NJC Pay Offer 2018-20
Member Consultation Briefing
UNISON North West
*NJC Pay Offer 2018-20
Recommendation To Members
Your Branch, your North West Regional Service Group and your NJC Committee recommend that you REJECT the employers pay offer
This briefing explains the offer and the reasons why the recommendation is to REJECT it in the current membership consultation *Note: If you have received this email and you are not employed under provision of NJC Pay bargaining protocols please discard this communication. If for any reason you are not sure please contact the Branch on 0161 308 2452.
- Branches are consulting members on whether they wish to Accept or Reject the current NJC Pay Offer, and you will soon be receiving ballot papers from the Branch. This ballot is NOT an industrial action ballot, it is sent to gauge the feelings of you the member. The question to be put to members is determined by the UNISON NJC Committee
- If you would like to arrange a workplace consultation please contact the Branch (being mindful of capacity and deadlines for the consultative ballot – the closing date for our ballot is the 8 March 2018)
- Non-members who join during the consultation period are able to vote
- The Branch will submit its collated ballot returns to the Regional Head of Local Government by 5pm on Friday 9thMarch
- The Region will forward the outcomes from all Branches to the Local Government Section at the UNISON Centre by 5pm on Tuesday13thMarch
- The UNISON NJC Committee will meet on Friday 16thMarch to receive and consider the outcome of the consultation and determine UNISON’s position
Trade Union Side Claim 2018-2019
The claim was submitted in May 2017 by the NJC Trade Union Side (UNISON, GMB and Unite) and asked for:
- A single year pay settlement
- The real Foundation Living Wage to be the lowest NJC pay value. This is currently £8.75 outside London
- A 5% increase on all pay points after the real Foundation Living Wage is applied
NJC PAY OFFER 2018 – 2020
The employers made their offer in December 2017. The key features are:
- A two-year ‘final’ offer covering the period 1 April 2018 to 31 March 2020
- Incorporates joint review of NJC pay spine
- Cumulative increase on current SCP 6 of 15.65% after two years (but see inflation)
- NB: at current values SCP 6 would be overtaken by the Statutory Living Wage on 1 April 2018, SCPs 7 to 11 overtaken on 1 April 2019 and SCP 12 overtaken by 2020
- Cumulative increase on SCP 20 and above of 4.04% after two years (but see inflation)
Why is there a review of the Pay Spine (1)?
- Agreed as part of 2016-18 NJC pay settlement
- Triggered by introduction of Statutory National Living Wage and use of real Foundation Living Wage
- Both have led to compression at lower end of the pay spine
- Pressure of future increases in statutory minimum pay levels
- NJC working group agreed review principles
- Employers included new pay spine as part of this pay offer
Why is there a review of the Pay Spine (2)?
- Create equal 2% gaps between SCP’s …..
- ….. though only up to new SCP 22 (current SCP 28)
- Aim of the NJC pay spine review is to minimise impact on pay structures and avoid the need for a full pay and grading review …..
- ….. but unions and employers will need to agree assimilation process to new pay spine, and each Branch will need to see how the new pay spine sits with current grade boundaries
The Offer In More Detail – Year 1
(with effect from 1 April 2018)
- Current SCP 6 – Increase from £7.78 to £8.50 = 9.19% (but see inflation)
- NB: SCP 6 would be overtaken by the Statutory Living Wage on 1 April 2018 at current value
- Current SCP 12 – From £8.36 to £8.90 = 6.51% (but see inflation)
- Current SCP 19 – From £9.72 to £10.08 = 3.73% (but see inflation)
- Current SCP 20 and above – 2% on all pay points (but see inflation)
- Annual RPI Inflation Forecast Year 1 (HM Treasury) = 3.4%
The Offer In More Detail – Year 2
(with effect from 1 April 2019)
- New pay spine with a bottom rate of £9 per hour; current SCPs 6 to 17 ‘paired up’ to form new SCPs 1 to 6; 2% equal steps between new SCPs 1 to 22 inclusive (with new SCPs 10, 13, 16, 18 and 21 created for which there are no equivalent current SCP rates)
- Increase at new SCP 1 (current SCPs 6 and 7) = 5.91%/5.27% (but see inflation)
- NB: SCPs 6 to 11 would be overtaken by the Statutory Living Wage by 1 April 2019 at current values
- Increase at new SCP 4 (current SCPs 12 and 13) = 7.3%/5.95% (but see inflation)
