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2008 SCOTTISH LOCAL GOVERNMENT PAY REVIEW

Compendium of Pay Information.

INTRODUCTION

The second and final stage of the current pay settlement, reached on 20^th, June 2006 (SJC/26 & SJC/27) expires on 31 March 2008. The Trade Union Side of the Scottish Joint Council shall be required to submit a common pay and conditions claim to the Scottish Employers at the Annual meeting of the Scottish Joint Council to be held on 14^th November, 2007. This will be the fifth set of negotiations under the separate Scottish bargaining machinery and the Scottish Executive's financial arrangements. The employers' side and the trade union side have agreed to seek to reach an early settlement, preferably before the 1^st April, 2008.

BACKGROUND

The forthcoming negotiations are set against the background of the implementation of Single Status Agreement and new pay and grading structures with assimilation to the new spinal column of hourly rates.

PROPOSED TIMETABLE OF KEY DATES

The following is a timetable of key dates: -

PREVIOUS TRADE UNION CLAIMS

Since 1999 and the formation of the Scottish Joint Council there have been three previous claims submitted by the trade union side:~

1999

The First claim submitted was:~

• A general increase of £500 or 5% whichever is the greater.
• Further action to end low pay.
• Scottish Joint Council Joint Working Party on employee friendly and family friendly flexibility.

2000

The Second claim submitted was:~:

• A minimum rate of £5.00 per hour; with
• An increase of 5% on all pay points; or
• A flat rate increase of £500.

The settlement should run for a period of a year from 1 April 2000 to 31 March 2001.

2004

The Third claim submitted was:~:

• A flat rate increase of £1000 per Annum on all Spinal Column Points, underpinned by a Minimum Wage of £6:00 per hour with effect from 1st April, 2004.

• An increase of 5% on all Spinal Column Points with effect from 1st April 2005.

The settlement should run for a period of two years from 1^st April, 2004 to 31^st March, 2006

2006

The fourth claim submitted was:~

• The settlement should run for a period of two years with effect from 1 April 2006 to 31 March 2008.
• An increase that accommodates either a percentage and/or a fixed sum (for example £1.000 or 5% whichever is the greater), or a combination of both, applicable to all Spinal Column Points.
• A revision of the bottom Spinal Column Points.

NJC for ENGLAND, WALES & NOTHERN IRELAND

The Trade Union Side of the National Joint Council for Local Government Services in England, Wales and Northern Ireland submitted a claim on 14^th February, 2007 for:~

• An increase on all spinal column points of 5% or £1,000 (whichever is the greater) for a period of one year from 1 April, 2007. (This would result in a minimum point of £6.30 per hour).
• An increase in annual leave of 1 day for all employees.
• An increase in the minimum leave entitlement of 25 days
• A reduction in the standard working week to 35 hours, without loss of pay.

The employers, at the NJC meeting held on 20^th March 2007 responded with an offer of 2% on all Spinal Column Points. UNISON is now consulting with their branches given the employers failure to make an improved offer.

SCOTTISH TEACHERS SETTLEMENTS

The Scottish Negotiation Committee for Teachers reached the undernoted agreement:~

From 1 April, 2004 an increase on all spinal column points of 2.9%

From 1 April, 2005 an increase on all spinal column points of 2.9%

From 1 April, 2006 an increase on all spinal column points of 2%

From 1 April, 2006 an increase on all spinal column points of 2.25%

From 1 April, 2007 (Yet to be settled)

POLICE SUPPORT STAFF IN SCOTLAND.

The Police Support Staff Council (Scotland) settlement of:

• From 1 September, 2005 an increase on all spinal column points of 2.95% with a further 0.45% conditional on negotiations on terms and conditions of employment.

• From 1 September, 2006 an increase on all spinal column points of 2.25% with a further 0.25% conditional on negotiations on terms and conditions of employment.

• From 1 September, 2007 an increase on all spinal column points of % with a further % conditional on negotiations on terms and conditions of employment.

ISSUES INFLUENCING SCOTTISH LOCAL GOVERNMENT PAY

• The trade unions claim that there is within Scottish local government a continuous problem of Low Pay, however, this is contested by the employers' side.

• The stronger growth in full time women's hourly earnings excluding overtime compared with men's has meant that the gender pay gap has reduced to 12.6%, down from 13.0% in 2005. The gap showed little change when measured using the mean full time hourly earnings excluding overtime, from 17.0% in 2005 to 17.2% in 2006. This was due to higher growth in the earnings of full time men in the top decile.

• In July, 2005, a survey conducted by CoSLA revealed that 60% of the local government workforce were paid between spinal column point 3 - 15 (This equates to £11,211 to £15,828 - w.e.f. 1.4.07)

• A number of Scottish local authorities reported recruitment and retention problems for a number of key professional posts. At the same time claiming that recruitment into post at the lower end of the scale is not a problem. In some instances local adjustments have been made to overcome these market difficulties.

Trade Union Low Pay Targets

UNISON's UK National Pay Policy is to continue to campaign for a minimum wage figure of half of male median earnings, with a minimum wage target of £6.50 per hour.

