because of cuts to public spending
Fears for the impact on the Scottish economy as up to 283,000 people could be affected – 11% of the country’s workforce
Sunday Herald - Tom Gordon 23-08-09
Tens of thousands of Scottish council workers are facing pay freezes until 2014, as government spending plummets in the wake of the recession, the Sunday Herald can reveal.
Local authority bosses fear the "unprecedented" financial climate may lead to job losses and redundancies across local government, where wages account for 50% of the annual £10 billion budget.
The grim outlook raises the prospect of councils axing frontline services and strikes by angry staff. The pay freezes would mean millions of pounds less flowing into the Scottish economy. Scotland's 32 councils employ around 283,000 people - 11% of the workforce.
Although the recession has hit private-sector workers with cutbacks and redundancies, the grim reality of one of the worst economic crises in living history has so far left the public sector, a part of the workforce often criticised for being over-protected, relatively unscathed.
However, council leaders will now to discuss the prospect of long-term pay freezes at a closed session of the Convention of Scottish Local Authorities (Cosla) on Friday. A confidential paper going before the meeting warns of "unprecedented consequences for local government and its services", adding: "Over the next 10 years the pressure on funding will be significant.
"If early predictions prove accurate, there is a possible loss of resources in the order of 15% over the three years of the next spending review. In short, income is reducing at a time when costs are increasing and the result is that the gap between the two is getting wider."
Written by Tom Young, the team leader on Cosla's employers group, the report says if current pay policies are maintained then "the prospect of unmeetable demand will arise. This means a fundamental review of our policies and services and the way that we provide these will be required".
The report recommends pursuing a four-year strategy to deliver a "lowest-cost workforce at a price that maintains Trade Union relations and employee motivation", with "maximum flexibility" in pay negotiations. As a first step, "pay negotiations for 2010/11 would be based on a zero increase", compared to this year's cap of around 2.5%.
For 2011 to 2014 "the overall objective would be to achieve pay restraint across all employee groups... this may include a period of pay freeze for the majority or possibly the entire workforce... job losses and redundancies could not be ruled out". Controversially, it also suggests that previously agreed pay deals for 2010/11 could be reopened.
This applies in particular to the third year of a three-year pay deal for Scotland's 53,000 teachers, who are expected to receive a 2.4% increase in 2010/11.
As the original talks involved the Scottish Government, reopening the deal would drag ministers into a potentially bitter dispute. One senior government source said: "Can you imagine telling everyone else they're getting zero - classroom assistants, janitors, other people who work in schools - while teachers get 2.4%? But if you try to reopen negotiations with the teachers' union EIS, they're not going to be happy and you could see schools on strike. It's a nightmare scenario."
The Cosla paper advocates a crackdown on absenteeism with a review of "sickness absence provisions aimed at reducing current levels of absence".
To minimise strike action, the report says there should be an "open-book policy" that lets trade unions see the council's figures as soon as possible. Cosla officials are expected to meet finance secretary John Swinney on Thursday to discuss the issues.
Tam Bell, 49, a street cleaner from Edinburgh taking home £254 a week, said most people across local government would accept pay freezes rather than redundancies. "People will look at it as being best to have a job even if you have a pay freeze for a couple of years, rather than not having a job, but there will be strike action somewhere," he said. "If you're a manager on 70 or 80k, a pay freeze is nothing. But if you're on 11 or 12k, it's a lot."
Matt Smith, Scottish secretary of Unison, said: "If this was to come to pass it would be unsustainable. It's a non-starter. It would also be quite unheard of to reopen a negotiated settlement."
However, Michael Cook, Cosla's spokesman on human resources, said the paper was not part of the annual "dance" between central and local government over funding, but an attempt to deal with the worst financial outlook in decades. "There's a risk we will have less money available to us at a time when some costs are increasing significantly," he said. "There's a fundamental tension in the system that we will need to respond to. There's no getting away from the fact that there are difficult issues here that we want to involve the unions in confronting."
The discussions come in the wake of more bad news on the economy last week, with the UK government predicting it would need to borrow £175bn in the current financial year, although economists fear it could exceed £200bn. Britain's overall debt stands at £800bn, or 56.8% of GDP, its highest since the measure started in 1974. The figures mean that, whichever party wins the general election, there will need to be a sharp fall in public spending, probably coupled with tax rises.
See also:
Scots ministers agree pay freeze
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