Agenda Item Committee: County Council Meeting Date: 19 March 2015 Lead Councillor/s: Councillor Jenny Antill Local Councillor/s: All Director: Geoff Dobson, Director of Resource Management Assistant Director Sally Marlow, Head of HR or Head of Service: 07921 406796 sally.marlow@suffolk.gov.uk Lynn Wright, Strategic Payroll and Pensions Manager Author: 07733 308574 lynn.wright@suffolk.gov.uk Pay Statement 2015/16 Brief Summary of Report 1. The purpose of this paper is to seek the approval of Council to the proposed Pay Statement 2015/16. Action Recommended 2. That the Pay Statement for 2015/16 is approved. 3. That the Director of Resource Management is authorised to amend the Pay Statement to take account of the pension contributions banding for the Firefighters pension schemes when known. Reason for Recommendation 4. Section 38 (1) of the Localism Act 2011 requires the County Council to produce a Pay Statement for each year. This statement is for the year 2015/16. 5. The Pay Statement: 6. a) must be approved by Council by the end of March each year; b) may be amended during the financial year; c) must be published on the Council’s website; d) must be complied with when setting the terms and conditions of Chief Officer employees. The Pay Statement must include the following information: a) the policy on the level and elements of remuneration for Chief Officers; b) the remuneration of the lowest paid employees; c) the relationship between the remuneration of Chief Officers and other officers; and d) other specific aspects of Chief Officer remuneration, fees and charges and other discretionary payments. 7. Remuneration in this context is defined widely to include pay, charges, fees, allowances, benefits in kind, increases in enhancements of pension entitlements and termination payments. Main Body of Report 8. Suffolk County Council recognises that, in the context of managing scarce public resources, remuneration at all levels needs to be adequate to attract and retain high quality employees dedicated to the service of the public, but at the same time needs to avoid being unnecessarily generous or otherwise excessive. 9. Local authorities are able to determine their own pay structures in order to address local priorities and to compete in the local labour market. 10. The Pay Statement covers the remuneration arrangements for staff from Chief Executive to Senior Manager level. This includes the Chief Executive, Directors, Assistant Directors and Senior Managers. In line with guidance published by the Local Government Association, it does not include information relating to staff in schools. It relates to remuneration levels for staff directly employed by the Council. 11. The management structure and pay levels for staff above £50,000 are regularly updated and published on the Council’s website. 12. The policy for each group is as follows:Chief Executive Officer 13. The Chief Executive is the Council’s Statutory Head of Paid Service (section 4(1) of the Local Government and Housing At 1989) and is paid £155,000 per annum. 14. This salary was set following an external benchmarking exercise to test salary levels both on a local and national basis. This followed a consultation exercise across all political groups within the Council; this salary has not been increased since the current Chief Executive was appointed in 2011. 15. The salary is a “spot salary” which means that it does not attract incremental progression. Under current arrangements, any change to the pay level of the role of Chief Executive needs to be agreed by the Staff Appointments Committee. The Staff Appointments Committee meets on demand, includes one member of the Cabinet and has representation from all political groups. 16. There are no additional bonus, performance, honoraria or ex gratia payments in place for this role. The Chief Executive has been appointed to the post of Returning Officer for the County Council which attracts an allowance equivalent to £17.51 per seat whether contested or not for each election. 17. Other Conditions of Service are as prescribed by the Joint National Council (JNC) for Local Authority Chief Executives national conditions. 18. Guidance from the Department for Communities and Local Government suggests that full Council can be given the opportunity to vote on salary packages of £100,000 or more. The existing approach of using the Staff Appointments Committee and consulting across political groups, enables an efficient and effective approach to recruitment and selection that is representative of councillors’ views. Corporate Directors 19. The salary structure for Directors is set locally through the Staff Appointments Committee and ranges from £98,393 to £126,733. 