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Inflation, salaries and job security

April 29, 2010

Members will be aware that we received an effective pay cut this year in the form of a below-inflation 0.5% pay increase, the lowest in the public sector.

The University of Leeds management described this increase as in line with inflation. We’re not sure what definition of inflation they were using. RPI was recently announced at 4.4% (and at 4.8% excluding mortgage interest). That’s over eight times our pay increase. In the government report in January 2010, interest rates were said to be rising at historic levels.

Below inflation pay deals are typically associated with an understanding over job security, especially in the private sector where short term pay cuts or freezes might be expected to be compensated in more stable times. We have been offered nothing.

Gas prices are up 107% and Electric up 66% in the last five years (source: Which?). We have seen incredible food inflation in the last two years. Car insurance rose in the last quarter of 2009 faster than at any other period since 1994 (source: The AA). Petrol prices are at a record high as anyone who visits a petrol pump will know. Public transport costs have risen higher than inflation in some areas, with Yorkshire particularly badly hit. In fact, March saw the biggest annual rise in fuel and transport costs since records began in 1997. Childcare costs have risen at near twice the rate of inflation (source: Personnel Today).

Make no mistake, the real value of your salary has decreased measurably in the last year, and what your pound will buy now is considerably less than it would have been able to cover a year ago. In effect, the University pays you a good deal less today in real terms than it did a year or two ago.

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Artist's impression of the offered pay increase

The UCU meets the employers’ representatives UCEA each year to negotiate pay increases. This year, UCEA are offering us a 0.25% pay increase. What is more, the amount is offered as ‘non-consolidated’. This means in effect a one-off payment that is not pensionable, won’t increase your pension, won’t be added to the pay scales and won’t feature in your pay next year. It’s a small and condescending pat on the back. Someone earning £30k will receive an extra £75, which is equivalent to £1.44 a week. Before deductions.

This ‘offer’ has been rejected by the UCU, Unite, Unison, GMB and the Educational Institute of Scotland.

Members will be curious to know why the University has asked Schools and services to factor in a 2% consolidated pay rise (for 2010/11) into their projected budgets for submission to the Integrated Planning Exercise. That is to say, a figure 800% higher than that being offered. UCU members would be grateful if the University management made a statement in support of such a pay increase, as this would represent a more meaningful beginning to negotiations.

Some members might argue for pay restraint in return for job security. However, the paltry pay offer comes with a refusal by UCEA to discuss job security at a national level. We need a commitment to job security and a realistic deal, at least in line with the rises deemed affordable elsewhere in the public sector, and one that does not result in a further effective pay cut.

Members may have been following this issue via Times Higher or the national UCU website. More details will be posted here as they are made available.

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