Public sector pay claims for 1998

The UK Government recently made it clear that there will be a continued freeze in public sector pay in 1998. In the light of such news, this feature reviews the September 1997 submissions of two of the largest public sector groups - teachers and nurses - to the pay review bodies.

In September 1997, trade unions, government departments and public employers began to submit written evidence to the five independent pay review bodies that will make recommendations on pay increases for 1.3 million public service employees in February 1998 (UK9702104N). Each year, the evidence submitted to the review body covering schoolteachers and that covering nurses, midwives and health visitors, offers the first indication of the range of potential outcomes in the following year's pay round. These groups comprise the largest number of staff covered by the pay review bodies, their salaries consume a very significant proportion of public expenditure, and their pay settlements have a significant influence on the collective bargaining outcomes of 4 million other public service employees.

Nursing staff

The six unions and professional associations represented on the staff side of the national negotiating machinery for nurses, midwives and health visitors submitted a 27-page document to the review body ("Evidence to the review body for nursing staff, midwives and health visitors, 1998", Staff Side of the Nursing and Midwifery Staffs Negotiating Council (September 1997)). As in previous years, this analyses and considers the impact of the 1997 recommendations and pay settlement.

The submission welcomes the decision of the last review body report to suspend the experiment of a two-stage pay determination process. In 1995 and 1996, national pay awards had been followed by protracted negotiations over very limited locally-determined pay increases. The restoration of national pay determination, subsequently endorsed by the new Labour Government which came to power in May 1997, had partially restored the confidence of nurses in the pay review process. The submission notes, however, that the two-stage implementation of the last pay award (2% in April and 1.3% in December 1997) reduced its overall value to 2.4%; this was below the rate of inflation and lower than the average level of pay increases in the UK. It argues that, whilst the roles and responsibilities of nurses have been extended and their workloads increased in recent years, their earnings lag behind those of their principal comparators. The pay of qualified, registered nurses is significantly lower than that of teachers and police sergeants, and that of non-registered nurses is below that of non-qualified social workers and other comparable local authority staff. Moreover, at least 20,000 nurses are paid less than GBP 4.42 an hour, or 50% of male median earnings.

The claim for "a substantial, fair and just national pay award" is also supported by the argument that recruitment and retention problems are increasing. The submission cites data on increases in overall demand, vacancy rates and the numbers of agency staff, alongside serious supply-side problems; a reduced number of nurses in training, high turnover (16% in 1994/5) and an ageing staff profile with a quarter of registered nurses eligible for retirement by 2000. This evidence of a general shortage of nursing staff is complemented by examples of specialities with severe staffing problems, such as paediatrics, cancer care and mental health nursing. It is argued that the absence of a coherent plan for dealing with recruitment and retention problems has increased the problem of low morale and added to the stress caused by excessive workloads.

Alongside the nurses' claim, the British Medical Association (BMA) has submitted evidence to the review body for doctors and dentists, demanding a 10% pay increase in 1998. This is presented as the first step in a five-year timetable to close the 53% pay gap that has opened up with professional groups, such as accountants and solicitors, over the past 16 years. The BMA also argues that a large pay increase is needed to deal with the chronic shortage of general practitioners (family doctors) and to raise the morale of the medical profession.

Schoolteachers

In their evidence to the schoolteachers' review body, the trade unions representing classroom teachers called for a "substantial" pay increase, "significantly above inflation". This followed an earlier submission from the National Association of Head Teachers (NAHT) which argued for a 10% increase to bring its members' pay closer to that of managers in comparable public and private sector posts. In both cases, recruitment and retention problems were also strongly highlighted. The unusually high number of primary schools currently without a permanent head teacher (5%) was attributed to their lower pay in comparison with secondary school head teachers, according to the NAHT. This claim was disputed by the local authority employers, whose senior representative argued that most vacancies resulted from the large number of head teachers opting for early retirement last summer; this allowed them to take advantage of generous pension arrangements before the deadline on which they were amended (according to a report in the Daily Telegraph).

The recruitment and retention of classroom teachers, however, is recognised as a growing problem: many schools have unfilled vacancies, especially for science and maths teachers; around 60% of teachers are over 40 years old; and recent attempts by teacher-training colleges to recruit additional students have not been successful. The employers, government and trade unions differ in the importance they attach to pay levels and salary structures in the resolution of the problem. Government ministers, committed by their election manifesto to improve education standards, have begun to explore ways in which experienced teachers might be offered incentives to stay in the classroom (reported in the Economist).

Commentary

The evidence recently submitted to the pay review bodies covering nurses, doctors and schoolteachers by trade unions broadly follows the pattern of earlier years. This time, of course, the political context is different; the review body recommendations will be made to a Labour Government with a large parliamentary majority during its first year in office. In order to reduce public service employees' expectations, however, government ministers have confirmed that the freeze on the overall paybill will remain in place for at least another year. For the fifth year in succession, pay increases must be funded by efficiency gains or other savings within existing departmental budgets, and there will be no access to the contingency reserve to fund spending on pay in excess of those plans.

It is difficult to assess whether this policy of "a firm and fair approach to public sector pay" can be sustained without some modification. Commentators in the press expect that a "going rate" for public service pay increases of around 3% - well below the unions' claims - will be accepted reluctantly by employees and the trade unions. This figure is below the current "headline" inflation rate of 3.5% and the latest average annual earnings increases of 4.5%. Given the priority attached by government ministers to improvements in education standards and the quality of health care, it is possible that extra resources will be found to deal with the most severe staff shortages or service problems. For instance, an extra GBP 300 million was redirected from the funding of other departments into 1997's health service budget in the middle of October, to prevent an anticipated "winter crisis" in hospitals. There may be other occasions on which the Government, encouraged by sharp reductions the public sector borrowing requirement, is able to find additional funding for "front-line services". There is little doubt that the Government will resist arguments for extra money to cover pay increases, but the acceptability of modest pay settlements next year may be facilitated by less onerous staffing levels, targeted service improvements, and discussions about longer-term reforms in human resource management and systems of pay determination. (D Winchester, IRRU)

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