UNISON Active ANALYSIS - NJC Pay Freeze: Issues and Options‏

With the ‘big freeze’ melting and grit no longer like gold-dust thoughts start wandering towards spring. But as local government members get back to normal working after battling the elements to keep services running they are faced with another big freeze. A pay freeze. And this one could well last several years.

On 20 January – as UNISON nationally was considering the General Secretary election - the Local Government Employers (LGE) covering England, Wales and Northern Ireland told the NJC unions they would not be making a pay offer for 2010. This affects 1.4 million workers of which more than 750,000 are UNISON members. On the same day they wrote to local authorities saying they will not be offering a rise to other bargaining groups covering Chief Executives, Chief Officers and Craft agreements even though no claims have yet been submitted.
http://www.unison.org.uk/asppresspack/pressrelease_view.asp?id=1705

In a model letter to be passed to employees they explain that councils simply cannot afford a pay increase because the 2010/11 local government settlement was dependent on councils achieving savings, councils are seeing reduced income from charging services and interest on investments due to the recession, reserves – already at ‘sensible’ levels - have been hit with contingency spending (yes, that’s extra gritting to you and me!), and it would require a rise in Council Tax of a level that would be capped. The press release accompanying the announcement encapsulated these in the spin-dryer of “to protect vital front-line services and help minimise the need for job cuts”.

The local government grant settlement for 2010/11, announced only on 26 November, represents an overall increase of 3.4% across England on 2009/10 grant. Even with the recent inflation jump this is a real term increase. UNISON knows, from Freedom of Information Act requests, that council reserves have grown significantly in recent years – largely on the back of efficiency savings delivered by our members.

The majority of cuts and redundancies increasingly seen in local government derive, at least presently, from political decisions by Councils to keep Council Tax rises down which is, in effect, a conscious policy by councils to cap their own funding. The Tories “10 Point Plan” for councils explicitly calls for Council Tax freezes to be ‘funded’ by cuts in ‘non essential services’.

Quantifiable research last year by APSE/CLES/Inlogov shows that around 64p of every £1 spent by councils on works, goods, services and supplies is recycled back into the local economy and over 50% of council worker earnings are spent in the local economy. Council spending – and that of its employees from earnings – has a positive impact on local economic wellbeing, protects against a recession and stimulates growth in recovery through the “multiplier effect”. So public sector budget cuts and job losses have a disproportionately higher impact on local economies and local communities and a blanket pay freeze feeds into this equation.

The Local Government Association is Tory controlled and Tory dominated. Yet it’s understood that all of the employer NJC regional bodies and the political group leaders supported the decision. Of course we cannot ignore that this is a year of both significant local elections and the general election. It is not presumptuous to assume this is a major factor at play, given there is a Whitehall and media ‘conspiracy of consensus’ that public spending cutbacks are an accepted wisdom and the muddy red/blue/green-yellow water is “where we will cut – not if we will cut”.

All of which raises the question (in 2010 at least) of whether this pay freeze is driven by genuine budgetary need and economic imperative, or is it motivated by political consciousness to keep Council Tax rises low/zero for local electioneering purposes, with this feeding into the national image machine of being seen as ‘rigorous’ on public spending for the general election?

Whatever the answer we are, to rub a well worn phrasebook, where we are. And that is a zero pay offer, or more accurately no pay offer, for the NJC. This may not be a huge surprise but it is probably a surprise nonetheless. Many were anticipating an offer of around 0.5%, as last year, and an honest assessment would conclude that our members would accept this.

No offer is a very different dynamic to the last two years where we have seen a low offer that does not meet our claim (which is not necessarily the same as meeting realistic aspiration) and a low offer that would be imposed on the settlement date if it was not accepted (which resulted in the somewhat detached, insular and Pythonesque semantic exchange of whether an offer remains an offer if it is rejected, and therefore whether an imposition has actually taken place or is de-facto no longer required – “Yes it is. No it isn’t. I am arguing on my own time” anybody?).

And whilst the public arguments put forward by the LGE and the counter points we may offer, like those above, can be isolated to NJC pay in 2010 we know this is not how many activists and probably all our ‘ordinary’ members are looking at things.