20. New appointments to this level are on a “spot salary” basis and do not attract incremental progression. 21. With the exception of the Chief Fire Officer’s post, roles are evaluated at Director level through the nationally-recognised Hay job evaluation framework. The Chief Fire Officer’s post is evaluated in accordance with the National Joint Council for Brigade Managers of Local Authority Fire and Rescue Services. 22. In the main, other Conditions of Service are as prescribed by the Joint National Council (JNC) for Local Authority Chief Officers national conditions. The Chief Fire Officer has conditions as set under the National Joint Council for Brigade Managers of Fire and Rescue Services; the Director of Public Health has conditions as set under NHS arrangements in line with the County Council’s obligations under the Transfer of Undertakings (protection of employment) Regulations (TUPE). 23. There are no other additional elements of remuneration in respect of overtime, flexi-time, bank holiday working, stand-by payments, etc. paid to these senior staff on JNC terms as they are expected to undertake duties outside their contractual hours and working patterns without additional payment. Assistant Directors, Senior Managers and equivalent 24. The salary ranges for Assistant Directors and Senior Managers for 2015/16 are as follows: a) Assistant Director - £69,458 - £98,760 b) Senior Manager - £56,393 - £65,687 c) NHS Public Health Medical Consultant grades: £75,249 £101,451; NHS non-Medical Consultant grades: £65,922 – £81,618 d) Deputy Chief Fire Officer : £92,920 ; Assistant Chief Fire Officer £85,109 25. Roles are evaluated through the Hay job evaluation framework, with the exception of those for senior staff within the Fire and Rescue Service and Public Health. The Fire and Rescue Service roles are evaluated in accordance with the National Joint Council for Brigade Managers of Fire and Rescue Services and the Public Health roles are evaluated under the Agenda for Change job evaluation process. 26. Other Conditions of Service are as prescribed both by the Joint National Council (JNC) for Local Authority Chief Officer’s national conditions as well as local arrangements within the Council. Senior staff within the Fire Service have conditions as set under the National Joint Council for Brigade Managers of Fire and Rescue Services: Scheme of Conditions of Service. Salary Structure 27. The salary structure for the rest of the workforce has been determined through the Council’s Single Status Agreement in 2002. There are eight grades ranging from £13,500 to £57,018. 28. All annual salaries and annual allowances are paid pro rata to part time employees based on the hours contracted to work. 29. Apprentices are paid outside of the grading structure and in accordance with the national scheme for Apprentices, with a small enhancement that increases the weekly wage to £100. After one year of service and where the Apprentice is 19, salary can be increased to the National Minimum Wage (age 19 rate), providing that NVQ requirements have been satisfied. 30. For the purposes of the Pay Statement 2015/16, the lowest paid full time equivalent basic pay of £13,500 is used to determine the local definition of ‘lowest paid’. 31. On 1st June 2014 the Council implemented the Living Wage for all directly employed staff in the corporate workforce, and the pay of any Single Status employee who was paid less than the Living Wage was increased to the lowest Spinal Column Point above the Living Wage. The action taken by the County Council means that should any further services be externalised, the current terms and conditions will transfer with the staff including the current pay levels. Schools have been informed of the fact that the Living Wage has been implemented for staff in the corporate workforce and it was suggested to them that Governors may wish to consider this further. 32. The value of salary points is increased as determined by the NJC national pay negotiations. Posts up to and including grade 8 are evaluated using the NJC Job Evaluation Scheme, which is recognised by employers and trades unions nationally. This scheme allows for robust measurement against set criteria resulting in fair and objective evaluations and satisfies equal pay requirements. 