Council workers all over the country are about to get a substantial bump in their pay, marking the end of years with salaries that were either capped or frozen. This increase is part of a plan to improve the retention and recruitment of local authority staff and bring their pay more in line with what’s offered in the private sector.
The National Joint Council (NJC) has put forth a proposal for a deal, suggesting that most council employees will see a £1925 boost in their annual pay. This translates to a 10.5% increase for those on lower pay scales, and a 5.9% rise for those with the highest salaries. The new pay rates are scheduled to kick in from April 2023.
Years of Pay Restraint
The proposed pay rise comes after almost a decade of restraint on local government wages. Pay was frozen for two years from 2010, before being capped at 1% annually until 2018. This led to real-terms pay cuts for council staff, as inflation outpaced the salary increases.
Unions estimate that some workers lost as much as 25% from their pay packets over this period, leaving many struggling with rising bills. There have been growing calls in recent years to remedy this pay restraint, which was also seen as impacting retention and recruitment for key roles.
What Do The Unions Say?
The pay offer has been largely welcomed by unions as a positive step, but some have argued it does not make up for the years of lost earnings.
UNISON, the UK’s largest union, says the proposed deal is a “big improvement” on previous offers, but insists there is still “a way to go” for many lower-paid staff. The GMB union welcomed the rises, but warned there were “still more battles ahead” on pay.
Unite called the offer “substantial progress” after years of pay freezes, but added their members had suffered a “huge drop” in income over the past decade. The unions will now ballot members over the proposed deal.
Staff Shortages and Recruitment Problems
The main reason for the better pay offer is the increasing staff shortages in various council services. Essential frontline positions such as social workers, planners, and HGV drivers have been particularly challenging to fill.
Certain departments in local authorities are experiencing vacancy rates exceeding 15%. Additionally, retaining staff is an ongoing challenge, as council workers are often enticed by higher salaries in the private sector.
Increasing pay is considered essential to attract and retain talent in roles that play a crucial part in providing vital services for local communities. Uncompetitive wages have made recruitment more expensive and challenging.
How Will Councils Fund The Pay Rises?
The pay rises will lead to substantially higher wage bills for councils, at a time when budgets are already under pressure. The Local Government Association (LGA) estimates that every 1% increase in pay costs local authorities around £250 million.
Councils urge the government to fully fund wage increases, avoiding additional pressure on town halls to seek further savings.
Options like increasing council tax or fees and charges could also be considered. But additional funding from Whitehall is ultimately needed to avoid negatively impacting other areas of council budgets.
Impact on Services
Some councils have warned that larger than expected pay rises could lead to reductions in services or problems setting balanced budgets. This comes on top of existing pressures from rising inflation, energy costs and demand.
There are concerns areas like libraries, bus services, street cleaning and maintenance could be hit by councils needing to tighten budgets. Staffing shortages may also worsen if councils cannot afford as many workers.
However, unions argue that after years of real-terms pay cuts, a meaningful rise is long overdue. In the long run, it should lead to improved recruitment and retention, reducing staffing pressure on frontline services.
Regional Variations
The impact of the pay deal is likely to vary across the country, depending on the financial pressures individual councils are facing. Some poorer urban regions and county councils may find the rises harder to absorb.
Affluent southern regions or financially stable district councils will find it easier to absorb the wage increases without difficulty. Rural and coastal authorities could also face additional challenges.
This reflects the differing abilities of councils to raise revenue through sources like council tax. Poorer regions are the most dependent on central government grants being increased to cover the rising pay bills.
Ongoing Negotiations
The NJC pay deal is still in the process of being negotiated and requires final approval in the upcoming months. The agreed-upon pay scales will be formally incorporated into employee contracts.
Union members will vote on deal acceptance; ongoing discussions will determine starting salaries and pay progression details. It’s possible that the wage increases may not take effect until later in 2023 for certain roles.
Councils are expected to continue urging the Treasury for full funding leading up to the next spending review. After enduring pay cuts, hardworking council staff anticipate a substantial increase, signaling positive change on the financial horizon.
Conclusion
The proposed pay rises for council workers are long overdue after years of below-inflation increases. The council workers pay rise should help address recruitment and retention issues in key local authority roles.
However, funding the substantial pay increases poses a major challenge at a time of squeezed council budgets. Unless fully funded by central government, services and jobs in other areas could be put at risk. After a decade of pay restraint, a significant but affordable rise is a pragmatic solution.