16 pay award

Subject: Pay Award for 2015/16 Director: Director of Resources Decision type: Non-key Classification: This report is open to the public. Summa...
Author: Charity Hines
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Subject:

Pay Award for 2015/16

Director:

Director of Resources

Decision type:

Non-key

Classification:

This report is open to the public.

Summary:

This report considers the annual pay award for the financial year 2015/16 against the current financial background.

To consider:

Members’ views are sought on the options for the 2015/16 pay award.

Next stage in process

Recommendation to full Council

SUPPORTING INFORMATION 1.

Introduction The council is not party to the National Terms and Conditions Agreement for staff but its local terms and conditions provide that the council will pay not less than the National settlement for annual pay awards. The history of pay awards in recent years is as follows: Year

CCC pay award

2010/11 2011/12

1% pay award from 1 October 2010 Nil except for staff on fte salary of £21,000 or less, who received a £250pa increase from April 2011 1% or £250, whichever is the greater from 1 April 2012 1% award from 1 April 2013

2012/13 2013/14 2014/15

1% award from 1 April 2014 plus minimum pay rate increased to then living wage of £7.65 an hour

2015/16

To be determined

National settlement for local government nil nil

nil 1% award from 1 April 2013 2.2% award from 1 January 2015 until 31 March 2016, not backdated. Non-consolidated payments of 0.45% (with higher payments for lowest paid staff and no payments for more highly paid) Included in above settlement

The awards in recent years have all been below the level of inflation and reflect the Council’s very challenging financial situation.

2.

Financial outlook The financial outlook for the Council is set out in more detail in the report to the Overview Committee and Executive on 6 November – Financial Outlook and Draft Budget 2015/16. In summary, the reductions in government funding experienced in the last four years will continue into 2015/16 and later years, and potentially at a greater rate than previously estimated. The local government funding regime changed from 1 April 2013, and as a result the Council’s financial position is subject to greater volatility. As a result, in addition to the savings already planned in previous years of around £1m a year each year, the Council needs to find new ongoing savings of £5.1m by 2018/19. The budget proposals for 2015/16 currently show a small surplus, assuming that all the customer focussed review savings are achieved, but additional savings need to be identified for 2016/17 onwards.

3.

Recruitment and retention of staff The Council is experiencing some staff turnover but it is not at a level that would cause concerns. Recruitment to vacant posts is generally successful, though there is a shortage of suitably qualified and experienced candidates in some areas (eg. Housing, Planning and Legal). Feedback from other authorities in Kent is similar, with those councils closer to London having the most acute difficulties recruiting and retaining staff.

4.

History of pay increases and comparative data

The history of pay awards in recent years is set out in the table included in the introduction. In recent years the awards at Canterbury have been below inflation but above or equivalent to the national local government award. Nationally, the government’s expectation is that pay awards in the public sector will be around one percent a year. Given the financial circumstances, the draft budget to be approved by the Executive for consultation assumes a one percent inflationary pay increase. 5.

National pay settlement for 2014/15 and 2015/16 The national pay award for 2014/15 has only recently been settled, and agreement has been reached on a two year award covering 2014/15 and 2015/16. The national award has been compared with the CCC award for 2014/15 and it effectively sets a minimum award for 2015/16 due to this Council’s commitment to give pay awards that at least match the national award. The national award is very complicated, but the key elements are (more detail in shown in Appendix 2): • • • • •

All staff to receive a pay increase of 2.2% from 1 January 2015; but this is not backdated. The majority of staff to receive a one-off non-consolidated payment equivalent to 0.45% of pay. The lowest paid staff receive a higher percentage pay award, though the lowest pay rates are below the living wage The lowest paid staff receive higher one-off payments Staff on pay levels above £42,000 a year do not receive a one-off payment

In broad terms the percentage pay increase plus one-off payments equate to an award of 1% in 2014/15 and 1.2% in 2015/16. When compared with the Canterbury award for 2014/15, all CCC staff have received a pay award at least as good as the national settlement with the exception of staff on pay points 8 to 23. It is suggested that these staff receive non-consolidated payments in 2014/15 to make up the difference. The cost of these payments is £3,000 in total. The national award effectively sets a minimum for the CCC pay award of 1.2% for 2015/16. 6.

Unison pay claim for 2015/16 The Unison pay claim for 2015/16 is attached at Appendix 1. Their claim is: • •

That the Council awards a 3% increase with a minimum increase of £560; and That the Council adopts the living wage permanently, ie. that when the living wage rate is increased the Council automatically increases its minimum pay rate to match.

7.

The living wage From 1 April 2014, the Council increased its lowest rate of pay to match the then living wage rate - £7.65 an hour, but did not commit to automatically match any increases in the living wage or to become an accredited Living Wage employer. From 3 November 2014 the living wage rate has increased to £7.85 an hour (2.6% increase).

8.

Relevant Council Policy/Strategies/Budgetary Documents - None

9.

Consultation planned or undertaken Meeting with Unison held.

10.

