A modest start on the local budget

Peter Robinson’s proposal for a two year pay freeze for public sector workers earning more than the UK average marks a definite start to getting down to local budget negotiations. Gerry Adams’s call in the Assembly last week for a 15% cut in the salaries of MLAs and top civil servants was part of a threadbare offer but at least shares with Peter’s an attack on the public wages bill.

 Peter’s additional proposal for “an end to “one-step progression” under which workers gradually move up their pay scales and the removal of performance bonuses, except for those paid at the most basic level” seems considerably more ambitious in the longer term. With VAT up from January and utility and other bills set to rise during the year how restive will the unions be, given a Hobson’s choice between saving jobs and lower pay without  increments?

To balance a pay freeze Peter proposes inflation only rises in rates and still zero water charges. This is good politics but soft option economics. Figures are needed for Peter’s proposed savings and for the size of the dividend to be paid by the publicly owned port of Belfast.  The predictable rejection of the  privatisation of this and other public assets  in the present climate will be popular with the unions and  SF will hardly object.  However so far only a modest dent seems to have made on the £4 billion budget shortfall.

 

 

, , , , , ,

  • bob wilson

    Brian being a cosmopolitian chap who keeps up with events you are aware that the two year pay freeze for everyone earning over £21,000 is simply copying the UK Govt policy?
    Although the Executive has the power to do what it likes this was almost inevitable.
    So inevitable it is hardly worth the headline.

    “DUP proposes 4,000 job losses for civil servants” would be a more intersting headline. Especially as this is ENTIRELY a local decision.

    BBC have long abandoned any attempt at rigorously challenging the DUP or SF I’m surprised you followed their lead

  • Neil

    If it were an exact copy of UK wide policy that would not bode well, given that our average wage is 3k less than the next lowest average and 8k lower than the South East of England and our costs of living are a full 10% lower. The one size fits all approach is politically expedient, but lazy and wrong.

  • Brian Walker

    Gosh Bob, Sorry to disappoint you. Not only are wage levels different ( although much less so higher up the scale). They are not obliged to follow the English example. I think what looks like the end of automatic increments and bonuses could have greater long term impact. And note that transfer of revenue to capital not allowed for English depts.

  • Brian Walker

    And anyway since I first filed, the Mallie file may be briefer but it’s fuller..

    http://eamonnmallie.com/2010/11/robinson-cuts/

    ” There be less recruitment. It is reckoned this would cut numbers by 4000 jobs over the spending period. All quangos are coming under scrutiny. Use of consultants would be reduced by 25 per cent in all departments. The number of departments would be reduced to eight. The number of MLAs will be cut to seventy two/five. Ministerial salaries will be reduced by 5/10 pet cent voluntarily. Some real estate has to be sold in the coming years.
    Procurement would have to be overhauled and streamlined to avoid rolling over contracts. There would be fewer big cross border east west meetings with greater use of video conferencing. It is proposed that £100m be taken from current spending and put into capital spending annually.”

    Apart from the politics of a smaller Assembly, this is the comparatively easy bit. I’d like to know if £100m is all they are going to divert from revenue to capital over the period.to make up for the 37% capital cut. Presumably not.. they may want to do more in subsequent years.

  • bob wilson

    Brian crossed wires I think. I said ‘the Executive has the power to do what it likes’.
    Cutting 4,000 jobs when from 2005 to 2010 Bruce Robinson was only able to reduce the full time equivalnt by 3258 is the much more dramatic announcement and will have greater long term impact than a two year freeze which as I said is merely copying London.

    On the transfer of capital to revenue – so much for the view that Osborne was not listening or didnt care – he changed the rules just for Robbo and Marty!

    I suspect the unfreezing of the regional rate – apart from a need to raise money is recognition by Robbo and Marty that they looked particualrly foolish asking for special treatment when they had indulged in such blatant short term opprtunistic decisions

  • Glencoppagagh

    It isn’t clear that Robinson is proposing a pay and recruitment freeze right across the public sector. It would be grossly inequitable if it did not apply in health and education as well and will we still have £1m pa legal aid junkies?

  • Congal Claen

    No incremental progression for MLAs then? No, didn’t think so. They’ll be getting the rate for the job from the start.

    Imagine you’re 18 and considering what to do with your life. Maybe goto university like the government suggests – you’ll earn more in the long run! Or maybe take up some job that you need practically no qualifications for. Surely, that would be a non-starter. Let’s consider that…

    Suppose you decide to apply for an Admin Officer (AO), requiring a few GCSEs. You don’t need to do A levels or goto University. So, you start of on £16,312 per annum rising to £19,419 after 5 years during which time you’ve earnt £89,845 (at today’s rate) or about £70,000 after tax. The AO will eventually end up on £22,180 after 9 years.

    Aye, but whatabout the uni route to riches. Well, you do A-levels and sponge of mum and dad for 2 years, so we’ll be generous and say that’s for free. Then of to uni. With fees, lodgings and living expenses I’m estimating £30,000 for the 3 years.

