Police Staff Council Trade Union Side

Pay Claim for 2017

1. Introduction

The pay and allowances of police staff in England and Wales have risen by only 4.2% in

the six years since 2011

Government cost cutting in the police service has slashed the value of police staff pay to

a level where it is no longer competitive. Police staff are finding it hard, if not impossible,

to manage on their current salaries

The previous government’s public sector pay policy means that police staff are facing

only a 3% pay increase over the next three years, unless this policy changes under the

new government

The lowest Police Staff Council pay point will be overtaken by the National Minimum

Wage in 2019

The lowest two Police Staff Council pay points are already below the Joseph Rowntree

Real Living Wage hourly rate of £8.45/hour

The retail prices index (RPI) of inflation hit a recent high of 3.7% in May 2017

The table below shows the major fall in living standards suffered by police staff since 2011:

Police staff pay

increases

Rise in cost of living1

(as measured by Retail Prices

Index)

2011 0% 5.2%

2012 0% 3.2%

2013 1% 3.0%

2014 2.2% 2.4%

2015 0% 1.0%

2016 1% 1.8%

2017

3.5%*

1 Office for National Statistics, Consumer Price Inflation Reference Tables, December 2014

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(* June 2017 RPI figure for illustration)

While the value of total police staff pay rises over the last six years has been 4.2%, the value of

the economy has increased by over 12%, the cost of living has risen by over 20%, company

profits have jumped by 26%, the pay of chief executives for the UK’s largest companies has

grown by over 32%, and total dividends paid to shareholders have grown by 57%.

These statistics open the PSC Trade Union Side’s pay claim for police staff members for 2017.

Something has to change when it comes to police staff pay, and 2017 is the year that it has to

start to happen.

Police staff have recently voted for a major reform package to their terms and conditions of

employment. The Police Staff Council Pay and Reward Review, which opened in October 2014,

has recently resulted in the introduction of the 2017 version of the Police Staff Council

Handbook. This implements a number of important changes to police staff terms and

conditions.

This was the outcome of Part 1 of the Review. Part 2, which is now getting underway, will look

at how police staff basic pay is determined, including the role of job evaluation and force pay

grading schemes. Part 2 of the review is unlikely to be concluded during the 2017/18 pay year.

2. Synopsis

This claim is split into the following sections:

Executive Summary

Inflation and the Falling Value of Police Staff Salaries

Pay Movements in the Public Sector and Wider Economy

Addressing Low Pay in the Police Service

Police Service Funding

Conclusion

3. Executive Summary

It’s time for police staff to have a proper pay rise. The Police Staff Council Trade Union Side

therefore submits the following claim on behalf of our police staff members in England and

Wales:

A 5%, or £1,000, increase on PSC pay points, whichever is the greater, from 1

September 2017

Removal of the two lowest pay points in the PSC pay spine

A 5% increase in standby allowance

A table is attached to the claim at Appendix A setting out the impact of this claim on the existing

PSC pay spine. This also shows the hourly rates for each of the PSC pay points.

The Police Staff Council Handbook sets out the following six factors to which the negotiators

must have regard when negotiating PSC pay deals. They do not constitute a rigid formula, but

they are significant reference points for any pay claim, and the pay award negotiations which

will follow.

The current values (June 2017) attaching to the factors are:

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Pay movements elsewhere in the public sector: 1%

Pay movements elsewhere in the economy: 2%

Movements in the retail prices index (RPI): 3.5%

Recruitment and retention factors: no measure available

Police Service Funding (2016) 0%

Many of these pay determination factors remain depressed as a result of the government’s

public sector pay policy and the on-going freeze of Home Office Grant to police forces.

However, Police and Crime Commissioners, at the encouragement of the Home Office, have

taken advantage of rules allowing for an increase in precept to offset the freezing of central

police grant. The value of the precept in the overall scheme of police funding varies force by

force, depending on the percentage of total police funding which is made up in each force from

council tax.

One of the very big changes since last year in the pay determination factors has been the sharp

rise in the retail prices index of inflation since the start of 2017. The Trade Union Side wishes to

emphasize the need for the eventual pay award to recognise the substantial rise in inflation this

year, and its detrimental impact on the spending power of our members.

At the time of writing, the Police Staff Council has no measure available in respect of

recruitment and retention issues in forces in England and Wales.

4. Inflation and the Falling Value of Police Staff Salaries

As the following tables show, the value of police staff salaries has fallen drastically over the last

6 years. Inflation has picked up considerably over the last 12 months and brings home just how

uncompetitive police staff pay has become in the market place.