Major restructures, outsourcing, shared service arrangements, service cutbacks and redundancies ARE happening. The agenda set by primary legislation for greater integration of delivery across public service providers, involving the voluntary and private sectors, is premised as much, if not more, on savings as on real improvement.

Directed through a complex and sometimes competing patchwork of Local Strategic Partnerships, Multi-Area Agreements, localism, limited devolution to Statutory City Regions, duty of economic assessment, Comprehensive Area Assessment and the latest strap line of “Place” (pause for breath), amongst others, it is impacting on Branches and members in a way we are currently not well organised to respond to effectively. Often it’s across several public bodies within a locality, increasingly across several locality boundaries and even developing at regional and sub-regional levels.

The traditional consultative and negotiating machinery of local Branch-to-local Council may not contain the whole decision process when authorities are making major service design decisions in collaboration with other authorities and bodies. Equally, many Regions do not have functioning ‘provincial’ machinery anymore and those that do are not necessarily geared up to ‘bargaining and negotiating’ in this new environment.

It is right that as a union engaged in public policy debates that we make our points forcibly about the bulwark role of the public sector during harsh economic times; both as a provider of services facing increasing demand, and as a stabilising factor in terms of employment and economic circulation.

It is also right that we press our view – shared by all the world’s most learned (independent) economists – that public spending is non-inflationary and austerity measures in a recession has led historically into a depression. But members are acutely aware, from family and friends as well as the media, that the recession is real in a personal and human sense, that people are losing their jobs, that businesses are closing, that prices are rising.

Members know the perceived sense the public sector is somehow immune from this is not popular, that the political and establishment mood is a consensus, genuine or expedient, that closing the national debt by locking the public purse is the only way to go, and that whatever government is returned in May or June is going to implement cuts that are much deeper than scratches. And when it comes to the public funding queue members know that local councils are already tied to the post just waiting to see which firing squad turns up. Nobody is under any illusion that the next 3-year settlement is going to be anything other than severe.

Bringing this back to the workplace there is a direct impact on our members, both real and ‘psychological’ – that the solidity of their shop floor is shifting towards virtuality or quicksand and that their union may not have the influence at local level that it once had, because their working environment is no longer as locally determined and locally controlled beneath Cabinet/Executive level in terms of service design and procurement decisions; and that above that a financial wrecking ball is in swing.

Members are well aware that local and general elections are a factor this year. That councillors, MP’s, prospective candidates, commentators and the rest of the caravan will be under close scrutiny of every word, action, quote and blog. Very few are likely to openly support a pay rise for council workers (not ignoring the substantial number of non-council NJC members) when the simplistic argument thrown back will always be about the cost in Council Tax. A difficult media strategy is made a whole lot harder simply because we are stooped in the election pipeline.

Beyond all this ordinary members are sceptical that we can deliver effective industrial action over pay on a truly national scale. That, rightly or wrongly, there is a North-South divide when it comes to strike action on national issues. The genuine bitterness that many, many, members felt about the call to strike action in 2008 is still reported by Branches.

And looming large, perhaps a genuinely unifying issue, is the sure and certain knowledge that the LGPS is going to come under concerted attack.

Whilst some of this may be straying into areas of UNISON structures, wider public policy and even fag-packet philosophy, it may explain the fact, as we know, the number one priority for UNISON members at present remains job security above all else.

So, does being where we are mean as a national union we just lump it and this is where we stay? The answer has to be a resounding NO. To simply do nothing would be a tacit admission by UNISON that we are prepared to meekly accept a pay freeze that could last 5 years or more. Even applying a touch of rouge and saying this is a “goodwill concession” by council workers would not hide the fact that the employers, and our members, would read this as a signal we have no strategy.

There are some obvious things we can do such as lobbying local councils to try and break ranks with their NJC party line, lobbying the LGE/employer side of the NJC itself, publicise what zero pay means in the broader context of the assault on public services and particularly council funding that is happening and will increase in ferocity after the election. Many are tried and tested, maybe even tired and tested? And it may be little more than symbolic and ultimately prove fruitless.

But that is no reason to not include them in an initial response strategy. We could also look at what broader concessions may be available that members may see as an acceptable ‘trade’ if, at the final reckoning, there is still no pay offer. One such could be completion (has it actually started?) of the protocol on avoiding redundancies that was part of the last NJC settlement.

