The following press release will be issued tomorrow:
North Somerset UNISON, which represents staff working at North Somerset Council and in Schools across the district has reacted with dismay at the news that the council's reserves have shot up over the last year by £3 million, while at the same time the council continue to make massive cuts and have also refused to pay staff the living wage for financial reasons. When we read the council's latest budget papers the most striking thing for us was the increase in the levels of council reserves - a £3 million increase over the course of the year and £3.6 million above their approved level of £8 million. The council's reserves are effectively like an individual's savings - they are there to protect them against unexpected expenditure. Every year the council's Chief Financial Officer agrees a prudential level of reserves for exactly that reason - currently it's £8 million. But on top of that over the last few years the council have created what they call a contingency and transition fund in case the cuts they have proposed prove unworkable - this is about £2 million - but year on year they haven't needed to spend it. As a result we think they've got about £5 million effectively sat there doing nothing, which could instead be used to protect services at a time when they are making massive cuts - £50 million over the last 3 years.
The council are giving various reasons why they cannot use their reserves for services, but we think people need to understand that the council's reserves have increased in part because of underspending on services. It is also our view that the council's arguments are contradictory to say the least. For instance, the council seem quite happy to take £1.4 million of their reserves to spend on capital projects, such as the ICT Transformation programme, when actually this is precisely the sort of project that they could borrow money for. At the same time they are arguing that they cannot use reserves for services this year because there is still another £22 million of cuts which will need to be made over the next few years, and that every penny is required. They are also planning to accept the 1% council tax freeze grant, or bribe as we like to call it, this year, when the Audit Commission's recent report Tough Times 2013 has shown that those councils who have accepted freeze grants over the last few years have seen their incomes fall. And this is from a council whose successive below the cap council tax increases over a number of years have resulted in £8 million less in their base budget. They are also spending £100,000 on a consultant to help them get value for money in renegotiating the £100 million Support Services contract with Agilisys, rather than using that money to create an in-house service improvement plan to act as a comparator to the Agilisys offer, and thereby show the council whether in fact this contract is providing value for money, or rather as we suspect costing the council over the odds.
As far as paying the Living Wage goes, it was only just under a month ago that the Council's Living Wage working group presented its report with the recommendation not to implement the Living Wage for financial reasons - the cost of £435,000 was considered too great. We now know that implementing the Living Wage is easily affordable for the council because they have all that extra money in their reserves. In addition over the last 4 years, while council workers have been subject to a 3 year pay freeze broken by a 1% pay increase, the council have underspent on their budget for staff salaries by £3 million - £1 million of that in the last year alone. UNISON has estimated that over that period local government workers have lost 18% of their pay, because of high levels of inflation. Workloads have increased so that council workers are now doing more for less. The lowest rate of local government pay is currently £6.45 an hour, only a few pence above the national minimum wage. If local government pay had just kept up with inflation since 2010, those at the bottom of the pay scale would now be earning £7.53 an hour - just a few pence below the current living wage of £7.65 an hour. But instead 1000 workers - 20% of the workforce - at North Somerset Council and in North Somerset Schools earn less than the living wage of £7.65 an hour - these workers are mainly women - they are our School Crossing Patrols, School Lunchbreak Supervisors, Cleaners, Passenger Assistants, and Mobile Meals Helpers. These workers really deserve to be paid the Living Wage, which after all is simply the minimum income needed to provide the basics - we're not talking luxury living here.
It is also UNISON's view that the council, as the largest local employer, needs to be leading by example. If the council paid its staff the living wage, it would be in a good position to encourage council contractors and employers across North Somerset to pay their staff the living wage, with the consequent benefits not just for the individuals concerned, but also for the local economy in terms of increased spending in local businesses, and ultimately increased business rates for the council. Almost a quarter of all workers living in North Somerset earn less than the Living Wage - we are quite simply a low wage economy and this has a serious impact on the businesses operating in the area. In addition all those workers earning below the living wage, including local government workers, are also relying on tax credits and other benefits to supplement their income. Increasing their pay to the living wage results in savings to the benefits bill, as well as increased National Insurance contributions and taxes. Increased money coming into the Treasury should also mean less or no need for cuts to local government funding. In fact it has been very interesting that over the last few weeks as the flooding crisis has worsened that both the Prime Minister David Cameron, and the Secretary of State for Local Government Eric Pickles have both made remarks indicating that money is no object and that we are a rich country - in fact we are the seventh richest country in the world. This indicates to us that the massive cuts to local government funding are, if they ever were, no longer necessary.