31 August 2007
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 long-running 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 LGE's 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.
A spokesman told PF: 'Our aim is to limit total public sector rises at 2%, not every deal. It is up to local government employers to find the money to cover the sector's improved offer – we merely provide guidelines.
'The health sector offer would see staff in England receive 1.99% this year. The overall average rises above 2% when you factor in the settlements offered in Scotland and elsewhere, which we do not influence.'
Opposition MPs claimed that Brown had endorsed offers above 2% to placate trade unions in advance of the Labour Party's annual conference next month. But Brown is still likely to come under fire from dissident unions in Bournemouth.
Members of the Prison Officers' Association surprisingly walked out on August 29, the first national strike by the POA in 68 years. Members are upset that their 2.5% pay deal has been staged, reducing its real value to 1.9%.
Brian Caton, POA general secretary, said: 'It is unforgivable that a Labour government should treat public workers with such disdain.'
Incensed by the impromptu walkouts, which led to inmate lockdowns across all 129 prisons in England and Wales, Justice Secretary Jack Straw immediately secured a High Court injunction that halted the strikes. The Ministry of Justice successfully argued that the walkouts breached a legally enforceable agreement dating back to 1993.
Straw said the strike was 'unlawful' and added that the industrial action 'came without warning'. Talks between the MoJ and POA had been scheduled for next month.
Meanwhile, civil servants remain on a collision course with Brown over below-inflation deals.
The Public and Commercial Services union said it could stage further walkouts across Whitehall departments. The union has consulted its members over their appetite for further strikes following two national disputes this year.
PCS members at museums in Liverpool claimed that their pay offer would provide increases of just 90 pence per week.
Meanwhile, the PCS is considering an improved pay offer at the Department for Work and Pensions, which would see low-paid Jobcentre Plus staff receive average rises of 3% without the department breaching the Treasury cap.
PFaug2007
