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Chief Officers Pay Claim Update 2

CHIEF OFFICIALS 2004 SALARIES OFFER.

On the 23 September, 2004 the Employers made the undernoted offer:

2.95% on all Spinal Column Points with effect from 1st April, 2004 and 2.95% on all Spinal Column Points with effect from 1st April, 2005

The offer is a first and final offer over a two year period from 1st April. 2004 to 31st March, 2006 and is the best that can be achieved through negotiations. Branches are being asked to consult members as to whether the offer is acceptable or not. If you have a view please inform your branch secretary.

Chief Officers Pay Claim Update 1

A Pay Claim for Chief Officials for an increase of 3.5% effective from 1 April, 2004 and 5% effective from 1 April, 2005 was lodged with the employers on 29th April, 2004. The Officials side Secretary, Joe Di Paola, has on two occassions written to the employers side secretary Lynne Dickson requesting a response to the claim.

A letter dated 21st July 2004 has now been received that says the appointment to the Employers Side of the JNC have still to be confirmed and it is anticipated that the appointment will not take place until mid August. Branches are being circulated with copies of the correspondence and asked for comments.

2004 Salaries Claim for
JNC for Chief Officials in Scotland
 

1 INTRODUCTION

The salaries claim for Chief Officers in Scottish local authorities is once again set against a background of continuing financial constraint. The real value of incomes of Chief Officers in Scottish local authorities falling compared to equivalent jobs in the England & Wales and private sector.
 

2 CLAIM

The claim seeks a multiple year settlement based on a percentage increase for all Chief Officials commencing at the settlement date of 1 April, 2004.

An increase of 3.5% on all spinal column points effective from 1 April 2004
An increase of 5% on all spinal column points effective from 1 April 2005

The claim does not include other service conditions issues.
 

3 BACKGROUND

Our claim for Chief Officers in local authorities in Scotland is made against this background. The second and final phase of the current pay settlement expires on 31 March 2004. The forthcoming negotiations are set against the background of the Scottish Executive having declared a public sector pay policy of 2.5% for the current year. The IRS Panel of Experts forecast an average increase in earnings for 2004 at 3%. All of these elements will be an influence on the outcome of negotiations.

There continues to be a widening the pay gap between private sector and public sector settlements particulary at senior officer level.. Chief Officers continue to make a major contribution to the operation local authorities and have done so through all the difficult times and the pay award should reflect this contribution. Chief Officers in Scotland deserve to be treated no less favorably than their colleagues in England & Wales and other local government employees.

4. PAY

The Scottish Local Government Chief Officials salaries settlement must seek to:-.

* maintain and improve the living standards of all members.
* reach a settlement that is comparable with senior posts in the public and private sector.
* that is both relevant to all members and considered to be realistic and affordable.

5. ISSUES INFLUENCING SCOTTISH LOCAL GOVERNMENT PAY

The following issues should be taken into account when considering the salaries claim.

* Local government pay has been falling behind other public and private sectors of the economy. Local government workers have seen their gross pay deteriorate against both average and private sector pay in the wider economy from 1992 to 2000 By 2000 local government pay was just 88% of the average gross pay in the economy as a whole.

* The reports of the Income Data Services and The JNC for Chief Executives and Chief Officials of Local Authorities in England and Wales reveal that the median salaries for a range of Chief Officials posts were generally higher in England and Wales than in Scotland.

* The Management Pay Review report from Income Data Services reveals that for the three months to January 2004 that managerial and professional salaries rose by an average 2.9%, while the median rise was 3%. NHS Chief Executives salaries have risen by 63.9% as opposed to Local Government Chief Executives of 61.7% in the period 1992 to 2002.

* Only 15% of Chief Executives in Scotland earn more than £100,000 per annum

* Average wage awards were 3% for the economy as a whole - 3.4% in the public sector, whilst the private sector was 2.9%.

* Recent pay settlements within the Scottish public sector have been linked to modernisation and flexibility.

* Reports of the Income Data Services identify that a number of Scottish local authorities reported recruitment and retention problems for a number of key professional posts.

6. STATISTICS

a. Inflation

The headline rate of inflation - the annual rise in the all items Retail Price Index (RPI) which includes mortgage interest payments and indirect taxes - rose to 2.6% in March from 2.5% in February, 2004.

The Consumer Price Index (CPI) which the government uses to guage interest rates, fell to 1.1% last month from 1.3% in February, 2004. The CPI however does not include housing costs and so the .25% increse in mortgage rates is not reflected in CPI. Almost all employees have expenses relating to housing. So the RPI is the correct figure to use when considering the cost of living.

b. Inflation Forecasts

Forecasters reported by Industrial Relations Services (IRS) predict headline inflation will rise to 3.4% by the third quarter of 2004, thus giving an average of 3% for the year.

c. Average Earnings

The GB whole economy average earnings growth rate was 4.9% in the three months to February 2004 compared with a year earlier. This is up 0.2 percentage points on the January rate.

However it is the private sector that is now powering ahead, not the public sector. Earnings in the private sector rose by 5.1% in the year to February (up 0.3 percentage points on the January rate) whereas public sector earnings growth was static at 4.2%. Earnings in the services sector rose by 5.2% (up 0.1 percentage point from January) and in the manufacturing sector they rose by 3.5% (unchanged on January).

The measure of average earnings that excludes bonuses was also up by 0.2 percentage points on the January rate. It stands at 3.8% up on this time last year.

d. Earnings Forecasts

There are conflicting pressures on earnings growth at the moment. The government is attempting to restrain wages in the public sector (a move opposed by unions), but a return in economic confidence means that some areas (especially finance and public administration sectors) are planning on recruiting. A Chartered Institute of Personnel and Development (CIPD) survey reveals that 53% of organisations are planning to recruit in the current quarter. This is at a time of continuing low unemployment.

However earnings growth is not being shared across the economy, with those working in the manufacturing and public sectors seeing unchanged, and falling, earnings growth respectively. The IRS panel of experts does not expect the current rate of average earnings growth to be sustained, with the consensus opinion that earnings growth will slow to 4.1% in the middle of the year, and average 4.1% over the year.

The Royal Bank of Scotland said "With economic growth returning above trend in [the second half of 2003], wage inflation in the private sector is likely to increase. With government spending largesse to continue through to the end of the 2005/6 financial year, there is no reason to expect any significant slowdown in public sector recruitment and, therefore, wage pressures.”

7. CONCLUSION

The Officials' side believes this claim to be realistic approach to Chief Officers salaries. The claim shows the necessity for an appropriate increase for Chief Officers in Scottish local authorities in 2004 which will ensure at least equality of treatment with all other local government bargaining groups. All employees deserve a pay increase that maintains and improves their living standard. The claim draws on the comparisons made in respect of the wider wage economy. Consequently, the Officials' Side looks forward to the Employers' early response.

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