11 May 2013

Pay Strike: Why Jason Kitcat's Numbers Don't Add Up.

The Green leader of Brighton & Hove City Council Jason Kitcat recently mentioned that the pay bill for Brighton & Hove Council is £180m.

By this he is referring to the total "controllable" wage bill. i.e that which is not subject to national agreement. (The total budget for the council is £750m)

We have also heard that around 6,000 of the total 8,000 workforce receive allowances. And also that 80% of these staff will see no change to their pay.

Of the other 20%, some of the hardest hit are the 260 refuse & parks workers at the CityClean & CityParks departments. They are 4.3% of the total B&H staff with a total wage bill of around £5m. Which is just 2.8% of the total overall wage bill of the council.

So, these 4.3% of staff receive just 2.8% of the wage bill. i.e. they are some of the lowest paid and are facing cuts of up to £4,000 per annum, with the average loss around £2,000 on top of losing 8 days from their holiday allowance.

So what about those remaining staff in other departments that are supposedly to gain from this?

Apart from the few snippets of information above, Kitcat has said as little as possible. So it is impossible to know who is benefiting and on what salary.

The suspicion has to be that this silence is because a lot of those benefiting are on higher salaries, some much higher. (See final postscript at end for more on pay differentials and pay ratios).

What we know about low paid workers benefiting from this is miniscule. The Greens are shouting loudly about the 25p hourly increase to £7.45 per hour of the lowest grades but this adds just £8 per week to the lowest paid full time worker's pay. And this decision was taken long ago and has nothing to do with the present dispute.

Welcome though this small increase is to the very lowest paid, it is a minor change to the pay bill.

As the Greens have also let slip that 10% of the total remaining staff will "lose a little", this gives us a clue to how many are "benefitting" from this minor change at the lowest rung.

As they have not defined what "a little" means, I assume they are including some of the 4.3% of staff losing heavily from this. I can only assume that below the Green spun figure of "£25 per week loss" which is 8% of pay for some, is their definition of "a little". So lets be generous & say a third of the 4% of staff losing big amounts in CityClean/Parks are in this Green spin defined category.

Even the Greens have admitted 250 staff are losing "big" amounts. Of this 250 some staff are outside of CityClean/Parks. This means that "only" 4% of staff overall are losing "big" amounts by the Greens own spun definition and 6% are benefiting. This allows the Greens to spin that "there are more winners than "big" losers".

But obviously not all of these "winners" is going to be low paid. Without the figures we can only guess. But let's be generous to the Greens and say most of these winners are low paid.

But as already mentioned above, these low paid "winners" are only gaining £8 per week. Even if all these "winners" were the lowest paid this would only amount to 260 workers getting a £450 gain each year which comes to less than £120,000 or just 0.07% increase in the total wage bill.

Compared to the savings from the 250 most affected by the big pay cuts, at an average of £2,000 loss each, that is £0.5m or 0.3% cut to the total wage bill.

Then, according to the Greens a further 600 are losing "a little", lets estimate this at £500 per head, which is £0.3m or 0.2% cut off the total wage bill.

So, overall that's less than 0.1% added to the wage bill & 0.5% cut from the wage bill. A cut of 0.4% overall.

And there is a further twist. Kitcat has said that even excluding the compensation package "the overall wage bill is going up".

He hasn't said by how much, but this year the government has announced a 1% across the board pay rise for the public sector. This doesn't help those hit with the 10% to 25% cuts to their individual wages because it has already been factored in to make their loss look less.

So, what's the betting that the overall rise in the wage bill is less than 1%? The 1% advised by the government minus the 0.4% overall cut. This leaves a 0.6% rise.

Because it is only 6% of staff that are seeing their wages massacred by 8% to 25%, Kitcat can hide that in the overall budget and still be correctly claiming that the wage bill is going up overall. Sneaky.

What this means in practise is those on £30k to £140k are seeing increases while those on £17k-£19k are seeing their pay massacred & those right at the bottom are only gaining a pittance.

Is this what the Greens signed up for when they joined their party?

The Greens have added a social justice clause to their constitution. "Fair is worth fighting for" they say. Well they have certainly got a fight on their hands and a lot of them are on the wrong side!