33. In recognition that the Council had a savings target of £156M over the four financial years to 2017/18 and a desire to protect front-line services, the Council entered into a collective agreement with UNISON in relation to pay in December 2013. From this agreement, all Single Status and JNC employees’ pay has been frozen at their current Spinal Column Point until the end of the 2017/18 performance year; the provisions of the previous Incremental Progression Scheme have ceased. The Council will review the position prior to the 2018/19 performance year. Pay relationships 34. The idea of publishing the ratio of the pay of an organisation’s top earner to that of its median earner (the person in the middle of all earners) has been recommended in order to support the principles of Fair Pay (Will Hutton 2011) and for transparency. 35. The current pay ratio when measured against the median average is 1:6. This means that the Chief Executive (top earner) earns six times more than the Council’s median earner (for which the rate is £24,184); and when measured against the lowest paid it is 1:11. 36. These multipliers will be monitored each year within the Pay Statement. Allowances, fees and benefits in kind 37. Access to the Council’s Relocation scheme may be granted in certain cases when new starters need to move to the area. This requires authorisation from the Chief Executive and / or Staff Appointments Committee (depending on the post) /Director for all other posts within Directorates. 38. Other allowances and benefits typically follow nationally agreed rates. Locally agreed arrangements are detailed in the Human Resources pages for staff and Councillors. Pay on appointment across the organisation 39. All new external appointments will be made at the lowest Spinal Column Point of the relevant grade, save in exceptional circumstances. The decision as to whether exceptional circumstances exist will be made by the Director of Resource Management in consultation with the Head of HR. Pensions 40. Under Automatic enrolment rules staff, who are between 22 years old and State Pension age and whose earnings exceed the equivalent of £10,000 per annum in any given period of pay will be automatically put into the relevant pension scheme. The Council will pay the relevant employer contribution for the time these individuals are in the scheme. The employee contributions for relevant pensions schemes are detailed below. 41. These are the contribution bands for the local government pension scheme for 2015/16.: Actual Pensionable Pay Up to £13,600 £13,601 - £21,200 £21,201 - £34,400 £34,401 - £43,500 £43,501 - £60,700 £60,701 - £86,000 £86,001 - £101,200 £101,201 - £151,800 £151,801 or more Main Scheme contribution 5.5% 5.8% 6.5% 6.8% 8.5% 9.9% 10.5% 11.4% 12.5% 42. The Local Government Pension Scheme changed from a Final Salary scheme to a Career Average Revalued Earnings scheme on 1st April 2014. All benefits built up before April 2014 are protected in that they will continue to be based on the employees final salary when they leave the scheme. Individuals can opt to pay half contributions for half a pension in the 50/50 scheme and will still receive full ill health and death benefit cover and the Council will continue to contribute the full rate of employers contributions. These terms are determined by the Local Government Pension Scheme. 43. Fire-fighters Pension scheme 1992 Pensionable Pay Up to and including £15,000 More than £15,000 and up to and including £21,210 More than £21,211 and up to and including £30,300 More than £30,301 and up to and including £40,400 More than £40,401 and up to and including £50,500 More than £50,501 and up to and including £60,600 More than £60,601 and up to and including £101,000 More than £101,001 and up to and including £121,200 More than £121,201 2015/16 contribution 11% 12.2% 14.2% 14.7% 15.2% 15.5% 16% 16.5% 17% 44. Fire-fighters Pension Scheme 2006 Pensionable Pay Up to and including £15,000 More than £15,000 and up to and including £21,210 More than £21,211 and up to and including £30,300 More than £30,301 and up to and including £40,400 More than £40,401 and up to and including £50,500 More than £50,501 and up to and including £60,600 More than £60,601 and up to and including £101,000 More than £101,001 and up to and including £121,200 More than £120,201 2015/16 contribution 8.5% 9.4% 10.4% 10.9% 11.2% 11.3% 11.7% 12.1% 12.5% . 