The future of local government’s national pay bargaining framework was in doubt this week, after it was revealed concern over this year’s proposed settlement crossed the political divide.
The MJ understands some Labour-led boroughs in London, including Barking & Dagenham LBC, lobbied the Local Government Employers for a pay freeze during 2009/10 – prior to the employers’ decision to double its offer to 1% last month.
Sources at London Councils are now pushing for a withdrawal from national pay negotiations, and want to establish a sub-regional bargaining unit which could include neighbouring districts.
Birmingham City Council, meanwhile, has threatened to proceed with a second breakaway from national bargaining, accusing some members of the LGE of being ‘completely out of touch with reality’ during the recession.
Senior London Council sources this week revealed the idea of a breakaway pay bargaining unit for the capital, which had been presented as the brainchild of Conservative boroughs, could yet receive cross-party support.
Although all Labour members on the employers’ side of the National Joint Council voted to support the improved pay offer, privately, some Labour-led London boroughs voiced concerns.
Earlier this year, Barking & Dagenham LBC lobbied national employers for a pay freeze. Other Labour-led authorities backed either a pay freeze or the original 0.5% offer to staff, which was rejected by the unions.
Many London boroughs receive annual grant settlements close to the CLG’s ‘floor’, leaving little room for new liabilities. One senior London Councils source said: ‘Authorities of all political persuasions are now considering their options.
‘This is not limited to Conservative-led authorities. London’s Labour and Liberal Democrat-led councils face the same financial problems as Tory boroughs.’
However, Labour Party sources questioned whether ‘minor’ internal opposition to the improved offer – which would cost local government £240m – was deep enough for Labour boroughs to support a regional pay bargaining unit.
The idea of a London-based bargaining unit is embryonic, but the London Councils source added: ‘We could include neighbouring districts which experience the same financial dilemmas – involving staff costs and policy issues – faced by London boroughs.
‘It’s evident authorities in and around the capital face staffing issues distinct from those faced by authorities in the North East, for example. On many levels, it would make more sense to negotiate pay on a regional or sub-regional basis. The appeal for neighbouring districts, for example, is that HR-related costs take up a huge proportion of their budgets.
‘If they join a sub-regional pay unit… as well as being able to negotiate pay deals that reflect local economic realities, they could reduce administration costs significantly, and generate efficiency savings.’
Writing in The MJ this week, Birmingham’s cabinet member for equalities and HR, Cllr Alan Rudge, launches a scathing attack on the LGE for doubling the pay offer, despite opposition from local government’s dominant Conservative group.
‘We have to ask what the national employers now contribute?’ Cllr Rudge writes. He warns Birmingham’s additional £6m pay bill ‘may have to be met from reduced services and job cuts’.
‘We must find a way of ensuring we have greater local influence, perhaps control of pay and conditions in the future, reflective of the markets we operate within. I’m afraid if this means we break up the arrangements as we currently know them then, regrettably, so be it.’
Roger McKenzie, Unison’s regional secretary in Birmingham, accused the authority of acting in a ‘cynical and politically-motivated way’.
Publicly, Barking & Dagenham LBC would not discuss its pay deal preference. But a spokesman explained the council’s tight financial position.
He said: ‘Barking & Dagenham is facing significant budget pressures looking into 2010/11, in line with authorities across the country.
‘Our priority is to support our communities through these tough economic by holding down council tax and protecting frontline services.’
Writing in The MJ last week, Sir Steve Bullock, chair of the LGA’s HR panel, said national employers accepted it was not possible to satisfy all councils over this year’s deal. ‘A minority wanted a pay freeze, while the rest were split between making a very low offer, or a slightly more generous one,’ he said.
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