NJC Pay 2014 – Rebuttal Letter for Local Employer Communications

Dear UNISON Member

NJC Pay Dispute 2014

We understand that the Chief Executive/Leader will be writing/has written to all employees regarding the current national dispute over NJC pay and the strike action planned for 10 July. The Chief Executive/Leader is perfectly entitled to communicate with employees, though such correspondence is clearly designed to dissuade local staff from participating in lawful national industrial action called by trade unions including UNISON.

As it happens all local authorities have been encouraged to do this by the Local Government Association – the body that has made the derisory 1% pay offer, that has overseen a 20% reduction in the real value of your pay since just 2010, that has refused further talks on a fair pay settlement for local government workers, and that published a guide for local authorities on how to rip up terms and conditions.

Whilst it may not be particularly surprising that the Chief Executive/Leader should seek to intervene locally in what is a national dispute, members need to be aware of the real context behind the statements propagated by the LGA:

The NJC employers have offered just 1% to the 90+% of the workforce on scp 11 and above. Those on scp 5 – 10 are offered slightly more than 1% but this is just to keep their pay levels at the margin of the legal requirement to pay the National Minimum Wage.

Claims that the current offer is “fair” and “at the limit of what we can afford” represent crocodile tears at best.

  • Is it really “fair” that the true value of NJC pay has now fallen by 20% just since 2010?
  •  Is it really “fair” that NJC pay rises have been below inflation in eight of the past 17 years?
  •  Is it really “fair” that one third of all NJC workers earn less than the Living Wage rate and another third are paid less than even this Government’s definition of low pay?
  •  Is a 1% pay rise really all the national employers can afford when, since 2010, councils have saved a quarter of their staffing costs per employee – and at the same time used these savings to boost total local authority reserves which have risen £2.6 billion nationally to £19 billion?

The truth is that raising pay by an extra £1.20 an hour would get the economy working again as well as set the Living Wage as a minimum pay rate. For every £1 local government workers earn, 50p is spent in the local economy, helping to maintain and create jobs and sustain local businesses. Additionally, the extra taxes and national insurance flowing to the Treasury from increased pay, together with the consequential reduction of in-work benefits and tax credits would fund over half of our pay claim.

Employers tend to pull at the heart strings as well at such times, reminding us of our duty to the residents and communities we serve. UNISON does not believe we need reminding. We are also those residents and those communities – 80% of all local authority employees live within the area or an immediate neighbouring authority. Over a quarter of local council workers are doing additional unpaid work to an average of more than 7 hours each and every week. Add that ‘free’ day we are giving our employers each week to the 20% cut in the real value of our pay and in effect we are now working 5 days a week to get paid what we earned in just 3 days a week back in 2010.

The third part of the dissuasion approach is to highlight the financial implications of taking strike action, particularly in relation to your pension.

Well, we need to start by looking at the financial implications and pension impact of how NJC workers have fared under the pay freeze and below inflation awards. Remember, continually falling pay of the kind suffered by local government workers means a loss of pension for every day of the rest of your life. And the facts are quite staggering. This table illustrates current pay salary, loss in salary by pay not matching inflation since 2008 (the last time NJC pay did so) including the 1% offer, and the loss that produces on pension for different service length examples if you were to retire in 2015.

 

SCP and current salary  

Loss in your pay since 2008

Years in LGPS

Pension lost EVERY year in retirement

Loss in lump sum

SCP 15 : £16,215

£2,579

10

£407.30

£290.18

SCP 25 : £21,734

£3,459

10

£546.13

£389.09

SCP 30 : £25,727

£4,093

20

£1,158.05

£1,995.52

SCP 45 : £38,422

£6,113

30

£2,493.66

£5,272.70

By using the approach in the detailed example below you can work out your own pay loss and pension impact.

Example: You currently earn a salary of £16,215 at spinal column point 15.  You plan to retire in March 2015 with 10 years’ service in the Local Government Pension Scheme (LGPS) since 2005

How much pay have you lost per year?

  • Your current pay is £16,215 per year. If you accept the LGA’s offer your pay will be £16,377 per year
  • If your pay had just kept up with the cost of living since 2008 – the last time an NJC pay award was at or above inflation – it would be £18,956 per year.

So even with the 1% offer that’s a difference of £2,579 per year in lost pay!

How much pension will you lose per year?

By the time you retire in 2015, you will have worked for 10 years since 2005. During that time, there have been three different benefit structures in the LGPS. To work out your pension, you need to do three separate calculations. You would have:

  • 3 years service (2005 to 2008) in the pre-2008 Final Salary related pension scheme at 1/80th accrual rate
  • 6 years service (2008 to 2014) in the post-2008 Final Salary related pension scheme at 1/60th accrual rate
  • 1 years service (2014 to 2015) in the new CARE pension scheme at 1/49th accrual rate

So if the loss in pay is £2,579 per year the pension impact works out at:

£2,579 x (3/80th)    +    £2,579 x (6/60th)       +    £2579 x (1 x 1/49th)   = £407.30 lost pension every year!

How much pension lump sum will you lose?

If you worked before 2008, you are also due a lump sum on retirement for those years you worked in the pre-2008 pension scheme. Lump Sum accrued at 3/80th per year so in this example you would have 3 years service from 2005 to 2008 at 3/80th each year, making 9/80th in total which at a pay loss of £2,579 equates to £290.18 lost in lump sum value.

However you look at it, the impact of falling pay on your present pay and your future pension has already been dramatic, and the immediate financial impact of taking strike action is put in a very different perspective.

And finally, we have the myth that somehow our jobs and services will be safer if only we keep agreeing to see our wages cut and our terms and conditions lost. Apart from this being a different way of saying that we are expected to subsidise our own employment it is a complete falsehood. Over half a million council jobs have gone since 2010. Services are being cut and in some cases stopped. Low pay and worsening conditions actually makes it easier and cheaper to get rid of posts or to privatise services.

Strike action is always a last resort, but the employers are refusing to re-open negotiations and remain steadfast in peddling the disingenuous line that 1% is a “fair offer”. It is not a fair offer by any reasonable stretch of definition. And it’s not going to get any better unless we do something about it.

It is imperative that we join together to stop the rot in local government pay. Unless we take a firm stand this year we will find ourselves with further real pay cuts and increasingly lost pension value for years to come.

This is why UNISON says Enough Is Enough.

Share and Enjoy:
  • Print
  • Digg
  • StumbleUpon
  • del.icio.us
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks
This entry was posted in Uncategorized. Bookmark the permalink. Comments are closed, but you can leave a trackback: Trackback URL.
  • Join UNISON Online Today
  • update
  • RSS UNISON news