45. There is a new Fire-fighters Pension Scheme from 1st April 2015. The scheme is a Career Average Revalued Earnings scheme. Fire-fighters who are members of the 1992 Scheme and were aged 45 or over at 1 st April 2012 are protected from the changes and remain in their current Final Salary scheme. The contribution rates for the Fire-fighters Pension Scheme 2015 are below: Pensionable Pay Up to and including £27,000 More than £27,001 and up to and including £50,000 More than £50,001 and up to and including £142,500 More than £142,500 2015/16 contribution 10.0% 12.2% 13.5% 14.5% 46. Teachers’ Pension Scheme There is a new Teachers’ Pension Scheme from 1st April 2015. The scheme is a Career Average Revalued Earnings scheme. Teachers’ who were within 10 years of their normal pension age at 1st April 2012 are protected from the changes and remain in their current Final Salary scheme. The contribution rates for all members of the Teachers’ Pension Scheme are as follows:Actual Pensionable Pay Up to £25,999 £26,000 to £34,999 £35,000 to £41,499 £41,500 to £54,999 £55,000 to £74,999 £75,000 and above Contribution Rate 7.4% 8.6% 9.6% 10.2% 11.3% 11.7% 47. NHS Pension Scheme There is a new NHS Pension Scheme from 1st April 2015. The scheme is a Career Average Revalued Earnings scheme. NHS Pension Scheme members who are within 10 years of retirement are protected from the changes and remain in their current Final Salary scheme until they retire. The contribution rates for all members of the NHS Pension Scheme will be the same and are as follows:Full-time pensionable pay Up to £15,431.99 £15,432.00 to £21,477.99 £21,478.00 to £26,823.99 £26,824.00 to £47,845.99 £47,846.00 to £70,630.99 £70,631.00 to £111,376.99 £111,377.00 and over Contribution Rate 5% 5.6% 7.1% 9.3% 12.5% 13.5% 14.5% Severance and Termination Arrangements 48. The Council’s approach to statutory and discretionary payments on termination of employment of Chief Officers, prior to reaching normal retirement age, is set out in accordance with regulations 5 and 6 of the Local Government (Early Termination of Employment) (Discretionary Compensation)(England and Wales) Regulations 2006; the Council’s Pension arrangements are in accordance with decisions taken at the County Council meeting on 14 September 2006 (CC06/30) and the Organisational Change Management Policy. 49. Any other payments falling outside of the provisions or the relevant periods of contractual notice shall be subject to a formal decision by the relevant committee or group of Elected Members with delegated authority to approve such payments. 50. The Pay Statement determines that staff who leave the Council for reason of redundancy or with a discretionary payment will not ordinarily be reemployed within the organisation. The purpose of this is to ensure management take all reasonable steps to minimise redundancies, to maximise redeployment opportunities for current staff and to proactively manage people costs. Exceptions to this will be considered by the Head of HR in the following circumstances: Roles which are typically hard to fill. Situations where the individual has been reskilled and is applying for a different role based on these new skills. Where an employee has been made compulsory redundant. If the Head of HR approves the candidate for short listing, a full selection process must be completed. There will be no consideration of the re-employment of any staff graded at JNC level or equivalent. Decision Making 51. Decisions on salary structures are made as follows: a) Decisions relating to the Chief Executive, Designated Officers and Chief Officers’ salaries are approved by Staff Appointments Committee which is a public committee; decisions affecting other staff at a senior level are made by the relevant Director. All papers pertaining to Staff Appointments Committee are available on the County Council website for public scrutiny with the exception of Part 2 papers which are shared with committee members under confidential cover. b) The Constitution defines that the salary and grading structures of all posts below that of Senior Manager level is delegated to the Head of HR, subject to observance of appropriate procedures and rights of appeal. Disclosure 52. This Pay Statement will be published on the Council’s website. Review 53. The Pay Statement will be reviewed for 2016/17. If it is necessary to amend this Pay Statement an appropriate proposal will be made to Council. SOURCES OF FURTHER INFORMATION a) List of Designated Officers under Local Authorities (Standing Orders) (England) Regulations 2001 (‘the Regulations’) b) Published information on staff who earn more than £50,000 http://www.suffolk.gov.uk/your-council/finance/transparency-2/how-yourmoney-is-spent/senior-staff-salaries/ c) Organisational Change Management Policy http://colin.suffolkcc.gov.uk/NR/rdonlyres/4CE28A6C-358A-4ED0-B9BFE6DB93DC2145/0/OrganisationalChangeManagementPolicy.pdf d) Pay Policy Statement 2014/15, 20th March 2014 Agenda Item 10 Suffolk County Council committee papers