States Pay Policy: Report to the States.

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made (12/01/2007) regarding States Pay Policy: Report to the States.

Subject:	States Pay Policy: Report to the States
Decision Reference:	MD-C-2007-0002		Exempt clause(s):	n/a
Type of Report: (oral or written)	Written		Person Giving Report (if oral):	n/a
Telephone or e-mail Meeting?	n/a		Report File ref:
Written report – Title	States Pay Policy
Written report – Author (name and job title)	Jeremy Harris, Policy Adviser
Decision(s): To approve a report dated 12th January 2007 on States Pay Policy for presentation to the States.
Reason(s) for decision: The June 2006 pay award has not yet been agreed for most States employees. The purpose of this report is to state clearly the States policies within which awards are being negotiated and to confirm the intention of the States Employment Board to settle the 2006 pay award in accordance with States policies.
Action required: Mr. Harris will contact the States Greffe to arrange for the report to be published in the ‘R’ series and presented to the States on 16th January 2007.
Signature: Chief Minister		Date of Decision: 12 January 2007

States Pay Policy: Report to the States.

REPORT TO CHIEF MINISTER

States Pay Policy

Introduction

The Chief Minister is asked to approve the attached report on ‘States Pay Policy’ for presentation to the States.

Background

The June 2006 pay award has not yet been agreed for most States employees. The purpose of this report is to state clearly the States policies within which awards are being negotiated and to confirm the intention of the States Employment Board to settle the 2006 pay award in accordance with States policies.

Resource implications

This report does not in itself have any resource implications, as confirmed below, although clearly any pay settlement will have resource implications and will need to be subject to assessment by the Treasury and Resources Department.

Financial: Nil

Manpower: Nil

Property: Nil

ICT: Nil

Law Drafting: Nil

Recommendation

It is recommended that the Chief Minister should approve the report for publication in the ‘R’ series and presentation to the States on 16th January 2007.

Jeremy Harris,

Policy Adviser

12th January 2007

STATES PAY POLICY

REPORT BEING PRESENTED TO THE STATES BY THE CHIEF MINISTER ON TUESDAY 16th JANUARY 2007

Introduction

States members will be aware that the June 2006 pay award has not yet been agreed for most States employees. The purpose of this report is to state clearly the States policies within which awards are being negotiated and to confirm the intention of the States Employment Board to settle the 2006 pay award in accordance with States policies.

Allocation for 2006 Pay Award

The parameters for the June 2006 pay award were established in the States Business Plan 2006 P151/2005, which was debated and agreed in September 2005. P151/2005 determined States spending limits for 2006 and set a spending framework of broadly 2.5 per cent increases in expenditure in each of the next five years through to 2010. This is part of the tax and spending framework, within the Fiscal Strategy, required to manage the transition in the corporate tax structure of the States through to 2010 and beyond. The tax and spending components are both vital to achieving a sustainable financial position for the States.

As staff costs make up over half of States expenditure the annual pay awards are the single most important factor driving increases in States spending.

The provision for the increased cost of pay for 2006 and 2007 has been set at no more than 2.5 per cent per annum. This provision has since been reviewed and agreed by the Council of Ministers as part of the Annual Business Plan for 2007(P92/2006), and subsequently agreed by the States in September 2006.

Under the new Finance Law there is no longer a central contingency and the full cost of pay awards has to be met from within departments’ cash limits. Accordingly, any increase in pay in excess of the 2.5 per cent provided for would have to be funded from cuts in jobs and services by departments.

2006 Pay Negotiations

In March 2006, the increase in the Retail Price Index was 2.4 per cent and traditionally the March index has been an indication of the level of public sector pay settlement. The States Employment Board confirmed the employer offer of 2.4 per cent for one year from 1 June 2006, or alternatively a two-year deal of 2.5 per cent per annum on 1 June 2006 and 1 June 2007. Negotiations over the subsequent months have, to date, seen agreement reached with police officers on a two-year deal and prison officers on a one-year 2.4 per cent pay deal.

Other pay groups have made claims ranging from 0.5 per cent above the relevant RPI figure to 6 per cent above that figure, though the general level is for a claim of 1 per cent above RPI.

If the claim of the manual workers at 3.4 per cent was applied to all employee groups from June 2006 the annual additional cost would be in the order of £2.7 million.

Effect on jobs and services

There are already significant unbudgeted pressures on States spending including meeting the rising cost of higher education, prison education and the prison improvement plan, third party planning appeals, the winter fuel allowance and the rising cost of social security supplementation - to name but a few. It will already be extremely difficult to meet these pressures within agreed spending limits, and without reducing essential services to the public.

In these circumstances it is simply not possible for States departments to also absorb increases in the paybill in excess of 2.4 per cent for 2006. Pay awards in excess of this amount will result in cuts in services to the public and the loss of jobs.

Effect on inflation

The States has an Anti-Inflation Strategy with a target of containing inflation to a maximum of 2.5 per cent per annum and it is in accordance with this Strategy that the States must endeavour to constrain growth in public sector spending, and therefore implicitly in pay awards, to no more than this level. Public Sector pay awards above this level would add to inflationary pressures, and hence ultimately be self defeating

Current rates of pay

The vast majority of States employees are amongst the best paid employees in the Island and enjoy significant differentials over their UK counterparts. This has been confirmed by salary surveys conducted this year and is especially the case at the lower and middle ranges of pay scales where most States employees are paid. Combined with final salary pension schemes, other attractive employee benefits and a high level of job security, this makes the States compensation package amongst the best in the Island.

Conclusion

The States Employment Board hopes that all pay groups will adopt a responsible attitude and accept either a one-year pay award of 2.4 per cent from June 2006 in accordance with the relevant rate of inflation, or a two-year deal of 2.5 per cent per annum for 2006 and 2007. The Council of Ministers is also seeking the support of States members and the public in adhering to public sector pay policies which are ultimately in the Island’s best interests.

12th January 2007