If the Green council continues with this then one side or the other is going to be destroyed. Either the Greens will turn into union bashing Tories sacking striking workers & splitting their own party or they will back down. There is no imbetween. Workers already feel they have nothing to lose as their livelyhoods are being trashed and they know their cause is just. So Greens cannot assume this will quietly go away.

If social justice and fairness mean anything surely it means that if there has to be pay cuts you start at the top and work down. If the Greens want to see their party continue  they had better start practising what they preach.

PS. I freely admit that some of these figures are ballpark figures based on the limited information provided by the Green administration. If Jason Kitcat wants to point out any inaccuracies, we would all welcome detailed information he is willing to provide. In the absence of that we can only assume the figures are accurate. Certainly they would need to be out by an order of magnitude to invalidate the argument and I really cannot see how that is possible.

PPS Finally, I'd like to answer a question I think a lot of people must be asking.

Why are the Green administration doing this?

Well first of all, I don't think Jason Kitcat is some sort of pay slashing green ogre beamed in from Tory Central Office. Though I can understand why a lot of people might think that.

I think he is a technocrat, he might even admit that himself. A technocrat is a high level bureaucrat and I'll even admit, he seems quite an efficient one.

He also, like most councillors, trusts his council officers.

So when they came to him with a legal opinion (that they argue has to be kept secret) that something had to be done about pay, he went about efficiently getting this past his party without much question or debate. The faceless bureaucrats had spoken and could not be denied. There was only leeway in the minor detail.

So, the Greens (with one noble exception) naively trusted their leader and voted to hand the power to cut pay to the faceless bureaucrats without apparently understanding the implications.

So, this gives the Greens an excuse, but they'd be wise not to try and use it. They could hide behind the faceless bureaucrats and wring their hands in anguish. But if they do that they will become yet another party that no-one can trust on anything at all.

I'm not sure of the technicalities of getting the pay decision back to the elected full council (and some accountability), but I am told it is possible. The Greens had better do it and fast. Every day that goes by they are losing credibility.

Kitcat must feel backed into a corner and unable to change course because of his loyalty to his bureaucrats.

So, this brings me on to why the faceless bureaucrats have come up with such an unfair way of sorting this issue.

The key is "pay differentials". First another bit of spin from Kitcat. He likes to say he has reduced the pay ratio between top & bottom from "over 12 to 1, to just over 10 to 1". This sounds impressive but is pretty easily achieved by changing just 1 salary out of 8,000.

The Chief Executive has famously took a pay cut from £163,000 a year to £141,000. While welcome, this has no impact on the other 7,999 employees. Worse still, she has took on an assistant on £80,000. So it hasn't even reduced the pay bill!

Also, to try and claim that this is in any way comparable with people on a £17,000-£19,000 salary facing a 20% cut is deeply offensive. No one on Penny Thompson's salary faces hardship.

Now we come on to another key piece of spin. Perhaps the most important of all.

Some Greens including Kitcat are claiming it would cost £30m and bankrupt the council to put this right without cutting pay.

For that £30m figure to be correct, every single one of the 6,000 employees that the council control wages for, would have to see a rise in pay of £5,000. Ridiculous. It would cost £2.5m, 1.4% of wage bill for the 6% of staff underpaid to be equal paid. A pay freeze & £50k cap would easily provide that.

9 comments:

  1. Dear Neil

    I think some of your calculations are wrong and you are misquoting some numbers:

    260 parks & refuse staff out of 8,000 staff means they represent 3.25% of the workforce, not the 6% you suggest.

    90% of all staff will see very little or no change with the offer under consultation. Of that remaining 10% a majority will see an increase in take-home pay, a minority will see a reduction.

    The council expects the wage bill to rise slightly if the offer is implemented. The council also will have to fund the cost of compensation. This process is categorically not a budget saving exercise.

    Lots of very, very detailed figures have been exchanged and discussed by council and union negotiators. That is right and proper. The council has also offered to share all its legal advice with the union negotiators, but that offer has been declined is my understanding.

    The Assistant Chief Executive post was actually part of a senior management restructure which REDUCED the total senior pay bill as a number of other senior posts were deleted or merged.

