PUBLIC SECTOR
Local government pay structure developments
With the current long-term deal in local government committing councils to complete local pay and grading reviews and address equal pay issues by 31 March 2007, many organisations already have their new arrangements in place.
A recent survey by the Local Government Employers (LGE) illustrates the outcomes of these reviews showing that the majority of organisations decided to continue with annual incremental progression.
A significant factor in the pay arrangements developed, says the LGE, has been the need to address the issue of equal pay and this has had a profound effect on the shape of the pay structures adopted.
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The survey, set out in two sections, examines both new pay systems and structures. All local authorities were questioned about their pay systems while research into pay structures was confined to those organisations with the National Joint Council (NJC) job evaluation system.
Main survey findings
Among the key research findings were:
As many as 70% of survey respondents have maintained annual incremental progression based on time served at least for some staff.
Just over two-fifths, however, have introduced some form of progression based on assessments at some job levels.
Half of all authorities have opted for narrow pay bands.
Three-quarters of respondents said that their biggest priority in introducing the new structure was “to ensure gender equality” followed by being “cost-effective to introduce”.
Job evaluation
A comparison of job evaluation scores against spinal points across various authorities using the NJC job evaluation system illustrated that shire districts have flatter ”pay lines” than other types of authorities. There were also variations by location with evidence that southern authorities had placed some jobs at a higher level than their northern counterparts.
Effectiveness of new pay systems
All local authorities were also asked to identify their most important reasons for introducing a new system and the five top answers were:
To ensure gender equality (97%)
To contribute to effective recruitment (77%)
Be cost effective to introduce (58%)
Reward responsibility (55%)
Reward the acquisition of important skills and greater competence (42%).
Flexible benefits and other forms of reward
Some authorities also took the review as an opportunity to widen the scope of their pay reform by introducing other benefits beyond those traditionally available in local government. These moves were limited, however, with just 12% introducing flexible benefits and 14% with non-pay rewards.
A final word
“Shorter pay bands tend to be associated with a minimal equal pay risk and traditional incremental progression gives the best basis for predictable cost growth, so there is a clear link between aims and outcomes.” - Jan Parkinson, Managing Director of the LGE
Want to know more?
Title: “LGE survey of pay structure development”, Employee Relations – no. 517, pay advice, Local Government Employers.
Methodology: Questionnaires were sent to authorities that had advanced plans in place for their new pay and reward plans during January to April 2006.
Sample size: 107 local authorities representing 24% of all local authorities and 71% of those who have conducted reviews were questioned on their pay systems. A smaller sample of 35 organisations that operated the NJC job evaluation system responded to the section on new pay structures.
Availability: To download the 20-page report, free of charge, in PDF format visit the “Pay” section of the Local Government Employers’ website at www.lge.gov.uk and choose the heading “Local General Services” on the left of the page. Or simply jump to www.lge.gov.uk/lge/core/page.do?pageId=53148
The Local Government Employers (LGE) was created by the Local Government Association (LGA) in April 2006. It works with local authorities, regional employers and other bodies to lead and create solutions on pay, pensions and the employment contract, to ensure the provision of excellent and affordable local services. For more information visit www.lge.gov.uk.