Council backs pay freeze as ‘least negative’ for staff and economy

COUNCILLORS were given a stark choice last week: implement a pay freeze on your 5,000 non-teaching staff, regardless of their previously agreed terms and conditions, or consider “other options which are likely to include signficant job losses and/or pay reductions”.

And they gave a unanimous thumbs-up to the former option after considering a candid and ultimately persuasive report from two of their senior officials.

Scottish Borders Council has begun discussions with trade unions over placing a moratorium on all incremental wage rises over the next three years in a bid to save over £4million.

In a quid pro quo arrangement, the local authority will strive to give an assurance it will make no compulsory redundancies over the same period during which the current policy on voluntary severance, in which over 600 councils staff recently expressed an interest, will remain open.

And a total of 626 low-paid, mainly female staff, earning as little as £6.41 per hour, will be elevated onto the so-called Scottish Borders Living Wage of £7.15.

One of the trade unions involved, Unite, has already indicated it will ballot its 800 plus members on the proposals next month.

The options were outlined at last Thursday’s full council meeting in a no-holds barred report compiled by two council officers: Paul McMenamin, described as a business partner (finance), and Ian Angus, a systems development officer in personnel.

They claimed the SB Living Wage specifically addressed an issue which unions in Scotland had been seeking to resolve nationally: a view endorsed by Eck Barclay, Unite’s senior shop steward at SBC, who believes the minimum wage element, combined with the no-sackings assurance, will find favour with his members.

Around 85 per cent of the 626 who will quality for the minimum wage are female and their pay hike will result in the maximum ratio between the lowest wage rate at SBC and the highest falling below 1:10 which, the authors claimed, was in line with best practice.

They revealed that this was not currently the case with top-earner and chief executive David Hume on £65.51 per hour, assuming a 35-hour week, to produce a ratio of 1:10.21 against the £6.41 earners.

The £7.15 wage for the lowest paid would reduce that ratio to 1:9.16. Futher ratio reductions would be achieved against directors, currently paid a calculated £54.67 an hour, and heads of service on an hourly pay rate of £38.63.

Underpinning the report along with a frank assessment of a fragile Borders economy in which the council has a crucial role, was a call for a commitment for elected members to implement the new measures while still fulfilling their equal pay responsibilities and ensuring lower paid staff are, as far as possible, “protected and not unfairly disadvantaged”.

And the report stressed: “What must be highlighted is that the proposals represent as positive a move as can be made by the council”.

The new arrangement is an add-on to the public sector freeze on inflationary or cost of living pay rises already negotiated by the Convention of Scottish Local Authorities (CoSLA) with the support of the Scottish Government for 2011/12 and 2012/13.

The council wants to effectively suspend its contractual obligations to pay incremental increases to employees who would automatically move up the pay-scales.

If agreement is reached with the unions, this freeze will affect all staff on over £21,000 a year from April 1.

Staff on lower incomes will be entitled to incremental progression in 2011/12 but, like their higher-paid colleagues, they will face a total freeze in the following two years.

Even with the new minimum wage, the upshot will be a saving to SBC of £4.36million over the next three years: an indication of the huge employee costs borne by the council.

Indeed, in the next financial year, £149million will be spent on the wages of staff, including teachers: about 60 per cent of SBC’s total revenue budget.

In addition the council spent one-third of its £45million supply budget in 2009/10 on 2,300 separate suppliers based within the Borders.

The report confirmed SBC’s role as the region’s biggest employer with a headcount of 5,813, excluding 1,301 employed on a casual/relief basis. NHS Borders has a workforce of 4,316.