    Unfortunately external pressures do mean that the council has no choice but to complete this final stage of single status this year. The leaderships of both unions involved know this and have for years, as have previous administrations. This is last chance saloon for the council to resolve this matter.

    I don't agree with your figures but I do thank you for recognising that I'm not a "pay slashing green ogre"! The council has to resolve this now and is absolutely committed to doing so in the way which minimises detriment whilst being fair, legal and affordable. Any ideas which can help improve the offer within those limitations will be welcomed with open arms.

    regards,
    Jason

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    Replies
    1. Thanks for replying.

      The 260 parks and refuse staff are 4.3% (not 6%, I will correct this) of the 6,000 staff affected by allowances. Which I have assumed is the directly controlled staff not under national agreements, can you confirm this?

      I admit my point is not as stark, but still relevant in demonstrating that CityClean/Parks staff are low paid workers. They are 4.3% of total staff receiving just 2.8% of pay bill.

      6,000 is the relevant number of staff, not the total figure of 8,000, because I assume the £180m pay bill only refers to those directly employed by the council, not those on national agreements? Can you confirm what this £180m refers to?

      If it is less than 6,000 staff outside of national agreements, this would mean CityClean/Parks staff are even lower paid in comparison with other council workers.

      Your use of the phrase "very little" when talking about the 90% of staff seeing very little or no change, needs to be defined. Can you give parameters of "very little" change?

      You say of the final 10% of staff "the majority" will see an increase. As you don't specify I assume that is 5.1% of staff seeing an increase and 4.9% seeing big cuts in pay. Not far different from the 6% and 5% I suggested.

      As you make no comment on my figures for the lowest paid pay grade, I assume the small £8 per week increase for a full timer is correct?

      You say you have reduced the senior pay bill, can you define this and give a figure? This could just be as a result of 1 less post overall and because the top salary was cut. Welcome but hardly significant.

      I was under the impression that the union has not been offered your full legal advice. So will be interested to see their response to that.

      As you don't question any of the other figures in my post I can only assume they are reasonably accurate. Including crucially on pay ratios and the 1.4% of total wage bill needed to put this equal pay issue right.

      Look forward to a further response with the details asked for. Cheers, Neil

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  2. Also the cost of "compensating" workers who lose out is money that could be used to increase pay of those deemed not on equal pay and therefore help eliminate the losses of those losing out.

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  3. Thanks Neil, appreciate the movement in there, although there are still a fair number of misunderstandings, I'm afraid. You'll understand that we're in a very awkward position, unfortunately, and all this kind of data has to be handled scrupulously. I'm not in a position to go about correcting all your data and my not mentioning it is not acceptance that you are correct. The council will get more detail out as and when it can. Meanwhile I'd urge everyone with an interest in this, starting with staff and unions, to take part in the consultation, and I can assure you that if improvements come forward we'll be keen to see if they meet our three key tests: are they fair, are they legal, and are they affordable?

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  4. Thanks for the reply. Obviously it is very disappointing that you have not answered any of the supplementary questions I asked.

    This lack of even the most basic information is really not helpful to anyone trying to understand what is going on - the residents, council or workers affected.

    I really can't understand why all the information deemed acceptable for release is not already in the public domain. This idea that it is ok to drip feed a little info here and there is part of the reason why people are so angry. What happened to your transparency agenda you love to shout about so much?

    This idea that we are having "a consultation" on this is really weird. How do we get involved with this "consultation", I don't know anybody who has an idea how to get involved.

    All we know is we have been presented with an ultimatum, something you called only a few weeks ago 'a final offer' and not subject to any meaningful negotiation with either the unions or anyone else. You seem in recent days to have backed away from this position, now the anger and frustration of the workers and even a lot of people in your own party is clear for all to see.

    I really wonder what you thought was going to happen. We made clear our vociferous opposition long ago before and during the meeting when you and your colleagues on the policy and resources committee voted to give draconian powers to unelected council officers and the chief executive to force this through.

    Did you really think throwing a few thousand at workers affected was going to "compensate" them for losing their livelyhood for ever and condemn them to poverty wages and losing their homes. Could you not see this sort of angry reaction? This, coupled with your call for councillors to receive more than £47,000 in allowances seems to show a really callous and cavalier attitude to those 'outside of your world'.

