However much sympathy local government employers may have for lower-paid workers in the public sector, the fact is, employers have to live in the real world. And the real world is that neither they, nor the general public, will sustain above-inflation pay rises for council staff. The Government continues the fiction that it's ‘nothing to do with us, guv'nor', and that it's up to councils and unions to thrash out a package the former can afford. It then throws a spanner in the works, in yet another example of banana-skin politics, by announcing it wants three-year pay deals without consulting anyone who actually has to implement them. The unions' call for an annual pay claim of 6% for lower-grade staff, including dustmen, social workers, librarians and cleaners, is plainly a starting point for negotiation. In turn, the Government's 2% offer, when prices of fuel and energy are escalating, was always going to be red rag to a bull. The three-year deal simply complicates the issue when inflation has become an unknown quantity. The general public is already well aware of generous final salary-linked pension provision in the public sector when private firms have cut back on similar schemes. And private sector employees have their own troubles, with pay rises lagging behind inflation, although it is true that average rises have been more generous than public sector increases. Local government employers are squeezed between the rock of the Government's 1% grant settlement and the hard place of council tax hitting a ceiling of 4.99% before capping kicks in. This is not, therefore, the time for unions to decide on some catching up on pay, however, pertinent their case. The likelihood is that the 2% offer will have to be bettered. A typical settlement might be 2.5% in the first year, 2.8% in the second and 3.1% in the third, giving an average of 2.8% per annum, which is still way below what the unions want, but still almost 1% more than what the Government desires. But any rises will be funded by efficiency savings, including greater economies of scale through more shared services. Michael Burton Editor, The MJ
