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31 July 2005

Limited progress in local government pay reviews
Local authorities in England and Wales are at last introducing new pay and grading structures to remove inequalities between manual and non-manual workers' pay, according to research published in the latest issue of Workplace Report magazine.

With less than two years to go before they need to have completed pay reviews and introduced new pay structures, the Labour Research Department (LRD) has investigated over 100 local authorities and found that 24 have already implemented new pay and grading structures.

However, the structures adopted by a third of these local authorities fail to meet trade union recommendations for eliminating pay inequalities.

Of the 24 local authorities to have introduced new pay structures:

* 16 have extended the national pay spine at the top end so that they can pay more to high earners;
* four have extended the spine at the lower end, so they can pay less than the national minimum pay point;
* 16 have used the job evaluation scheme negotiated by local government employers and trade unions as the basis for their pay reviews, although five of these also used another job evaluation scheme for some employees; and
* four still incorporate ?single-point? pay bands for the lowest-paid jobs, offering employees in those bands no scope for pay progression.

There is considerable variety in the arrangements that have been introduced by different local authorities. The local government trade unions support the use of ?pay bands? covering multiple points on the national pay spine, but recommend that bands should be no more than five points wide and should not overlap. Nevertheless, nine of the 24 authorities have introduced structures with broader pay bands, and the same number have bands that typically overlap by two points or more.

However, a number of authorities are already reviewing their structures. In some cases, this is to reduce pay inequalities further ? Gosport is reviewing its use of single-point pay bands, and Rushmoor is considering a reduction in the length of its pay bands (which are mostly 10 to 11 points wide at present). But South Lakeland has revised its pay structure after discovering that its original version would cost ?1 million more than expected. The government has not allocated any additional funding for pay reviews and restructuring, leading employers to try to introduce new pay structures at ?nil cost?, according to the T&G union.

The lack of funding has also delayed the introduction of new structures in other local authorities. Disputes arose in Coventry and Leicestershire earlier this year, for example, after large numbers of employees had their jobs ?downgraded? in job evaluations.


1. The LRD's research into local authorities was carried out between March and July 2005. The 24 authorities found to have introduced new pay structures were Boston, Chester, Essex, Gloucestershire, Gosport, Havant, Herefordshire, Hull, Luton, Mid Devon, Milton Keynes, North Kesteven, North Lincolnshire, North Warwickshire, Rushmoor, Salisbury, Solihull, Somerset, Southampton, South Gloucestershire, South Lakeland, Teignbridge, Wansbeck and Wyre Forest.

2. The old national pay system for local government in England and Wales involved six pay rates for manual workers and a number of pay bands for administrative, professional, technical and clerical (APT&C) employees; all pay rates and bands were fixed to points on a ?pay spine?. APT&C workers could progress through their pay band while staying in the same job as they gained skills and experience, but manual staff remained on the same point on the pay scale unless they could secure promotion.

In place of this system, the 1997 ?single status? agreement required local authorities to review their pay arrangements using a job evaluation process, and then develop their own local pay grades ? still fixed to points on the national pay spine ? for both manual and APT&C staff. After initial slow progress, it was agreed in the 2004-06 local government pay deal that all local authorities would negotiate on new local pay structures by April 2006, with the structures implemented by March 2007.

3. Joint guidance issued by UNISON, the T&G and the GMB supports the use of pay bands to reward experience and encourage workers to remain in their jobs, but warns that pay structures can be challenged on grounds of discrimination if it takes too long to progress to the ?rate for the job?. The unions therefore recommend that, in order to be effective at reducing inequality, no pay band should exceed five points on the national pay spine. They also advise against the use of overlapping bands, where the maximum pay point of one band is higher than the minimum of the next, as this could go against equal pay principles.

4. More details are published in the July 2005 issue of Workplace Report magazine.

5. Workplace Report is a monthly magazine published by the Labour Research Department, an independent trade union and labour movement research organisation founded 93 years ago. More than 1,800 trade union organisations, including 55 national unions representing 99% of total TUC membership, are affiliated.

3. Labour Research Department press releases are also available on the LRD website at www.lrd.org.uk

4. For further information, contact Lewis Emery on 020 7902 9807 or Jeremy Pinel on 020 7902 9813

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