    So, by this time you’re down £100,000 compared to the school leaver on the admin job. But, I hear you say, the world’s your oyster and you’ll be earning way more with your shiney new degree. Let’s see what’s available within the civil service…

    Whatabout Scientific Officer. You’ll need a degree for that. Well, you’ll start of on £21,826 and after 8 years you’ll be on £26,086. So, you start of £2,407 pounds a year better off than the AO. Or about £1,600 after tax. Eventually, you’ll be £3,906 better of or about £2,600 after tax.

    So, after 40 years you’ll just about make up the difference. And only if you live for free for the first 2 years and you’re not paying any interest on your debt.

    Freezing increments for those above £21,000 will exacerbate the situation.

  • “I’d like to know if £100m is all they are going to divert from revenue to capital over the period.to make up for the 37% capital cut.”

    Brian

    Perhaps you could move yourself to go to the DUP website where you can read the full document before passing judgement.

    In terms of your question No is the answer. £100m would be transferred from revenue to capital in first two years (total £200m). Additional revenue streams to be created to go to capital e.g. dividend from Port of Belfast.

    Private monies/joint ventures to get more capital spend.

    Later in the CSR period (when the market values should have recovered) asset sales, sale and lease back etc to raise further monies for the capital budget.

  • Carson’s Cat

    So then, everyone who’s terribly upset at a pay freeze or the nice little unearned pay-rises civil servants get as of right.

    If you aren’t happy then start divvying up which of them you’d sack first cos that’s the choice…

  • iluvni

    How much exactly is this ‘average industrial wage’ which Sinn Fein MLAs take home every month?
    Does anyone know?

  • DC

    It’s enough to buy a second holiday home in Donegal – I kid you not.

  • Congal Claen

    Personally, I’d say it should happen within health and education. They got he biggest rises during Gordon Clown’s years. Doctors should not be earning 6 figure sums.

  • Scales

    Civil Service pay scales have 9 or 10 progression steps with less than 50% at the top of their scale – the rate for the job.

    There are equality issues with scales this long and ACAS have already been taken to court and been made to reduce the length of their scales – Crossley v ACAS [1304744/98]

    Unless this is dealt with the Executive well end up dealing with another equal pay case – and all grades will be involved not just AA/AO

    I can’t see how this is going to save the Exercutive money

  • Rory Carr

    They are not “unearned pay rises”. They are increments in salary earned by dint of the worker’s application of increased experience. Why should the employer alone be the beneficiary of such additional performance?

  • medillen

    About £20,000 annually so about £230 a week.

  • iluvni

    Time for clarity from Sinn Fein on this issue.

  • Civil Servants haven’t had automatic increments for years, and it’s a very sore point. The truth is that the Civil Service gets the cost of their increments included in their annual pay negotiations – so if the increments on their own will increase the pay bill by 2.5% and DFP are only willing to offer a package worth 3% in total, everyone gets 0.5% on their pay rates, including those on the top of their pay scales.

    The rest of the public sector – teachers, nurses, doctors, local government staff, NHS administrators, etc – get their pay increments as of right without having to ask for them. Their pay negotiations are solely concerned with how much each pay point will go up by.

    While realising that some of the above mightn’t have much of a pay scale to go up – some posts may only have one point – that means your average Civil Servant is already getting a smaller pay rise every year than any other public servant. Yet, it is the Civil Servants who are being targetted again, and not even the Mandarins who shouldn’t notice if they didn’t get any sort of increase.

  • I should of course clarify that Increments are only paid to staff who are actually do their job properly. Those who are working well above the basic requirement to do their job rightly no longer get any extra money.

  • Brian Walker

    fair deal, It wasn’t up on the DUP website when I blogged. Blogging is an interative activity as you know.. Still seem well short of £4 billion though.. Bob, Devolution allows you to switch from revenue to capital

  • Gerard

    ‘One-step progression’ is a silly one. No one should be receiving an increased salary over and above inflation without a corresponding increase in productivity. (RE: AndyB double standards which you have mentioned make it all the more important that the issue is addressed)

    Less sure about the removal of performance bonuses though; I have no idea how these are administered in the public sector but managed right they can drive productivity increases and therefore be good value for money.

    Water rates – get it over with!

  • Quite right. DUP tweedledee and Sinn Fein/IRA Tweedledumb are presented as the ONLY examples of economic thought. God help us if the sort of drivel spouted by Robinson and Adams is the “local solution” to deficit management. Plastic bags, phone masts, pay freezes – all puerile 3rd rate thinking but presented as if it were the only choices we can have. Good old BBC – Pravda on the license fee.

  • JH

    What are your suggestions David?

  • Jj

    Its also worth mentioning that although civil servants in NI havent had payscale progression(the top of which scale is the rate for the job) their equivalents in England Wales have.

    Thus, of any 2 people starting in the same job in NI and E/W on the same date – only 1 would progress up to the rate for the job in say, 6 years. The NI person would linger somewhere in the bottom half, irrespective of their ability or performance.