The Budget & Home Office Pay
Chancellor of Exchequer Delivers Budget and Comprehensive Spending Review
PCS looks at the impact on our pay.
CSCS Age Discrimination: Deadline for Claims
In January 2020, PCS launched legal action against the government over the capping and tapering provisions affecting redundancy payments under the Civil Service Compensation Scheme (CSCS). Members aged over 58 and 9 months or older and who have, or are about to leave, employment with a compensation payment for early severance, voluntary or compulsory redundancy, are potentially eligible to bring a claim. The deadline for submission of cases is Monday 8 November 2021. Click here for more information and how to join the claim.
Background
The Chancellor of the Exchequer delivered his Budget speech incorporating the Comprehensive Sending Review of government departments yesterday. Obviously, this has far reaching consequences for all our lives, however we will all have anxiously looked to see if there is an end to the public sector pay freeze.
Well - the immediate, and widely trailed, headline is that there is. Departments will not be bound by pay freezes or caps. However, the devil is always in the detail and as the Chancellor is proposing no additional funding from the Treasury for pay rises which he expects to come from existing budgets, then the scope is clearly limited. This follows years of below inflation pay rises culminating last year in a pay freeze for those earning over £24k and a measly £250 for those earning under. PCS did not accept this, and we did not believe that it reflected the reality of low pay in the department or the work that our members had done all the way through the pandemic. However, at the time we decided that it was not the right time to ballot members over the ‘offer’.
Cost of Living Crisis
Although last year was described as a pay pause, the reality is that it was a real term cut when inflation is taken into consideration. Inflation measures the rate of price increases and even the government preferred method of measurement – CPI, which does not include housing costs is currently at 3.1%. This means that a pay freeze or pause is actually a 3% pay cut.
But inflation is obviously variable, and the CPI measure is formed from goods/services across a wide variety of sectors to give an overall figure. The reality is that in areas such as utilities bills, and food are rising considerably quicker than 3.1%. Given low earners spend a higher proportion of their income on utilities and food, they are affected disproportionately by inflation and experience higher rates.
Whatever the Office of National Statistics is telling us about inflation, we all know prices are going up and the value of the money in our pocket has diminished in comparison to pre-lockdown levels. And things don’t look like they will be stopping soon – Bank of England Economists are predicting inflation between 4% and 6% next year.
Further Pressure
Members will know that a 1.25% increase in National Insurance payments, which will be deducted from all our pay is planned to take effect soon. This will see take home pay reductions for all members.
Added to this the Government are refusing to reduce our pension contributions despite the 2018 valuation of the Alpha scheme indicating that our contributions should be reduced by 2%. The Government also want members to shoulder the extra costs of the McCloud judgement which found the imposition of Alpha was discriminatory. This necessitates a huge process of allowing members to transfer years back to the old schemes, with inevitable costs, and would be the first case of making the victims pay for their restitution.
Despite the Prime Minister saying that he wants a high wage economy, the one area he has direct control over is the Civil Service and there are few plans to increase pay. To put this in context recent large-scale exercises to recruit Asylum Decision Makers are running into issues around recruitment and retention. Additionally, within one Border Force region out of 400 vacancies only 260 were filled.
It’s clear that the levels of Home Office pay are causing problems with recruitment and retention right across the Home Office and that they no longer compare well to comparable areas.
Low Pay Crisis
The Chancellor also announced a rise in minimum wage to £9.50 from next April, which based on 37 hours worked, makes an annual salary of £18,348.30. This means that our members in the AA National grade, currently at £18,244, will be below this level next year. We have written to the Home Office Reward Team urging them to act over this, and not just to reflect this figure from next April, but to take steps to increase levels of pay more than the minimum wage.
It is unacceptable that the lowest paid in our department will now be the lowest paid in the country. As one of the supposed great ministries of state and a Civil Service which aspires to be an exemplary employer, we should not be paying the legal minimum that they can get away with.
Including the planned April 2022 rises, the level of the minimum wage will have increased by 50.6% since 2013. Over that period and including the legal minimum the AA (N) salary will have increased by just 13.6%. This is a shameful reflection of how we have treated the lowest paid in this department, and PCS believes that we must refocus our efforts on pay awards which provide underpins based on flat rate increases which maintain financial gaps between grades, but stop the increasing percentage differences.
Removal of Pay Restraint
Of course, the removal of pay restraint and caps is welcome, however is this all smoke and mirrors? Even if departments are given the freedom to pay higher increases to salaries, if they have no money to do so then it really is a hollow promise. What looks likely is that departments are not to receive any greater funding to address pay, and in fact they will be under greater scrutiny and face greater challenges with the money that they receive. Indeed, it has been reported that although the Home Office will see 1.3% real terms increase to our budget this will potentially be swallowed by the requirement to fund the recruitment of 20,000 police officers.
The government needs to properly fund departments if they are going to give pay rises that properly reflect the pressures of inflation and adequately reflect the work that we do.
Pay 2022
Looking forward to pay negotiations in 2022, it seems certain that we will have a fight on our hands just to maintain our real time levels of pay. That would go no way to addressing the cuts we have seen over the years.
Inevitably we look back to previous national industrial action ballots where we have failed to reach the anti-trade union thresholds. If it becomes necessary to ballot next year, then we must be in a position where we can win a ballot and that will mean all of us in our workplaces and teams playing our part. We need more non-members to join and we need more members to become active. We will continue to issue briefings and hold meetings around pay as we move into the new year.
Get involved!
Remember, make sure that you stay in touch with your union. You can find your membership number in your latest email digest from PCS. All members, particularly those who work on counter; local print or one of the many customer service offices should support this campaign by contacting your local branch or the authors of this briefing to offer your assistance.
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