Update on Pay Negotiations - 3 April 2009
The first pay negotiation meeting, involving all the HE trade unions, has taken place on 30 March. Subsequent meetings are planned for 27 April and 19 May.
The first formal meeting to negotiate on this year’s pay award took place on 30 March, between the HE employers (UCEA) and all the HE trade unions. The meeting explored the common issues between the claims submitted by the UCU back in December 2008, and by the other HE trade unions in March 2009, as well as the separate issues, which add up to 13 different elements.
The employers’ side provided some initial feedback on the unions’ claims, and it is hoped that a further meeting between the officers will take place to refine the list of issues in advance of the next formal negotiating meeting on 27 April. The unions have been asked to prioritise their main claims, all of which have costs attached. The employers indicated these will have to be considered in the context of very limited overall funding availability, as the employers already have to meet known increased costs in National Insurance contributions and pension contributions to the USS.
Inflation, as measured by RPI, has fallen to zero in February. Some commentators expect it to be negative for much of this year. Public finances are now precarious, meaning that the HE sector can no longer rely on the continuation of recent improvements in public funding and other income.
The joint employer/union Review of Higher Education Finance and Pay Data concluded that the recent surpluses that have been achieved over the last few years are unlikely to be sustainable in the medium to long term. It also pointed out that staff costs have been running ahead of inflation and the increase in public funding over the last 6 years. These costs include incremental progression, promotions and pension contributions. A recent report from the Pensions Policy Institute found that typical, final salary public sector pension schemes, which offer a very similar level of benefit to the USS and RBP, are worth on average around 20% of salary to the employee.
The current funding allocation for 2009/10, when combined with other HE income, indicates an overall increase of 2.03%, although this is not guaranteed for the whole academic year. Staff costs will increase by at least 2.1% (because of increments and increases in pension costs referred to above) before any increase in the national pay spine is agreed. The financial position is therefore extremely tight and many institutions in the sector are currently looking at staffing reductions and/or recruitment freezes.