Over 2010 and 2011, RPI inflation centred on the 5% mark, before a decline saw the rate fall to

around 3% between 2012 and 2014. Inflation then went into a further slide, with RPI around 1%

over most of 2015. However, inflation began to rise again over 2016 and has escalated sharply

this year, taking the May 2017 RPI figure to 3.7%, but since fallen back to 3.5% in June 2017.

The most accurate indicator of changes in the cost of living facing workers is the Retail Prices

Index (RPI). The Police Staff Council pay determination factors recognise this.

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4.1 Inflation Rates

Source: Office for National Statistics, UK Consumer Price Inflation: April 2017, published May 2017

4.2 Inflation Forecast

The Treasury average of independent forecasts predicts that RPI inflation will average 3.6%

over 2017 and remain at or above 3% every year between 2018 and 2021, following the pattern

shown in the graph below. These annual rates show the level of pay rises which would be

needed for police staff salaries just to maintain their current value up to 2021.

Source: HM Treasury, Forecasts for the UK Economy, February 2017

0

1

2

3

4

5

6

May

-11

Au

g 1

1

No

v 1

1

Feb

-12

May

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No

v-1

2

Feb

-13

May

-13

Au

g-1

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No

v-1

3

Feb

-14

May

-14

Au

g-1

4

No

v-1

4

Feb

-15

May

-15

Au

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No

v-1

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Feb

-16

May

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No

v-1

6

Feb

-17

May

-17

% c

han

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ver

12

mo

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Year / Month

Inflation rates

RPI

3.63.3

3 3.2 3.3

0

1

2

3

4

2017 2018 2019 2020 2021

% in

cre

ase

Forecast annual increase in cost of living

RPI

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4.3 Impact of Inflation Forecast on Public Sector Wages capped at 1% until 2019

The potential impact of this inflation forecast on the value of an average public sector wage,

against the background of the existing 1% public sector pay cap until 2019, is shown below.

Over the next three years, the average public sector wage would decline in value by over

£2,000 if pay increases remain capped at 1%.

5. Pay Movements in the Public Sector and Wider Economy

5.1 Pay settlements

Pay settlements across the economy stand at 2%, which is well below the long-run median of between 3% and 3.5% that prevailed for over two decades until the 2008 economic crisis.

Pay settlements in the private sector stand at 2%, which is double that in the public and not-for profit sectors. Private sector settlements have been running far in advance of the public sector since 2010. When the public sector pay freeze was in place for the 2011 and 2012 pay years, average private sector pay rises were running at 2.5%.

The table below shows average settlements for employment sectors where the police staff trade

unions represent members, or sectors, that compete for similar types of workers as public

services. Therefore, employers falling below relevant rates can expect damage to their ability to

recruit and retain high quality staff.

Pay settlements are expected to continue on a similar path, averaging 2.2% over 2017 in the

private sector2.

2 Bank of England, Agents’ Summary of Business Conditions, February 2017

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-1532

-2202-2500

-2000

-1500

-1000

-500

0

2017 2018 2019

Cu

t in

val

ue

of

ann

ual

pay

(£

)

Impact of 1% pay cap on value of average public sector wage

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Sector Average pay settlements

Across economy 2%

Private sector 2%

Public sector 1%

Not for profit 1.3%

Energy & gas 1.8%

Water and waste management 2%

Retail & wholesale 2.5%

Admin & support services 2.2%

Source: Labour Research Department, settlements year to June 2017

One of the key public sector awards, which is of interest to police staff in England and Wales, is

the outcome of the Police Remuneration Reveiw Body’s deliberations for 2017. We understand

that this will now not be reported until September this year, due to delays caused by the election

in June. Since 2,000, police staff pay awards have never been less than those awarded to

police officers.

5.2 Average earnings

The graph below shows trends in average earnings growth over the last two years, which mirror

pay settlements. It shows the competitiveness of public sector wages in decline. Since April

2013, private sector earnings growth has been running ahead of the public sector every month

except two. In 2014, the private sector rate accelerated sharply while the public sector rate

flattened out.

Though the gap narrowed going into 2016, a sharp divide remains, with the rate across the

economy standing at 2.1% and private sector growth at 2.3%. Average public sector wages

rose by only 1.1% in April 2017.

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6. Addressing Low Pay in the Police Service

The Police Staff Council has an opportunity this year to address some structural factors within

the pay spine relating to low pay.

6.1 National Minimum Wage (NMW)

The forecast for hourly National Minimum Wage rates up to 2020 are set out in the table below.