    Also don't you think the idea of trying to subvert an acceptable negotiated collective agreement by divide and rule tactics goes against the basic principle of social justice that Greens say they hold so dear. So dear in fact they have just added it to their constitution.

    I think admirably, your Green MP Caroline Lucas, Councillors Alexandria Phillips, Phelem McCafferty, Mike Jones and other decent members of your party understand this.

    I hope you understand the damage you have already done to the morale of awarding winning staff at CityClean & CityParks and also to the standing of your own party both locally and nationally. A lot think that is already something you should resign over and I think they have a good point. But I'm not interested in that, I am just interested in a council doing the right thing.

    It is not too late for you to sort this out. It may be politically difficult to cut pay in the top half of the pay scale, but that is the only decent, fair and affordable deal you should consider if indeed it is necessary at all.

    Try harder! Much much harder. I can see where you yourself are spinning your figures. At least I am only inaccurate where I have a lack of information. Information you and the council are keeping to yourselves for whatever reason. Thank you for your reply but you have got to make sure you sort this out without hitting the low paid. That is the bare minimum. Either that or resign.

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  5. Thanks for all this information, Neil, and for your efforts to elicit some information from Jason Kitcat. I share your frustration at his refusal to engage (such a contrast with the Green administration's earlier openness).

    I have no inside information from any direction - I don't work for the council and am not a member of the Green Party (or any other party). I'm just a local citizen trying to understand what is going on here, and interested in exploring ways to come up with a just outcome.

    Your figures suggest that 6800 staff at the council are unaffected by the proposals (2000 who don't receive allowances, plus 80% of those who do). Jason's comment gives an unaffected figure of 7200 people (90% of the total workforce).

    Have I understood correctly your figures for winners and losers among the remaining 1200 staff? You said 10% of these would lose "a little" (that's 120 people) and that 250 people would lose a lot. That makes a total of 370 losers, leaving 830 winners (just over 10% of the total workforce). But your post says that 6% are winners - where did this figure come from?

    Jason's comment suggests there are only 800 people altogether with a gain or loss to their take home pay. If we use the same method - 10% losing a little, plus 250 big losers, that makes 330 losers and 470 winners. These numbers do correspond quite closely to the 4% and 6% figures you gave (that may be a coincidence!)

    But as you rightly say, unless we are told more, it's hard to know what the split is between higher and lower paid workers here.

    I asked the council back in December 2011 how many employees were paid over £40,000 p.a. The answer was 645, but this included people employed in schools. The total cost to the council of employing these 645 people was £52,767,905.14, which works out at an average of £81,810 each.

    I then asked how many of this 645 were not working in schools, but they never replied to my FoI request.

    There are 76 schools in the city. If the average number of teachers on over £40,000 per school is 3 (this is pretty much a guess, better info welcomed), then that accounts for 228 of those 645 people, leaving 417 whose pay is within the control of the council. We know the actual salaries of 23 of these high earners; the senior officers. Their average salary is £88,576.

    If the council paid each of the 417 high earners £40,000, instead of their current average of over £80,000, this would save over £13 million on the annual wage bill. Would that be enough to settle the allowances dispute without pay detriment to the lowest paid?

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  7. My last comment was a bit of a confused mess as I was in a bit of a hurry so I have deleted it.

    Dani, your analysis is excellent with loads of really good information, thank you. You are a star!

    I think we can make some progress from your info. But it might take me a while to work it out, will get back to you.

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  8. Neil,

    you seem to have used the living wage policy raise to staff pay as leverage for your argument, setting it against the single status allowance cuts to come up with your overall cut in wage bill?

    I'm personally affected by the wage cuts - £1800 per year - but do not appreciate misinformation from those arguing my case. I have requested from my union a clear set of overall agreement figures, (which would detail who gains and who loses) which will be a very difficult document to understand, so that I might try to get my head around what is happening in the big picture. I'll see if my line manager can get it for me too.

    The bottom line is this should have been settled when we went on strike before. Not left until the last minute and I'm sorry the Green administration are being singled out as scapegoats for this, as it is an inherited problem. I wish there was such a thing as a neutral position but there just isn't. We'll see how the consultation goes.

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