Magazine article Public Finance

Pay Deals near as Town Halls and Trusts Breach 2% Cap

Magazine article Public Finance

Pay Deals near as Town Halls and Trusts Breach 2% Cap

Article excerpt

Local government and health unions have edged closer to pay deals that would breach the Treasury's 2% limit - but this week's illegal strikes by prison officers have highlighted the public sector's continued hostility towards Gordon Brown s wage restraint.

Public Finance understands that the leaders of the three local government trade unions - Unison, the GMB and T&G are likely to endorse an improved pay offer from employers. If accepted by town hall staff following a ballot, the unions' approval could bring an end to the sector's longrunning pay dispute, which began in February.

Local Government Employers, which represents councils, broke the deadlock by agreeing to breach the 2% cap on average annual pay rises with a revised deal submitted on August 24.

The offer would increase pay for the lowest paid by 3.4% and by an average 2.48% for all staff. Privately, the LGE had budgeted for a 2.5% maximum rise and has warned union leaders that they cannot offer a further increase without slashing services.

An LGE spokesman said that the improved offer was 'fair and affordable' and reflected 'the contribution our workforce has made to producing the most substantial efficiency savings in the public sector'. Town halls have also promised a comprehensive' pay review.

Sources at Unison and the T&G said it would be difficult to oppose the LGEs proposal but reiterated that union leaders would consider the offer at a National Joint Council meeting on September 4.

One senior unionist told PF: 'Given that the new offer exceeds the Treasury's guidelines and focuses extra resources on the lowest paid, it could be difficult to ignore. But we must be conscious of our members' needs and it must be remembered that the average rise is still comfortably below inflation. There are still issues to be resolved.'

Unison officials confirmed that health sector members also want to resolve their pay dispute. Health staff have been balloted over an improved offer that would deliver average rises of 2.1% through a flat-rate increase of £400.

Treasury officials denied that the two new offers would inevitably lead Chancellor Alistair Darling to revise the 2% limit introduced by Brown to reflect the government's inflation target. …

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