Agenda item

This report gives an update on the progress of the pay negotiations for the financial year 2026/2027 and sets out the Councils pay offer for 2026/27 for referral to Full Council for agreement. 

Discussion

The Chief Organisational Culture Officer introduced the report which set out the progress of the pay negotiations for the financial year 2026/2027, and to set out the Councils pay offer for 2026/27 for referral to Full Council for agreement. She advised that the report suggested a 3% increase however it had always been a commitment to match with inflation when looking at the cost of living award which at the time of publication was 3.2% and had in fact now risen to 3.4% and suggested that the Committee may wish to recommend an inflation linked approach rather than a fixed percentage.

Members noted the Joint Consultative Committee comments from the earlier meeting around a pay increase in line with inflation being the bare minimum; the need for a revisit of the Kent County Council sleep?in payment figure referenced in the report; more creativity wanted in the overall pay package; and the potential adverse impact concern, including on diversity particularly in relation to MedPay.

The Chief Organisational Culture Officer advised that the Employee Value Proposition continued to be reviewed and developed on an ongoing basis. By way of example, work was currently underway with the Public Health team, and the Council had achieved Bronze status under the Healthy Workplace Award with an ambition to progress to Gold status. Whilst a number of benefits had been introduced the previous year, the implementation of such initiatives required time to establish contractual arrangements, embed them within the organisation, and ensure officers and colleagues were able to access and use them effectively. The Committee were therefore assured that this was an ongoing piece of work.

Pay increase - Clarification was sought as to whether the additional cost would be funded through an increased overspend or through savings elsewhere, when the budgetary impact of increasing the pay award to 3.4%, could add approximately £0.5m to costs at a time when a £25m overspend was forecast. In response the Chief Organisational Culture Officer advised that the Council was currently in the process of its third quarter budget forecasting, and that the final financial impact had not yet been determined. Detailed discussions were ongoing across Directorates, Management Team and Portfolio Holders to identify opportunities to reduce the forecast overspend and consider potential savings. Recruitment and retention challenges across a number of key roles remained a significant consideration, and maintaining competitive pay was important to support workforce stability and delivery of the Council Plan.

LGR - It was queried whether modelling had been undertaken on potential workforce loss, recruitment challenges and associated cost or savings implications in the lead-up to Local Government Reorganisation (LGR).

The Chief Organisational Culture Officer advised that in preparation for LGR, a dedicated people workstream was validating establishment data to support forecasting, succession planning and risk assessment. This work was at an early stage and would continue to develop. Further information would be reported to the Committee at an appropriate stage.

NJC - In relation to NJC pay, it was noted that although not part of NJC, officers continued to monitor developments and engage in NJC webinars and were aware of the negotiations on pay deals. Officers continued to monitor developments to ensure the Council did not fall significantly out of alignment.

In relation to pay scale alignment in the context of the LGR, it was advised that pay arrangements across neighbouring North Kent councils varied, with some operating on local pay and others under NJC. The forecasting work with the trade unions would give an understanding of the drift and what that might look like. It would also assist with understanding the level of risk and informing decisions on future harmonisation, including whether a return to NJC would be appropriate.

Lower income groups – In relation to the diversity impact assessment and whether the pay proposals would have an adverse impact on low?income groups, the Chief Organisational Culture Officer explained that, unlike previous years where only cost?of?living uplifts were applied, the current pay framework allowed for progression within pay bands alongside the cost?of?living increase. She was satisfied from early evidence that people were not being penalised at the lower grades. A full evaluation would be carried out, and the impact would be monitored, including a full equality evaluation covering grade distribution as well as age, gender and other protected characteristics.

Professional fees – In response to a question as to whether paying social worker’s registration fees would help with retention, the Chief Organisational Culture Officer advised that there were many other professional groups across the council who incurred fees which would also need to be considered. The proposal has not been ruled out, but further time was required to ensure any approach was fair, consistent, and affordable. Any future policy would be subject to consultation and reported back to the Committee.

During the discussion, the Chairperson supported the suggestion made by another Member, that the recommendations within the report be amended to reflect inflation rather than stipulate a figure. This was due to Medway Council employees having fallen behind on pay for a number of years, contributing to ongoing recruitment and retention challenges. Staff should be paid competitively, and the proposed pay approach was reasonable and balanced.

Decision:

The Employment Matters Committee agreed to recommend to Full Council to agree:

a)              an increase for all staff on MedPay terms and conditions, in line with inflation, which included those on MedPay Performance, Progression Pay Scheme as well as those who were on the legacy scheme.

b)              to not return to National Joint Council (NJC) pay scales currently but keep negotiations open on this matter and do a joint piece of work on impact and cost assumptions.