- Increase at new SCP 8 (current SCP 19) = 2.57% (but see inflation)
- Increase at new SCP 12 (current SCP 22) = 2.44% (but see inflation)
- Increase on new SCP 23 and above (current SCP 29 and above) = 2% (but see inflation)
- Annual RPI Inflation Forecast Year 2 (HM Treasury) = 3.1%
The Offer In More Detail – Cumulative Effect
(total from 1 April 2018 to 31 March 2020)
- New SCP 1 (current SCPs 6 and 7) = 15.65%/14.88% (but see inflation)
- New SCP 4 (current SCPs 12 and 13) = 14.29%/11.74% (but see inflation)
- NB: SCPs 6 to 12 would be overtaken by the Statutory Living Wage by 2020 at current values
- New SCP 8 (current SCP 19) = 6.40% (but see inflation)
- New SCP 12 (current SCP 22) = 4.49% (but see inflation)
- New SCP 23 and above (current SCP 29 and above) = 4.04% (but see inflation)
- Cumulative RPI inflation forecast (HM Treasury) = 6.61%
Key Pay Indicators And The Offer (1)
The Statutory National Living Wage – the minimum an employer has to pay in law
- Currently £7.50 per hour and will rise by 4.4% to £7.83 from April 2018 – that will be equivalent to the current pay rate for SCP 7
- A further 4.5% increase in 2019 would give £8.18 per hour – equivalent to the current pay rate for SCP 11
- And a further 4.5% increase from 2020 would give £8.55 per hour – equivalent to the current pay rate for SCP 13
- These increases to the Statutory National Living Wage show why much larger % increases are actually a necessity at the lower end of the pay scales – to cover what employers would have to pay as a minimum by law anyway and then to build some ‘headroom’ against future increases in statutory minimum pay at the bottom of the revised pay spine.
Key Pay Indicators And The Offer (2)
The Statutory National Living Wage (continued)
- Without a significant increase at the lower end of the pay spine current SCPs 6 to 12 would be redundant by April 2020 due to increases in the Statutory National Living Wage.
- Or put another way, without any pay rise at all members currently paid at SCPs 6 to 12 would have to move to current SCP 13 pay rate by April 2020 as the absolute minimum the employer could legally pay them.
- So the real value of this offer at the lower end of the pay scale can be judged by the increase it gives at new SCP 4 (current SCPs 12 and 13).
- Here the offer would be a cumulative 11.74% increase against the current pay rate for SCP 13 – a gain of about 13% in real terms over the two years after allowing for cumulative inflation
Key Pay Indicators And The Offer (3)
The Foundation Living Wage – set independently to reflect real living costs
- The Foundation Living Wage is currently £8.75 outside London and would rise to around £9.33 per hour by April 2020 if it matches inflation forecasts
- This is equivalent currently to the pay rate for SCP 14 and nearest to the pay rate for new SCP 3 (current SCPs 10 and 11) under Year 2 of the offer.
- So, for members in Living Wage employers …..
- ….. if the substantive grade of your job is between current SCPs 6 to 11 inclusive (new SCPs 1 to 3) but you get a Foundation Living Wage pay rate or local Living Wage ‘top-up’, then your pay will rise with increases to the Foundation Living Wage rate or local Living Wage but not as a result of this offer ….. because the Foundation Living Wage rate is equivalent to the pay rate of new SCP 3 (current SCPs 10 and 11) at the end of this offer
Key Pay Indicators And The Offer (4)
Inflation And Why It Matters For Pay
- Inflation tracks an increase in prices (based on “a basket of goods and service costs”) over a year. In simple terms, if something cost us £100 this time last year and inflation is 4% it is now costing us £104.
- Inflation is measured on a month-by-month basis, hence it goes up and down or stays the same, and the overall impact of inflation in any given 12 month period is the annual average over that 12 months.
- The two most commonly used inflation measures are RPI and CPI. RPI is widely accepted as being the more accurate measure of living costs for working people and for determining the link between inflation and wages to show whether earnings , in real terms, are rising, falling, or staying the same.
Key Pay Indicators And The Offer (5)
Inflation And Why It Matters For Pay (continued)
- If your wage rise is more than inflation your earnings have risen in real terms. If your wage rise is the same as inflation your earnings have stayed the same in real terms. If your wage rise is lower than inflation your earnings have fallen in real terms.