The table shows the corresponding annual rates (hourly NMW rate x 37 x 52.14) plus the

nearest corresponding Police Staff Council annual salary and pay points (2016 values):

YEAR NMW (Hourly) NMW (Annual) Police staff pay point

2017 £7.50 £14,469 £15,486 4

2018 £7.90 £15,241 £15,486 4

2019 £8.30 £16,012 £15,876 5

2020 £8.75 £16,880 £16,755 7

The above figures show which pay points will need to be deleted to comply with the NMW from

the PSC 2018 pay round forward. By the time we reach the 2020 pay award, the projected

NMW figures will require the current PSC pay points 4, 5, 6 & 7 to be either increased, or

deleted.

A comparison of the NMW hourly rate with the hourly rate of the lowest pay point in the Police

Staff Council pay spine shows just how much the gap between the two figures has closed in

recent years:

Year NMW PSC Difference % PSC above

NMW

1999 £3.60 £4.56 £0.96 26.7%

2000 £3.70 £5.08 £1.38 37.3%

2001 £4.10 £5.26 £1.16 28.3%

2002 £4.20 £5.44 £1.24 29.5%

0.00.51.01.52.02.53.03.54.04.5

Apr15

Jun15

Aug15

Oct15

Dec15

Feb16

Apr16

Jun16

Aug16

Oct16

Dec16

Feb17

Apr17

% c

han

ge o

f 3

mo

nth

ave

rage

on

p

revi

ou

s ye

ar

Month

Average earnings growth

Whole Economy

Private sector

Public sector

Page | 8

2003 £4.50 £5.62 £1.12 24.9%

2004 £4.85 £5.78 £0.93 19.2%

2005 £5.05 £5.96 £0.91 18.0%

2006 £5.35 £6.14 £0.79 14.8%

2007 £5.52 £6.29 £0.77 13.9%

2008 £5.73 £6.46 £0.73 12.7%

2009* £5.80 £6.86 £1.06 18.3%

2010** £5.93 £7.53 £1.60 27.0%

2011 £6.08 £7.53 £1.45 23.8%

2012 £6.19 £7.66 £1.47 23.7%

2013 £6.31 £7.74 £1.43 22.7%

2014/15 £6.50 £7.95 £1.45 22.3%

2016 £7.50 £8.03 £0.53 7.1%

*2009: PSC Pay Point 1 deleted

*2010: PSC Pay Points 2 & 3 deleted

Deletion of the two lowest PSC pay points (4 & 5) as part of the 2017 pay award would be a

positive step in both raising the living standards of police staff at the base of the pay spine, and

also assisting with the requirement to comply with the rise in the NMW going forward to 2020.

6.2 Living Wage

The Living Wage, set by the Living Wage Foundation, has become a standard benchmark for

the minimum needed for low-paid staff to have a “basic, but acceptable” standard of living.

£3.00

£3.50

£4.00

£4.50

£5.00

£5.50

£6.00

£6.50

£7.00

£7.50

£8.00

19992000200120022003200420052006200720082009201020112012201320142015

PSC bottom pay rate compared to NMW

NMW

PSC

Page | 9

Police forces are now competing in a labour market where the Living Wage of £8.45 an hour

outside London and £9.75 an hour in London has become an increasingly common minimum

point in the pay scale.

Studies supported by Barclays Bank have shown that Living Wage employers report an

increase in productivity, a reduction in staff turnover / absenteeism rates and improvements in

their public reputation.

Consequently, there are now almost 3,000 employers accredited as Living Wage employers by

the Living Wage Foundation, including some of the largest private companies in the UK, such

as Barclays, HSBC, IKEA and Lidl.

The following seven police forces in England and Wales, to their credit, have signed up already

as Living Wage employers for their police staff workforces:

Cleveland

Durham

Humberside

Northumbria

Nottinghamshire

West Midlands

West Yorkshire

These forces have already abolished PSC pay points 4 & 5, and start their pay scales at pay

point 6: £16,314 which comes in at £8.46/hour. Our 2017 pay claim seeks to extend this good

practice to all forces in England and Wales.

In Scotland the government has established the Living Wage as the baseline for pay within all

its public sector organisations, including Police Scotland.

It is also worth noting that, in April this year, the Living Wage Foundation published the results

of a survey covering more than 800 accredited real Living Wage businesses, ranging from small

and medium sized enterprises to big FTSE 100 companies.

The survey found that employers experienced a range of benefits from increasing the wage of

low-paid staff, most notably stating that Living Wage accreditation has[2]:

enhanced the organisation’s reputation as an employer (86%)

improved relations between staff and managers (58%)

increased the commitment and motivation of Living Wage employees (57%)

improved recruitment of employees into jobs covered by the Living Wage (53%)

7. Police Service Funding

One of the PSC pay determination factors is the level of police funding for the pay year in

question.

