- Proposed reductions to staff salaries should be rejected
- Barnet Homes should either waive the outstanding amount from the £1 million loaned to YCB last year or extend the payment period to 10 years
- Barnet Council should be re-approached to re-establish payment in advance for a percentage of the services to mitigate the effect of the transition to payment in arrears
- Further avenues of generating new business and income should continue to be explored.
1 GMB believe that the £400k that this proposal aims to save is needed in order to repay the £1m plus interest borrowed from Barnet Homes, whether that is directly or indirectly…..We believe that our members are being asked to pay for a shift from payment up front to payment in arrears. This is unacceptable and we believe that Barnet Homes, the major stakeholder within The Barnet Group, should bear the cost of this shift until YCB is in a stronger position to repay the loan.
YCB response: The Barnet Homes loan was required to help fund the transition in the way YCB was being paid (from payment up front in year 1 to payment in arrears in year 2) which resulted in a cash flow issue. This situation was totally anticipated and planned for and taking a loan from Barnet Homes afforded much more favourable interest rates than commercial banks. This is therefore a ‘catch up’ position rather than an actual deficit and the loan will be repaid within the payment period agreed at the outset.
The current £400k deficit relates exclusively to actual income and expenditure (expenditure exceeding income) and is therefore quite separate from the loan arrangement. Even if the loan repayments were re-negotiated this level of savings would still be required.
2 Alternatively Barnet Council could be approached, as GMB suggested in the previous consultation, to mitigate the impact of this shift by phasing in the payment inarrears over a longer time-scale.
YCB response: Payment in arrears has now been in place for over 12 months and moving back to payment in advance is not feasible and Your Choice would be treated more favourably than other providers. As per our response to point 1 the loan does not impact the savings required and moving to payment in advance would not affect the savings required either.
3 GMB feel that there is also an equalities issue related to the attack on Terms and Conditions of this workforce. This group of workers is predominantly female and is being treated less favourably than the rest of The Barnet Group as Barnet Homes staff are not having their terms and conditions cut or facing a 9.5% pay cut.
YCB response: We do not believe that the pay arrangements we propose breach equality law. In accordance with our legal responsibilities under the Equality Act 2010 we have assessed the impact of these changes on staff by undertaking an Impact Assessment and Equality Analysis which was sent to GMB on 5 March 2014. This analysis shows that the changes being proposed and recommended will not have a disproportionate effect on any individuals having ‘protected characteristics’ as defined in the Act, and any factors identified have been mitigated so far as reasonably possible.
The Equality Act 2010 (EqA 2010) implements the principle that men and women should receive equal pay for equal work. However, there are often situations where men and women in comparable jobs, working for the same, or associated employers, are paid different amounts. Provided the employer can show that any differences in pay are as a result of factors that are not related to a person’s sex then this will not be a breach of the law. This is called the ‘genuine market factor’ in the Act. Pay benchmarking, which takes into account location and market forces (both of which can be material factor defences), is often cited as a reason for pay differences that are not sex discriminatory. Financial and budgetary constraints are also justifiable as a material factor defence as are pay protection arrangements.
4 This proposal recommends moving to a spot grade for staff however it is not clear to staff before implementation what that spot grade is and for staff on lower spinal points they have further uncertainty over whether or not they will remain on a salary lower than their peers…….GMB are unclear on what staff are being asked to accept. Staff are unable to accept a reduction in salary as there is no certainty that the Board will not come back in 6 months or 2 years to make a further reduction.
YCB response: The details of the new pay rates have been explained to YCB staff in personal letters of 20 March 2014 setting out in full their confidential individual circumstances and options. The reason for this proposal is that YCB needs to make savings to offset a current deficit of £400,000 plus build in a small contingency against future cuts in funding (see point 1 above).
The YCB Board decisions agreed on 19 March 2014 are as follows:
- A reduction in current salaries of 9.5% for YCB staff
- No other changes to terms and conditions
- Future salary increases will be determined based on benchmarking every 2 years and affordability. Increases would only be due if the business can afford to increase salary costs which will depend upon the financial position at that time
- There will be no spinal points or salary ranges and in their place will be spot salaries.
5 Further avenues of generating new business and income should continue to be explored.
YCB response: As detailed in the paper ‘Growth for Your Choice Barnet 2014’ supplied to GMB in February 2014 growth underpins YCB’s strategy for the future. Making these changes now will ensure that the business is in a financially viable position from which we can develop and grow our services to safeguard the long term future of the organisation.