States confirm majority of employees to take real-terms pay cut

Wednesday 12 September 2018

Only 159 public sector employees out of a workforce of over 6,000 have been offered a pay award in line with rises in the cost of living, the States has admitted amid strong criticism of their proposed deal.

After months of fraught negotiations between unions and the States Employment Board to secure salary increases in line with inflation, a deal was put forward to the workforce this summer involving a mix of one-off and long-term pay rises for each group across 2018 and 2019.

With all but four pay groups affected due to receive an increase behind inflation levels, the deal was blasted by unions, while Deputy Rob Ward went so far as to suggest that workers had been “misled” over how much they’d be getting.

Now the exact amount of employees expected to miss out on an inflation-busting offer has been revealed.

The salaries of as many as 86.1% of the total public sector workforce will still lag behind increases in the cost of living this year, with that figure rising to 90.7% - around 6,100 employees – in 2019 if the rate of inflation (RPI) remains at 4.5%.

The figures were released by the Chair of the States Employment Board during the first sitting of the States Assembly after the summer break following a question from Deputy Ward.

They show that those getting a 10.72% rise over the next two years - the four groups that have accepted the Workforce Modernisation offer: Ambulance Service, Family Support Workers, Residential Child Care Officers, and the Youth Service - represent only 2.4% of the total workforce with a headcount of 159.

Pictured: Deputy Rob Ward branded the pay deal "misleading."

The question from Deputy Ward came after he raised concerns about the controversial pay deal, saying public sector workers had been misled over the amount their pay would go up.

He wrote to the SEB to get them to justify their "convoluted and complicated" pay proposals, savings made from ‘restructuring’, and the spate of “expensive consultants” being hired.

During yesterday’s States meeting, Treasury Minister Deputy Susie Pinel also took questions about the pay award, which had previously been described as the most the States could afford. Deputy Ward asked her to confirm how much money had been allocated in the current Medium Term Financial Plan (MTFP) for public sector pay rises over the course of the MTFP, and how much had actually been allocated to pay awards.

Pictured: Deputy Ward's open letter to the States (click to read in full).

Deputy Pinel said that £4.2million in 2016, £5.6million in 2017, £6.7million in 2018, and £5.3million in 2019 had been allocated "for pay awards, workforce modernisation and PCRS the public employees’ contributory and retirement scheme.”

She added that £6.7million and £3.9million had been allocated to departments for the 2016 and 2017 pay award - £7.6million against the £9.8 millions available. "The pay awards made in the MTFP so far in 2016 and 2017 have therefore exceeded the amount allocated in those years and the shortfalls had to be funded by underspends,” she explained.

Deputy Ward asked: "Given that States’ workers pay is falling behind RPI between any estimate between 5.1% and 13%... since 2001, does the Minister believe that public service workers, and health, education, civil service, infrastructure are overpaid? If so, how much more does she suggest we cut?"

Pictured: Deputy Susie Pinel, the Treasury Minister, said she didn’ think anyone expected a pay rise of around 4.5% in line with inflation.

Deputy Pinel replied: "Pay awards are incredibly difficult as the Deputy would be aware and there have been many meetings and discussions with the unions over the current situation. There are many requests including ‘Workforce Modernisation’ groups who have accepted pay awards and doctors, but this would be £40million if the pay awards were agreed and we have £33.6million allocated - a difference of £6.4 million."

When asked by Deputy Geoff Southern if she would accept the below inflation pay rise was a pay cut, Deputy Pinel said: “It may be below inflation but I don’t think anybody, including the Deputy, would have expected a figure of 4.5% RPI. So the expenditure has been fixed and agreed by this Assembly in the MTFP until 2019."

Deputy Pinel said that the MTFP agreed by the Assembly had set the maximum expenditure limits between 2016 and 2019. She added that the current finance law means that "spending limits are set for four years and can’t be adjusted upwards in the event of a temporary or permanent increase in income." However, she explained that she plans on proposing a new finance law "that will allow more flexibility to adjust to changes in income" early next year.