It would appear from recent correspondence issued by the employer’s side of the NJC that the local government pay negotiations for 2013 have reached an impasse. A claim from the Trade Unions for a “substantial” increase was met with a response that any increase should be tied to discussions about terms and conditions. The Trade Unions have now indicated that such a trade-off will not be acceptable.

The inability to achieve movement on reward within the national negotiating framework is extremely frustrating. A our organisations seek to respond to the challenges of reducing resources and look to modernise structures and ways of working, as well as increase productivity levels, those who wish to remain within that framework, are constrained in their capacity to shape future reward structures that reflect that broader modernisation agenda.

Through the PPMA’s research (being undertaken in partnership with the LGA and Edinburgh Napier University), we are demonstrating that pay and benefits form only one part of a potential “new deal” for local government employees and that many of the softer elements (the quality of management and the extent of the employee voice, for example) are equally, if not more, important. The extent of “give” on terms and conditions from that we might realistically expect from the Trade Unions might well be quite small. However it is the symbolism of any negotiated settlement that is actually important.

Many of our organisations continue to recognise the value of the national negotiating framework (although others of course will argue strongly for the benefits of local determination of pay and conditions). However, unless we can escape the rut we currently find ourselves in around reward at a national level, many will question the relevance of current arrangements.

To escape that rut employers have to accept that, however difficult it is, saying any pay award is “unaffordable” is not sustainable. The financial environment is not going to improve. Equally the Trade Unions have to accept that some change is inevitable. As we look ahead to 2015 and beyond, a re-shaping of reward and working conditions must happen. We need to begin that dialogue now. We want to do this in partnership with our staff and their representatives and some of us would wish to continue to do that within a national framework.

On 16th January, the CIPD published their annual “employee attitudes to pay” survey, where they have highlighted that just one in three public sector workers think that their salary should reflect their individual performance, compared to more than half of private sector workers. Charles Cotton, rewards advisor at the CIPD commented: “Establishing a clear link between pay and performance in the public sector is central to improving service delivery and value for the taxpayer.” Personally I think this is simplistic. I accept that it may improve perceptions amongst tax payers, but I am not convinced it is “central” to service delivery improvements.

The CIPD report acknowledges the difficulty of translating the principles of performance related pay into effective practice, particularly for complex roles which are often fundamental in driving service improvement. Ensuring people’s contribution is recognised is essential, but this is part of a broader deal, encompassing “fairness” in pay decisions and meaningful engagement, which builds on people’s strong sense of commitment to the job they do and the communities they serve.

Local government is not of course the only group struggling to have a dispassionate debate about reward. The survey by the Independent Parliamentary Standards Authority published last week, asked MPs what they thought about their own rates of pay. The results provoked some very unflattering headlines about the extent to which MPs were in touch with reality. Dave Prentis, the Unison General Secretary, was quoted as saying: “At a time when millions of workers are getting zero pay rises, the idea that MPs believe they deserve a 32% increase shows they are living in cloud cuckoo land.” Those MPs who were brave enough to stick their heads above the parapet, suggested that it was not an issue of greed, but the ability to attract talented people, representative of the whole community. “An MP earns less than a deputy headteacher in the bigger schools in their constituency, every pharmacist, GP, police area commissioner, in my case, seven employees in the local council.”

Paid less than a local government employee …. how shocking! Seriously though, I would be very happy to have a proper debate about the salary levels that will enable us to attract the best people to become MPs, if we can have a similar debate about the reward structures that will attract talent into the public sector. Indeed we need to have a frank debate with all stakeholders about we believe will be fit for purpose reward structures going forward and we need some commitment from all parties to change. By the way, I wonder how MPs would feel about having part of their pay linked to individual performance.

The PPMA will shortly publish a reward policy statement and we hope this, alongside the research we are undertaking on the new deal and bringing greater differentiation into reward structures, will provoke the broad debate we feel is essential.

I’d like to hear from you with your thoughts.

Martin