According to the Home Office, police budgets have been frozen since 2015. Although central

police grant continues to be set at a level below pre-2015 levels, the Home Office points out

that a flat cash settlement can be achieved for police budgets if Police and Crime

Commissioners make full use of their powers to increase council tax for police purposes.

[2] The proportion of employers supporting each finding is shown in brackets

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Police and Crime Commissioners can increase council tax for police purposes by up to 2%, but if council tax is to be increased by 2%, or more, the PCC must undertake a referendum. Most increases during this financial year have therefore been at 1.99% Additional headroom applies to PCCs whose council tax is in the lowest quartile of their category of authority. These PCCs require a referendum only if they propose to increase council tax by more than £5.00 on a Band D property.

In 2017/18, nine PCCs increased the precept by £5.00 on Band D and one further PCC by £4.95. The percentage increases in each case were more than 2%.

8. Conclusion

The Police Staff Council Trade Union Side submits this claim in the expectation that police staff

will receive a proper pay rise in 2017. Our claim is reasonable and proportionate, particularly

given the drastic decline in the value of our members’ earnings over the last six years.

The Police Staff Council pay determination factors clearly justify the lifting of the government’s

public sector pay cap.

The work of our members is vital to the security and safety of the people in our two countries,

and it is time that the Employers and the Government acknowledged this. The role of the police

came under significant scrutiny in the recent election, with special emphasis being put on the

impact of police cuts on the ability of the police to keep our communities safe. The latest crime

statistics, published on 18 July 2017, show a continuing increase in serious crime rates in

England and Wales. This reinforces the need for the police workforce to receive investment.

This is needed to ensure that vital police staff posts are filled, and that the police service can

continue to recruit and retain the brightest and best police staff by paying competitive salaries.

Our claim seeks to achieve this.

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Appendix A

SCP Current SCP

Hourly Rate

5% or £1000

Hourly Rate

% Increase

4 £15,486 £8.03 £16,486 £8.55 6.46% Flat Rate

5 £15,876 £8.23 £16,876 £8.75 6.30% 6 £16,314 £8.46 £17,314 £8.97 6.13% 7 £16,755 £8.69 £17,755 £9.20 5.97% 8 £17,194 £8.91 £18,194 £9.43 5.82% 9 £17,634 £9.14 £18,634 £9.66 5.67% 10 £17,943 £9.30 £18,943 £9.82 5.57% 11 £18,327 £9.50 £19,327 £10.02 5.46% 12 £18,720 £9.70 £19,720 £10.22 5.34% 13 £19,125 £9.91 £20,125 £10.43 5.23% 14 £19,521 £10.12 £20,521 £10.64 5.12% 15 £20,205 £10.47 £21,215 £11.00

16 £20,874 £10.82 £21,918 £11.36 17 £21,618 £11.21 £22,699 £11.77 18 £21,999 £11.40 £23,099 £11.97 19 £22,674 £11.75 £23,808 £12.34 20 £23,349 £12.10 £24,516 £12.71 21 £24,030 £12.46 £25,232 £13.08 22 £24,813 £12.86 £26,054 £13.51 23 £25,656 £13.30 £26,939 £13.96 24 £26,535 £13.75 £27,862 £14.44 25 £27,519 £14.26 £28,895 £14.98 26 £28,428 £14.74 £29,849 £15.47 27 £29,307 £15.19 £30,772 £15.95 28 £30,180 £15.64 £31,689 £16.43 29 £31,053 £16.10 £32,606 £16.90 30 £31,938 £16.56 £33,535 £17.38 31 £32,778 £16.99 £34,417 £17.84 32 £33,597 £17.42 £35,277 £18.29 33 £34,440 £17.85 £36,162 £18.74 34 £35,451 £18.38 £37,224 £19.30 35 £36,570 £18.96 £38,399 £19.90 36 £37,563 £19.47 £39,441 £20.44 37 £38,538 £19.98 £40,465 £20.98 38 £39,522 £20.49 £41,498 £21.51 39 £40,518 £21.00 £42,544 £22.05 40 £41,502 £21.51 £43,577 £22.59 41 £42,492 £22.03 £44,617 £23.13 42 £43,473 £22.53 £45,647 £23.66 43 £44,454 £23.04 £46,677 £24.20 44 £45,435 £23.55 £47,707 £24.73 45 £46,422 £24.06 £48,743 £25.27

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