01 December 2006
Local government faces fresh strike action in the New Year after the government announced pension scheme reforms deemed unacceptable by trade unions, Public Finance has been told.
The renewed threat follows local government minister Phil Woolas' announcement in the Commons of the principles of a new Local Government Pension Scheme.
Controversially for the unions, the new scheme would initially increase average employee contribution rates from 5.8% of salary to 6.3% and allow them to be raised further still if required.
Unison head of local government Heather Wakefield told PF that unions were also angry that no further concessions had been offered to existing scheme members to protect them from a recent increase in the earliest retirement age from 60 to 65.
In England and Wales, only those members qualifying by 2016 would be able to retire under the old rules, but in Scotland and Northern Ireland members had until at least 2020. 'There's a very strong likelihood we will be launching an industrial action ballot,' Wakefield told PF.
As PF went to press, local government unions representing more than 1 million workers were meeting to discuss their response. An announcement was anticipated early next week with ballots for action taking place in January and strikes due in February – coinciding with the close of a 12-week consultation on the new scheme.
Unions staged a one-day strike in March this year and two others were called off during the two-year life of the dispute, after talks suggested concessions could be made.
Unions were also angered that Woolas's November 23 announcement interrupted 'fruitful' talks between the unions and local government employers on a new, affordable and equitable LGPS.
But a senior source at the Local Government Employers put a less positive spin on those talks. The two sides continued to disagree over proposals for employees to bear the risk of future increases in longevity, and employers did not believe an average employee contribution rate of 6.3% was 'too high'. 'It's for the minister to make a decision, which he has now done,' the source said.
Whilst the employers favour the main proposals – particularly the drop in their contribution rates and the principle of risk-sharing – they believe Woolas's proposal for a sliding scale of employee contribution rates based on salaries is unworkable.
PFdec2006
