource management, planning, economic development and as lawyers, accountants and engineers. The top rate of pay is £42,032, compared to £98, 453 for the equivalent Agenda for Change rate in the NHS and higher rates for all central government departments and all other public sector bargaining groups.
Poverty pay for the school and council workforce
Of key concern is the extent of poverty pay among the local government and school workforce – a matter of recent public concern to yourself and other Coalition Ministers who have called for action to end low pay and implement the Living Wage. Many of those in higher paid, ‘professional’ jobs are also paid below the equivalent rates in the private sector. The following facts about NJC employees speak for themselves:
- Around 200,000 earn between £6.45 and £6.90 pence an hour
- 510,000 earn less than the Living Wage of £7.65 an hour – almost one third of the workforce – according to the Local Government Employers’ own figures
- Over 1 million earn less than £21,000 – but did not receive the £250 you promised as Chancellor in 2011 and 2012
- In 2010/11 half earned less than £11.15 pence an hour, while the equivalent private sector figure was £11.36 pence and three quarters earned less than £14.84 pence, compared to £17.15 pence in the private sector – according to a report for UNISON by the New Policy Institute in 2012
- NJC pay is unique in trailing the private sector for many professional and technical jobs
Economic and fiscal impact too
Low pay in local government is having devastating personal effects, but also significant and negative macro-economic and fiscal impact too. All of these factors could be alleviated by a pay award this year which makes the Living Wage the lowest NJC pay point and starts to compensate all NJC employees for the 18% loss of earnings they have suffered since 2010. This would require an increase of £1.20 an hour on the lowest pay point. We are also seeking an increase of £1 an hour for all those above the Living Wage level to begin to compensate for their loss of earnings and to maintain equal pay-proofed pay structures.
A decent pay rise is affordable
With cuts in council budgets of between 25% and 40%, many councils will no doubt claim that they cannot meet our claim. However, work for UNISON by the New Policy Institute in late 2013 shows that over half the cost of meeting it would be re-couped by the Treasury through reductions in benefit spend and increased tax and National Insurance revenue. If ‘re-cycled’ to local authorities, this money would make our claim affordable. Furthermore, the increased spend amongst a large group of citizens would help boost our fragile economy and improve local economic performance.
How much would central government save?
I am attaching a copy of the research note produced by NPI. As you will see, they have produced calculations of savings on pay increases of £1 and £1.20 an hour, which would cost £1.42 billion and £1.7 billion respectively. Central government would save £630 million from increased employer National Insurance and tax take combined with reduced benefit expenditure on a £1 an hour increase and £750 million on an award of £1.20 pence an hour. If indirect taxes generated by increased spending by local government workers is added to these figures, the savings increase to £645 million and £775 million respectively. If these savings were ‘re-cycled’ to local government, councils would be required to meet only 45% of the cost of paying the Living Wage to the lowest paid and giving other employees an increase which starts to compensate for pay they have lost since 2010.
I am sure that you will appreciate the hardship and inequality facing local government employees and understand the contributions that their increased earnings could make to the revival of our economy. I would be very happy to meet with you to discuss the issue of low pay in local government and our claim at any time. It might be particularly beneficial to discuss these issues before the Local Government Employers meet to decide on their offer to our members on 13February.
I look forward to hearing from you.
Yours Sincerely,
Heather Wakefield
National Secretary
Local Government, Police and Justice Section
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