Written Answers. - Public Sector Pay.
I referred earlier to the need for a new approach to pay determination. An aspect of this matter which must be improved immediately is that of special increases in the public sector. In addition to pay provisions totalling £1,780 million in the Volume of Estimates, the Budget of January last provided £80 million to cover the cost of any additional improvements in pay and pensions arising in 1981. This provision has already been exceeded and the latest estimates suggest that, if current trends continue unchecked, the cost of public sector pay and pensions could rise by more than 25 per cent this year. This is unacceptable, both because it would add to the budgetary imbalance and because it would represent a serious inequality at a time when the majority of employees in private sector employments are receiving only the basic terms of the current pay agreement, and some may not even be receiving these.
Despite the state of the public finances, the Government are prepared to honour special increases sanctioned to date as well as firm offers or formal commitments which have been made before today, and would be anxious to accept, if at all possible, findings in cases currently before the Labour Court, or before an arbitration board or a review body. However it is obvious that this is the limit.
Accordingly, in the case of all other claims, the Government will request public sector employers formally to invoke Clause 6 of the pay terms of the National Understanding. They will seek immediate negotiations with the public sector unions with a view to agreeing an alternative arrangement which will take account of the community's inability to find the resources to meet further special increases without risk to jobs and the viability of the economy. My colleague, the Minister for the Public Service, will also invite the public sector unions to discuss the general question to the present methods of determining public sector pay and, in particular, whether the present arrangements for Conciliation and Arbitration should be modified or supplemented.
Information on claims for special increases in pay or for improvements in conditions.
1 Name of organisation; 2 Approximate number of employees; 3 Approximate current, annual wage bill; 4 Details of claim and date of receipt; 5 Unions or staff associations involved; 6 Grades of staff concerned and number of staff concerned; 7 Estimated cost of the claim; 8 Present state of negotiations on the claim.
7 August 1981
Dear Manager
1. I attach an extract from the Minister for Finance's Budget statement of 21 July 1981 dealing with public sector pay. I would ask you to ensure that Government policy on public sector pay as stated in this extract is complied with in relation to the local authorities for which you are the manager.
2. In order to ensure equality of treatment for all cases it is essential that all public sector employers pursue a co-ordinated and consistent pay policy. It would be most unfortunate if the policy were implemented in such a way as to allow a group of workers in one area to benefit from an increase while a similar group in another area with an equally strong case were prevented from doing so.
3. The following paragraphs indicate how the Budget statement is to be implemented and I would be grateful if you would ensure that they are complied with in your local authorities.
4. Where my Department gave approval for pay increases or improvements in conditions before the Budget statement on 21 July 1981 such approvals may be honoured. If in any case such increases or improvements were not actually offered before the Budget statement, it should be made clear to the staff interests involved that the Department's sanction had, in fact, been given prior to the Budget.
5. It should be noted that it is the Government's intention that a restrictive view should be taken of what constitutes a firm offer or formal commitment, as referred to in the Minister for Finance's statement. In this regard, it should be noted that existing links and relationships do not in themselves constitute a formal commitment and should not be so construed.
6. The expression "cases currently before the Labour Court" covers only those claims which were referred to the Labour Court for a recommendation before the Budget statement. It does not cover claims at the conciliation stage. In accordance with the established practice, all such Labour Court or Rights Commissioners' recommendations should be referred to my Department for consideration before any offers or commitments are made by a local authority in respect thereof.
7. It will be noted from the Minister for Finance's statement that in all cases other than the exceptions mentioned above, it is the Government's intention that public sector employers should formally invoke Clause 6 of the pay terms of the National Understanding.
As you will appreciate, it is essential that the Government's decision in this respect should be fully adhered to in local authorities. There is, as you know, a standing requirement that no offers or commitments should be made by local authorities in respect of claims without first consulting my Department. In the new situation arising from the Minister for Finance's Statement it is vital that consultation with the Department on any claims received by the authorities under your management should take place as quickly as possible after the claims are receivedand in any event before local discussions on them begin. It is especially important that arrangements be put into operation immediately in each local authority to ensure full compliance with this requirement.
8. To ensure that Government pay policy is applied consistently throughout the public sector and to enable the situation in this respect to be monitored, I would be glad if you would send me as soon as possible details of claims, if any, extant in your local authority on 21 July, 1981 in the form set out in the Appendix to this letter. If further claims are received after 21 July similar details should be supplied.
9. I feel I cannot stress too strongly the need for Government policy on pay to be observed consistently throughout the public sector and I feel sure that I can rely on you to ensure that Government policy as outlined in the Budget statement and in this letter is complied with. If any doubts arise about the status of a particular claim, offer or commitment or about other aspects of the new pay policy the matter should be referred, in writing, to my Department for consideration.
10. I am also writing to the Local Government Staff Negotiations Board about the implementation of the Government's decision in so far as the Board is concerned.
Yours Sincerely,
Peter Barry.
Minister for the Environment.
To each City and County Manager.
Extract from the Budget Speech of the Minister for Finance
Public Sector Pay
I referred earlier to the need for a new approach to pay determination. An aspect of this matter which must be improved immediately is that of special increases in the public sector. In addition to pay provisions totalling £1,780 million in the Volume of Estimates, the Budget of January last provided £80 million to cover the cost of any additional improvements in pay and pensions arising in 1981. This provision has already been exceeded and the latest estimates suggest that, if current trends continue unchecked, the cost of public sector pay and pensions could rise by more than 25 per cent this year. This is unacceptable, both because it would add to the budgetary imbalance and because it would represent a serious inequity at a time when the majority of employees in private sector employments are receiving only the basic terms of the current pay agreement, and some may not even be receiving these.
Despite the state of the public finances, the Government are prepared to honour special increases sanctioned to date as well as firm offers or formal commitments which have been made before today, and would be anxious to accept, if at all possible, findings in cases currently before the Labour Court, or before an arbitration board or a review body. However it is obvious that this is the limit.
Accordingly, in the case of all other claims, the Government will request public sector employers formally to invoke Clause 6 of the pay terms of the National Understanding. They will seek immediate negotiations with the public sector unions with a view to agreeing an alternative arrangement which will take account of the community's inability to find the resources to meet further special increases without risk to jobs and the viability of the economy. My colleague, the Minister for the Public Service, will also invite the public sector unions to discuss the general question of the present methods of determining public sector pay and, in particular, whether the present arrangements for Conciliation and Arbitration should be modified or supplemented.
Information on claims for special increases in pay or for improvements in conditions:
1 Name of organisation; 2 Approximate number of employees; 3 Approximate current, annual wage bill; 4 Details of claim and date of receipt; 5 Unions or staff associations involved; 6 Grades of staff concerned and number of staff concerned; 7 Estimated cost of the claim; 8 Present state of negotiations on the claim.