Issue - meetings

To explain the reasons for a recommendation to implement a pay award in line with the National Employers' for Local Government Services final offer effective from 1st April 2026.

Decision

That Cabinet:

Approved an additional budget of:

·         £214,000 from the Local Priorities Reserve to fund the General Fund impact of the proposed pay award impact for 2026/27.

·         £37,000 from the Housing Priorities Reserve to fund the HRA Impact of the proposed pay award impact for 2026/27.

Reasons for the decision

The staff award is a recognition of the hard work and dedication of our employees. It is proposed to back date the pay award to 1 April 2026. A delay in implementation could negatively impact some members of staff.

Other options considered

Not implementing a pay award would have had a significant impact on staff morale, employee relations, staff retention and relations with the Trade Unions.

The Leader of the Council and Cabinet Member for HR and Economic Development introduced the report the sought Cabinets approval of additional budget to implement a pay award in line with the National Employers’ for Local Government Services final offer effective from the 1 April 2026.

RESOLVED:

That Cabinet:

Approved an additional budget of:

·         £214,000 from the Local Priorities Reserve to fund the General Fund impact of the proposed pay award impact for 2026/27.

·         £37,000 from the Housing Priorities Reserve to fund the HRA Impact of the proposed pay award impact for 2026/27.

Reasons for the decision

The staff award is a recognition of the hard work and dedication of our employees. It is proposed to back date the pay award to 1 April 2026. A delay in implementation could negatively impact some members of staff.

Other options considered

Not implementing a pay award would have had a significant impact on staff morale, employee relations, staff retention and relations with the Trade Unions

That Cabinet:

Approved an additional budget of:

·         £214,000 from the Local Priorities Reserve to fund the General Fund impact of the proposed pay award impact for 2026/27.

·         £37,000 from the Housing Priorities Reserve to fund the HRA Impact of the proposed pay award impact for 2026/27.

Reasons for the decision

The staff award is a recognition of the hard work and dedication of our employees. It is proposed to back date the pay award to 1 April 2026. A delay in implementation could negatively impact some members of staff.

Other options considered

Not implementing a pay award would have had a significant impact on staff morale, employee relations, staff retention and relations with the Trade Unions.

The 2026/27 Pay Award was introduced by the Leader of the Council.

South Kesteven had historically implemented the full and final offer from the National Employers for Local Government Services. On 24 March 2026, this was announced as a 3.3% pay increase. Despite not being part of the national consultation process, there was a local agreement to align the pay award to mirror the outcome of national negotiations.

The current budget allocation for the pay award was 3%. The 0.3% shortfall equated to a budgetary impact of £65k on the general fund and £35k on the Housing Revenue Account (HRA) which required additional funding from reserves.

The report also recommended a Real Living Wage increase was applied to grades SK3 – SK7. Requiring £147k from the General Fund and £2k from the HRA. This proposal supported the Council’s previously agreed commitment to paying the Real Living Wage, as endorsed by Full Council.

The National Employers pay offer had not been accepted by the Trade Unions and it was therefore subject to possible change. If this were to happen, SKDC would need, once again, to review budgets and consult with Trade Union

representatives.

During discussions, the following comments were made:

-       It was noted that the current approach of not being part of the national consultation process but mirroring the outcome anyway prevented the possibility of strike action.

-       Were SKDC to await the final outcome of the Trade Union negotiations before implementing the pay award then this would become a financial burden to both the organisation and the employees.

-       Clarity was sought about the job roles receiving pay banding SK3-SK7. Examples included Waste, Cleaning and Operative roles. 

-       It was queried how the proportional differentials between pay grades could be maintained given that grades SK3-SK7 were proposed to receive up to 5.1% in line with the commitment to meet the real living wage. It was confirmed that the differentials would remain unaffected, keeping the pay scales in order. Only those on Pay Scales below SK7 would receive the full 5.1% uplift.

-       It was noted that SKDC were not bound to adhere to Green Book Conditions of Employment.

-       It was confirmed that the Real Living Wage uplift had not been budget for initially as the Trade Unions had not released their offer in time for SKDC’s budget setting process.

It was identified that the table in 1.3 of the report, under the HRA section, £2000 should have been categorised under the Real Living Wage, rather than the Members Allowance. Incorporating this amendment, it was proposed, seconded and AGREED to recommend to Cabinet an additional budget of:

A.    £214,000 from the Local Priorities Reserve to fund the General Fund impact of the proposed pay award impact for 2026/27.

B.    £37,000 from the Housing Priorities Reserve to fund the HRA Impact of the proposed pay award impact for 2026/27.