Options available with reasons for suitability Main pay award option A – a 1.2% pay award is made for all staff, effective from 1 April 2015. This is the minimum amount that can be awarded and still keep to the commitment that the pay award would at least match the national award. Provision for the cost of the award has been made in the budget. This would go some way towards recognising the contribution made by staff towards achieving the Council’s challenging savings targets and would send a message to staff that they are valued, though it would be another year when the pay award was less than CPI. Main pay award option B – A higher award is made to staff. This would provide increased recognition but would add additional pressure to the budget. In addition to the above options, the Members need to consider whether to increase the lowest pay rate in line with the increase in the living wage: Living wage option 1 – increase the lowest pay rate to match the increase in the living wage to £7.85 an hour. Living wage option 2 – not match the new living wage rate; award the same pay award across the board. Living wage option 3 – agree to adopt the living wage permanently, so that the Council’s minimum pay rate increases automatically when the living wage rate is increased.

11.

Implications (a) Financial Implications – as set out above. The financial implications of Unison’s pay claim will be reported at the meeting. (b)

Legal Implications – the council has powers to set its own pay awards.

(c) Staffing/resource – the decision on the pay award will impact on staff morale and motivation. Contact Officer:

Tricia Marshall

Telephone:

01227 862 328

Pay Claim April 2015 27th November 2014. Another year has gone by and we are still in a period of austerity and low growth despite claims from central government that things are getting better, Our members only see the financial reality of the current times, that’s increased costs and pay awards far below inflation. Our low paid workers feel this time of austerity most keenly. This year our claim intends to tackle the pressures on the lower graded staff by presenting a weighted claim. So, how well have your staff been rewarded over the last three years. April 2012

April 2013

April 2014

RPI

3.6%

3%

2.2%

Awards

1%

1%

1%

Shortfall

2.6%

2%

1.2%

The council has been able to pay more than the agreed pay awards, both last year and the year before thanks to eleventh hour beneficial grant changes. Yet the council chose to stick to the proposed limited budgets and not give the staff the rewards that they deserved. We have previously suggested a proposal to raise additional income that would have enable the employer to increase last year’s pitiful 1% offer. Yet, for political reasons, the council chose not to take advantage of the proposal. Last year the Pay Board agreed to pay no less than the Living Wage, recognising that this was the minimum level of payment that the City Council should pay its staff and recognising that this rate of pay was a standard that would just provide a basic standard of living but the Board declined to adopt this basic standard as a permanent commitment. We believe the council has a moral duty to commit to the Living Wage in line with many other employers in both the private and public sector.

We are often threatened with redundancies when we talk about a pay rise above budget but the fact is that the Council have been making redundancies annually for the past four years. The reduced level of staff, resulting from these redundancies, has caused additional pressure and stress for our staff and one would expect a decent pay rise that would reflect on that situation and reward staff for their continued devotion to provide a high quality service. But instead we are only offered derisory awards. If the employer truly wants to, Invest in its people, then it should respect and acknowledge the hard work given by the staff and provide a decent budgetary provision and not abuse the loyalty shown by its employees. We don’t expect the council to make redress in full for previous year’s salary shortfalls but we do expect a significant rise to go some way towards bridging that gap. We know that Canterbury City Council is an “Excellent” council and that we punch much above our weight. That excellent service, that cares for and supports the residents and businesses in our district, is provided by a loyal and hardworking staff. So, now is the time to appropriately reward your staff for their excellent service, now is the time Invest in your People and now is the time to give a pay award that goes some way towards spanning the gap between the increased cost of living and the inadequate pay rises given in recent years. We, therefore, submit our claim of a 3% rise or £560 whichever is the greater, plus the permanent adoption of the Living Wage.

Jeff Derham. On behalf of UNISON Canterbury City Branch.

Appendix 2 National Pay Settlement £1,065* (equiv. to 8.56%) on SCP5 with effect from 1 January 2015 (*based on salary at 31 March 2014. Therefore an adjustment will need to be made to take account of the increase to pay that was applied on 1 October 2014 when the National Minimum Wage increased. NJC Circular dated 9 September 2014 refers)  £1,000 (equiv. to 7.93%) on SCP6 with effect from 1 January 2015  £800 (equiv. to 6.19%) on SCP7 with effect from 1 January 2015  £550 (equiv. to 4.13%) on SCP8 with effect from 1 January 2015  £350 (equiv. to 2.55%) on SCP9 with effect from 1 January 2015  £325 (equiv. to 2.32%) on SCP10 with effect from 1 January 2015  2.20% on SCPs 11 and above with effect from 1 January 2015  Deletion of SCP5 with effect from 1 October 2015  £325 non-consolidated payment to employees on SCPs 5, 6 & 7 to be paid in December 2014 (pro-rated for part-time employees)  £150 non-consolidated payment to employees on SCPs 8, 9 & 10 to be paid in December 2014 (pro-rated for part-time employees)  £100 non-consolidated payment to employees on SCPs 11-25 incl to be paid in December 2014 (pro-rated for part-time employees)  0.45% of proposed new salaries to employees on SCPs 26-49 incl, of which £100 non-consolidated payment to be paid in December 2014, and the remaining balance to be paid (non-consolidated) in April 2015 (both payments to be pro-rated for parttime employees)