Trade union concern over government department’s regional pay proposals

In March 2007, a government department put forward proposals for a new regional pay system for workers employed in courts of justice in England and Wales. These have proved controversial and have been criticised as creating a ‘north–south’ pay divide by the largest trade union organisation in the civil service. However, the proposals reflect the adoption of zonal pay arrangements elsewhere in the public services and in the private sector.

In March 2007, the Department of Constitutional Affairs (DCA) put forward pay reforms that would see five regional pay bands introduced for staff employed in courts of justice across England and Wales.

Under current arrangements, a single national pay scale is supplemented by an additional allowance for staff in London and the southeast of England, reflecting the higher cost of living in these areas. The effect of the DCA’s proposals would be to place the vast majority of court staff living in the north of England, the southwest of the country and virtually all of Wales in the lowest of the five pay bands.

A DCA spokesperson stated that ‘DCA’s driving principles are to offer fair pay to people based on the job they do, where they do it and how well they perform. Regional pay reflects the reality of the job market in this country’.

Trade union reaction

According to the Public and Commercial Services Union (PCS), which organises court staff, the starting salary in the lowest pay band would amount to GBP 11,726 (€17,174 as at 4 May 2007) compared with GBP 14,432 (€21,137) for employees in the southern parts of England outside of the London area. The General Secretary of PCS, Mark Serwotka, commented: ‘These proposals are not only scandalously unfair, but will entrench the north–south divide by driving down pay in some of the most deprived areas of the country’.

Although the number of workers involved is relatively few – 5,500 workers in total – the proposals are unprecedented for the civil service. PCS fears that ‘these proposals represent the thin end of the wedge’. Pay bargaining arrangements for the current number of more than half a million civil servants below the most senior grades are at present devolved to the level of individual government departments and agencies. While this has led to discrepancies between workers in the same pay grades across departments, beyond the payment of additional allowances in London and the southeast, there is no further geographical differentiation of pay scales.

Increasing use of zonal pay systems

A commitment to introduce measures to make pay systems in the public services more responsive to different labour market conditions between and within the UK’s regions formed part of the government’s 2003 budget statement (UK0306110F). Since then, pay review bodies, which determine pay for four out of every 10 public servants, have had to take account of regional and local factors in their pay award recommendations.

Subsequent developments have reflected practices in the private sector, where large employers undertaking the same operations at locations across the country – such as multiple retailers and high street banks – have increasingly adopted zonal pay systems. These replace, or augment, long-established London and southeast allowances with systems under which locations are allocated to one of several pay bands (typically three to six bands) according to local labour market circumstances (‘Understanding reward: zonal pay systems’, IDS Pay Report, No. 904, May 2004). Recruitment and retention difficulties in ‘hot spots’, including some of the major provincial cities, are addressed by moving them into the higher pay zones, which also cover London and the southeast of the country.

In the prison service, the former system of London weighting has been replaced by a four-zone system of locality pay, which introduces geographical differentiation beyond the London area. Factors taken into account in determining the allocation of sites to particular zones include cost of living, housing costs, regional earnings, unemployment and staff turnover. In the health service, the Agenda for change programme introduced in 2003 (UK0303104F) provides scope for the introduction of local pay premia to help address recruitment and retention difficulties. This has also led to greater geographical differentiation in actual pay rates. The pay review body for schoolteachers has also proposed the introduction of zonal pay for teachers in England.

Commentary

Despite developments elsewhere in the public services, the DCA’s proposal for court staff represents the first attempt to introduce a zonal pay system into the civil service. Although the proposal has met with trade union hostility, the basis on which it is being contested between the government and unions has shifted. At the time of the 2003 budget statement, trade unions feared a break-up of national pay bargaining arrangements. The current proposals focus on introducing a greater measure of geographical differentiation within a nationally-negotiated framework.

Paul Marginson, IRRU, University of Warwick