The trade unions also continue to campaign for the Europe's Decency Threshold of 68% of all full-time average earnings currently £568.50 per week giving a threshold of £386.58 per week / £10.45 per hour And /or the Low pay Unit's Low Pay Threshold of two-thirds male median earnings currently £625.30 giving a threshold of £418.95 per week. / £11.32 per hour

Furthermore, the Trade Unions continue to campaign for a statutory national minimum wage of £6.75 per hour / £13,021 per annum.

Currently £6.74 is point 11 on the Hourly Spinal Column, and point 8 of annual spinal column £6.80 or £13,134 per annum

The London Living Wage has increased by 15% from 7.05 per hour in May 2006 to £7.20 per hour. It is claimed that anyone earning less than £6.25 per hour is at or below the poverty level in London.

MINIMUM WAGE

The current Statutory National Minimum Wage for

For those over 21 its £5.35 an hour/£197.95 per week/£10,321per annum - based on a 37 hour week

For those 18-21 its £4.45 an hour/£164.65 per week/£8,585 per annum - based on a 37 hour week

For those 16 -17 its £3.30 an hour/£122.10 per week/£6,366 per annum - based on a 37 hour week

Over/….

From 1^st October, 2007

From 1 October, 2007 for those over 21 it increases to £5.52 per hour / £204.24 per week / £10,649 per annum

From 1 October, 2007 for those 18 - 21 it increases to £4.60 per hour / £170.20 per week / £8,874 per annum

From 1 October, 2007 for those 16 - 17 it increases to £3.40 per hour / £125.80 per week / £6,559 per annum

UNISON submitted evidence to the Low Pay commission in favour of a minimum wage of £6.75 per hour.

POLITICAL CONTEXT

Following the May elections we now have an SNP minority administration with new departments led by SNP ministers. This gives considerable scope for administrative action although always with the risk that action could be challenged in Parliament and the Local Government and Communities Committee will therefore have an important scrutiny role. Local government comes under the remit of the Cabinet Secretary for Finance and Sustainable Growth, John Swinney MSP. This is a very large portfolio and the new minister has made a limited number of announcements to date. He has however indicated to local government audiences that resources will be tight.

The local government elections have delivered a diverse local government structure largely based on coalition arrangements. The impact on CoSLA is at the time of writing unclear although there will obviously be more coalition and cooperative working at national and local level. In practice there have not been huge differences between councils on staffing issues in Scotland and therefore a common employer position should not be an issue.

A key issue is the new government's approach to local government finance. The biggest threat is the local income tax assuming the SNP and Lib Dems can reconcile their different proposals. This not only threatens members jobs but both parties plans fall far short of the income currently raised by the Council tax. In addition there are commitments to a freeze on the council tax and taking small business out of the system. Add to this the disposal of assets, ambitious efficiency savings and full cost recovery for the voluntary sector and you get a very large financial commitment at a time when aggregate UK expenditure is unlikely to grow with consequential budget constraint in Scotland. This will become clearer in the autumn when the Scottish Executive will have to publish their expenditure plans for the next financial year.

We can therefore expect the efficient government initiative to be pursued vigorously with targets at least as exacting as under the previous administration. The Cabinet Secretary has already announced new funding for the next stage of shared services implementation.

Linked to this is public service reform. Whilst there remains a cross party consensus for the Scottish public service model the precise direction of travel remains unclear. Radical boundary changes seem unlikely but there is considerable scope for pilot schemes and other funding incentives for greater joined up working that could have significant implications for local government.

At UK level the government has set a public sector pay policy of limiting pay awards to 2%. The Scottish government has not as yet published pay guidance for 2007 and UNISON has raised this issue with the new Cabinet Secretary. Whilst pay guidance is influential and will be reflected in the budget settlements, it is not binding on local government.

• Some Local authorities claim that the cost of implementing the pay and grading review is estimated at between 6% to 10% of the payroll.

• The trade unions seek to work with the Employers to try to promote the need for increased resources for both services and pay to the Scottish Executive.

ECONOMIC FACTORS

Latest Pay Settlement Trends

According to Incomes Data Services (IDS) the median settlement level over the whole economy for the three months to the end of March, 2007 was 3.5% continuing the rise from the 3.0% median figure that remained constant for most of 2006. The higher inflation is going to continue to feed through to settlement levels.

Negotiations will take place against a backdrop of higher inflation, including RPI remaining high at 4.5% for April, 2007. IRS Pay Intelligence reported in April 2007 that its panel of experts sees headline inflation averaging 4% in the second quarter of 2007, down 0.4 percentage points on the first quarter. It is then expected to fall further over the remainder of 2007, to average 3.7% over the year.

Meanwhile, the unemployment rate is currently 5.5 per cent, unchanged on the quarter, but up 0.3 over the year, indicating that the labour market remains tight.

Figures from Industrial Relations Services (IRS) show an average earnings growth across the whole economy is 3.7% (without bonus) in the quarter to April, 2007. Public sector earnings in the three months to April rose by an average of 3.1% while the equivalent figure in the private sector was 3.8% The Industrial Relations Services (IRS) panel of experts expect that earnings growth (including bonus) will average 4.4% over 2007.

National statistics report that average weekly hours worked in the three months to February 2007 were 37.2 for all full time workers. Broken down by gender, the average weekly hours worked by men in full-time employment over this period ran at 39.o hours, compared to 34.1 hours for women. The corresponding hours for part-time workers ran at 15.7 hours for men and 15.8 for women.

Source: ONS

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