Whilst nobody would expect the employers to sign up to a collective national agreement on a redundancy moratorium (or that local councils may then, in fact, not use such an agreement as one more reason to leave the NJC) a genuinely constructive protocol about minimising redundancies, particularly one that set a collective contractual de-minimis of above statutory calculation for the last resort, would be popular (a sign of the times) with Branches and members.

There will doubtless be calls for immediate strike action - and the conclusion that we have to consider industrial action at some point as the only real possibility to try and force a change of position may be unavoidable. But in that event we could look at a more rounded approach to action (see http://unisonactive.blogspot.com/2010/01/irish-unions-gear-up-to-fight-austerity.html for one such approach).

There may equally be calls to make no particular response, to stand quietly in the corridor knocking on the door of the LGE, asking to be let in, to go over the same arguments that provided background detail to the claim and which the employers have already disregarded, if not dismissed, as of last Wednesday (irrespective that they were cogent, researched and reasonable). Of course it is essential that we do knock on the door and that we keep knocking.

We all appreciate the need to allow time and space for negotiations to proceed but at what point do we take a view that nobody is answering and that negotiations are not even starting never mind proceeding? There may be calls to move to immediate arbitration but given the employers’ view in 2008 was that the Green Book interpretation taken by the unions was ‘questionable’ one wonders how they would respond this year. And it could be argued that if we are going to seek arbitration without trying to reach, or force, a negotiated settlement then we are potentially furthering an argument for a pay review body rather than a collective bargaining approach?

There can be no doubt that we are in a stark and difficult position, and that the employers are doubtless well aware of this. And the key consideration for UNISON is probably the question of when to begin properly consulting the members (as opposed to putting out newsletters, setting up bulletin boards and making media statements).

Across the NJC countries there has been a loud and consistent message during and after the pay campaigns of the last two years – that the members wanted to be consulted much earlier than they were, that they do not want protracted periods of seeming inactivity, that when the room for manoeuvre is finite there is no reason why they should not be consulted on the basis of a likely range of offer and that any call to ballot/action has to be based on rigorous analysis of a consultation/ballot return that gives a solid and confident indication of widespread support.

Many of these points were taken on board as part of the NJC’s campaign review last year. One perennial problem with making the judgement call is a close return in a low turnout so it is imperative that Branches start gearing up now to involve members and encourage them to respond to consultation when it happens.

There seems little merit in moving to an immediate strike ballot that on the basis of current, if largely anecdotal, information is likely to bomb. UNISON can ill afford a situation where we spend a considerable amount of money (around a quarter of a million) on a ballot we have no confident intelligence will succeed. The two stage process has been criticised in some quarters for building in unnecessary delay but it is a prudent track to travel. Equally there seems little merit in adopting the same slowly, slowly, slowly, slowly, corridor sitting approach of the last two years - when the starting point now is that we don’t even have a chair to sit on.

It may well be worth moving to a consultative ballot of the members in the next couple of weeks if the employers have still refused to make an offer, even if they have agreed a date for a tentative meeting and especially if that date is another month away.

Without pre-empting a debate on what any consultative question – or indeed multiple questions - may be, there seems little inherent risk in this approach from the position we are in now. If the members decide in a consultative ballot they are willing to move to a formal ballot for industrial action then, at the very least, it provides a stronger hand to continue knocking at the door for a bit more.

And if a consultative ballot shows there is no support to move to a formal industrial action ballot then what is actually lost from now? It would be the members’ call. There is not an offer on the table that may be withdrawn or imposed, there is not even a table at present and no commitment to joining one in the immediate term (and lest we forget, the claim was submitted several months ago). That is the different starting point dynamic this year of having no offer compared to a low offer.

UNISON’s NJC Committee meets on Wednesday 3 February followed by a meeting of the Joint Trade Union Side with GMB and Unite. They have a difficult debate ahead and it is to be hoped the UNISON Regional NJC reps will have been able to hold Regional Branch meetings or take good soundings from Branches to inform their considerations. Too often in recent years it appears as if key decisions have been made in isolation or disconnect from the Regional and Branch constituencies. Difficult situations require strong analysis and a fudged “wait and see approach” is not going to help us here and could lead to discontent.

We are where we are. And perhaps, after the last couple of years, Branches and members may feel that where we are is a place requiring very early consultation on what we are prepared to do about it.