- RPI is currently at 3.9% (CPI is at 3.1%)
- This pay offer covers the period 1stApril 2018 to 31st March 2020.
- The most recent HM Treasury Average of Independent Forecasts for this period shows that cumulative RPI inflation will be 6.61%.
- The cumulative effect of the two-year pay offer at current SCP 19 would be a pay rise of 6.40%, at current SCP 22 it would be a rise of 4.49% and at current SCP 29 and above it would be a rise of 4.04%.
Key Pay Indicators And The Offer (6)
Inflation And Why It Matters For Pay (continued)
- This means that every NJC worker at current SCP 19 or above would see their earnings fall in real terms under this offer as inflation would be greater than the rise.
- For a significant majority (at least two-thirds) this offer would be a further cut in pay in real terms of 2.12% to 2.57% by March 2020
- It’s this relationship between inflation and low pay rises (and pay freezes) that has seen a real term cut in average NJC pay values of 21% since 2010. In other words, if your pay bought you £500 of goods and services a week in 2010 it would only buy you £395 of goods and services a week now. Which would fall again to around £382 of goods and services a week for a majority of members as a result of this offer.
Key Pay Indicators And The Offer (7)
Inflation And Why It Matters For Pay (continued)
- For the ultra-conservative or more cynical out there, the HM Treasury Average of Independent Forecasts puts CPI inflation at a cumulative 4.86% for the period of this pay offer (Bank of England forecast is 5%).
- So even under CPI every worker at current SCP 22 or above would still see a real term cut in pay under this offer.
- For the majority of NJC workers this offer would mean 10 consecutive years in which the real value of their pay had fallen.
- And from that it follows that the value of a worker’s future pension will also have fallen significantly.
The Branch & North West Regional View On The Offer
Both the Branch & North West Regional Local Government Service Group believes the current NJC pay offer should be REJECTED as it would mean a further two years of real term pay cuts for a majority of NJC members, given inflation forecasts for the period covered by the offer. Aside from some bottom loading in this and previous NJC pay settlements this offer would represent over 10 consecutive years of NJC pay awards being lower than inflation. We should campaign thoroughly to seek to secure a rejection of the offer in membership consultations.
NJC Committee View On The Offer
- The UNISON NJC Committee is recommending that members REJECT the two-year 2018/20 pay offer.
- The Committee believes that the offer falls short of our claim.
- However, the Committee is clear that the offer is the best achievable by negotiation and that nothing short of substantial, all-out strike action could have the potential to improve the offer.
Other Unions’ View On The Offer
Unite’s National Sector Committee voted unanimously to REJECT the offer:-
“Since successive Conservative government’s introduced a series of pay freezes and pay restraint policies in 2010 the pay of local government workers has fallen by 21 per cent in real terms. The current pay offer will result in a further real terms pay cut for most of Unite’s local government members. Our members simply do not believe that the offer will result in enough members receiving a pay increase which is at least in line with inflation”.
GMB are consulting without making a specific recommendation on the offer.
“GMB position – It was agreed to present the facts to the members; explain the new pay offer and pay spine; a full postal, secret ballot for everyone would follow.”
- For all workers on current SCP 19 and above this offer would be a real term pay cut of up to 2.57% by 31 March 2020 due to inflation being higher than the award. That’s at least two-thirds of NJC workers for whom this offer would be another pay cut.
- Current SCPs 6 to 18 would see bigger % increases. Some of this is to keep NJC pay above the Statutory National Living Wage – which is the minimum employers have to pay anyway by law. Some of it is to create ‘headroom’ at the bottom end and equal differentials between SCPs as part of the Pay Spine Review.
- The largest real term increases of note are worth about 5.13% in real terms over the full two years after allowing for inflation over that time.
- For members in Living Wage employers who get a ‘real’ Foundation Living Wage pay rate or local Living Wage ‘top-up’; your pay will rise with increases to the Foundation Living Wage or local Living Wage but not as a result of this offer ….. because the Foundation Living Wage rate will be equivalent to the pay rate of new SCP 3 (current SCPs 10 and 11) at the end of this offer
- It is imperative that ALL members use their vote so that our North West representatives to the UNISON NJC Committee can make informed decisions from the broadest base possible.
- Your Branch, your Regional Service Group and your NJC Committee recommend that you REJECT this pay offer.