Tomorrow night (27th January) Liverpool City Council will adopt a council tax rate for the next financial year at exactly the same level as for the current year. A key component of that zero increase is the decision of the LGA and Local Employers to make no pay increase offer this year.
In the private sector there has been a gross drop in pay of more than 7% since the recession hit. This is a combination of no wages (jobs lost) or reduced wages by cuts in basic pay levels, perks or hours worked. Workers as a whole have felt great pain. By and large against this back drop public sector workers have not done to badly. The 1.4 million employed through local government negotiators have received at least a 3.25% increase with a bit more for those at the bottom and a bit less for those at the top. The remainder of the public sector have had an increase of at least 4.5%. So the LGA had to ask itself two questions when deciding what to do this year:
Is it morally justified to ask people whose pay and conditions have got worse to pay to safeguard pay and conditions for those who have done not brilliantly but OK?
How can we afford to keep going the services which are desperately needed by those in most need at a time when income of all sorts has fallen?
No-one wanted to take the step we did. We also recognise the unfairness of it. Teachers, whose pay is met through national negotiations but which come from the council budget will get 2%+ this year whilst school caretakers will get nothing. Our response is simple – we believe that the Government should not have kept to the three year pay plan which was agreed when times were better.
Looking ahead on public sector pay there is no good news. Labour will keep pay increases to 1% although we will soon see inflation at a rate of almost 3%. Tories don’t actually ahev a declared policy although they are making an alarming series of noises which I believe will mean major cuts to staffing levels and to public sector pay. Lib Dems have the Vince proposals of a maximum of £400 per year increase which applies to a cleaner as much to a chief executive. This clearly means that low paid will get a higher albeit modest increase proportionately than the higher paid. Not quite what I was suggesting but perfectly acceptable and definitely should now be supported.
Top employees salaries are now a mess. Again there are two questions to be asked a moral one and a practical one:
What the h**l do they need £150,000+ for? This applies to everyone. I don’t know what anyone does with that sort of money which far exceeds what any of us needs.
How do we operate in a market where there is considerable traffic from the public to the private sector and where there is clear evidence that senior staff could earn considerably more by making such a move?
In the short term the answers are obvious. There must be pay restraint and the restraint must be greater at the top. In the longer term society as a whole needs to work out why a banker is worth 50 times more than a nurse who might save your life.
Cllr Richard Kemp is Liverpool City Councillor for Church and
Leader of the Local Government Association Liberal Democrat Group