What will the Government’s employment reforms mean for our local government workforce?

'Change' was the slogan of the Labour Party election campaign, and their manifesto had an eye-watering 350 pledges.

The new Government’s plans for economic reform are broad and there is barely an element of the employment relationship that isn’t in scope in what is being called the biggest upgrade of workers’ rights in a generation. 

The aim is to modernise the UK’s employment rights framework and respond to the changing world of work. To 'rebalance' the relationship between worker and employer.

It’s an ambitious agenda with an underlying but explicit mission to kickstart economic growth. 

The 'Make Work Pay' set of proposals was an explicit priority in the manifesto, with legislation promised in the first 100 days.

Sure enough, at around day 98, 150 pages of, not entirely perfectly drafted, legislation was launched on Parliament for its first reading.

Monday this week, while we were all packing to come up here, the Bill had its second reading and Government launched a major consultation plan with four consultations on some of the key elements of the Bill all with six-week consultations to take place while the Bill is going through the Parliamentary process.

After a decade of what one might call a 'light touch' approach to consultation; we now have an equal but different challenge – more consultation than there are hours in the day.

So, what does this mean for employers?

New and increased regulation, higher costs, and more involvement with trade unions. 

A few of the more dramatic headlines in recent months might make you want to bolt for the door on hearing this, but please be assured that many of the key changes are things we in local government have been on a path to delivering for some years. 

You know that we are facing significant challenges in keeping and developing our workforce in local government. 

94 per cent councils report difficulties in recruiting and retaining staff and there’s a strong suspicion that the six per cent ticked the wrong box.

This is caused by a range of factors, including financial pressures, an ageing workforce, recruitment difficulties especially in attracting younger workers, and pay competition across professions and sectors. 

On the face of it, many of the Government’s plans will support us to tackle our workforce capacity challenges by focussing on providing job security, treating workers fairly and paying a decent wage. 

These are core values underpinning employment in local government. 

So, what are the main changes we can expect?

We’re going to see the introduction of more basic rights from day one of employment on things such as parental leave, statutory sick pay and protection from unfair dismissal. 

Equality at work will be firmly in the spotlight once again and beyond the announcements in the Employment Rights Bill we expect to see a full Equalities Bill in the next 12 months. 

For the new Government, stability, productivity and growth in a modern economy goes hand-in-hand with equality of opportunity and inclusive treatment. 

Amongst other things, we will see new duties for employers to have gender pay gap action plans, to produce ethnicity and disability pay gap reports, and to show how you are supporting employees with menopause symptoms to remain active at work. 

(And I know that you will all be following the LGA Workforce Twitter or X account and will have seen us celebrating World Menopause Day and sharing our web resources for you to be Menopause Friendly Employers!)

There is to be more support for disabled people and for people with long-term conditions to enter and stay in work, together with a range of more family friendly policies. 

And our approach to outsourcing will see some change with the potential return of the two-tier code that limits the differences in pay and terms and conditions between directly employed and outsourced staff.

Another key part of the Government’s plan is to improve low paid work. 

The Government has already instructed the Low Pay Commission to link the National Living Wage to the cost of living. 

Even without doing so, the Low Pay Commission has notably increased its forecasts for the Living Wage for the coming months and years.

We don’t want to be a low pay sector; however, we are the lowest paying employer in the public sector, and as it is, we are barely keeping ahead of the National Living Wage.

The pay agreement for April 2024 pay has literally only just been reached, a mere 24 hours ago, and we may well find that when the Chancellor gives her Budget speech in the next week or so, our bottom rate of pay is again perilously close to the legal minimum.

Meanwhile other parts of the public sector have had fully funded settlements for considerably more staff than has been possible in local government.

We will continue to be clear with the Government that delivering genuine change to support our communities with a skilled and motivated workforce will require putting actual resources on the table. 

If funding is the substance, over which we wait to see if the new government brings change; on style, they certainly do.

The LGA is experienced at sectoral collective bargaining and wrangling the most disparate of employers with more than 4,000 employers coming under the remit of the local government services’ collective agreements. 

Altogether we manage thirteen national collective bargaining units and are the biggest employer association in the country.

This may come in handy as the government intends to embark on a significant expansion of national collective bargaining with the reinstatement of the Schools Support Staff Negotiating Body and the introduction of sectoral collective bargaining in adult social care.

The Government says sectoral collective bargaining in social care will “empower workers, trade unions and employers to negotiate fair pay, terms and conditions and training standards”. 

While we are pleased that the issues relating to pay and terms and conditions for the adult social care workforce is finally getting attention, we are still waiting to see what that looks like. 

And crucially how it will be paid for.

Turning to education staff, the restoration of the SSSNB after a 15-year hiatus may not seem particularly dramatic. 

At the moment, the majority of school support staff are covered by the same negotiating body as Green Book council workers. 

They are part of traditional national collective bargaining between employers and trade unions.

The SSSNB will take hundreds of thousands of support staff out of national collective bargaining and transfer then into a DfE orchestrated negotiating body that will be tasked with establishing national terms and conditions, training, career progression routes, and fair pay rates.

Again, there is a question around how all this is funded, but also what it means for those who remain on Green Book terms, particularly when we have an agreement, and an urgent need, to reform the local government pay spine.

One final key change I’d like you to know about is the shift in trade union regulation that is also planned. 

The Employment Rights Bill includes a range of measures to strengthen trade union rights, increase trade union membership and improve the ability of unions to operate in our workplaces. 

Much of this will bring other sectors up to the level of local government where trade union recognition and engagement is the norm not the exception.

But the changes to industrial action provisions could be significant.

The Bill proposes a repeal of the Trade Union Act 2016 and with it the thresholds that have generally prevented unions from taking national industrial action across the sector.

Government will consult on a new framework, but it is clear that the intention is to change the balance in industrial relations.

Again, the question will need to be asked, if, as is generally accepted by the local government unions, recent pay offers from the employers have been at the limit of affordability for councils, will central government provide sufficient funding to enable employers to make offers in the next few years that:

1. Keep local government workers clear of the national living wage
2. Enable local authorities to recruit and retain the professional expertise needed to deliver services, and 
3. Be sufficient to prevent industrial action in the sector?

On all of this, we are on the edge of our seats.

In the coming months and years, you will be navigating through an era of change that will bring a mix of uncertainty and opportunity. 

Foresight and agility will be key. 

It might sound daunting but as a sector we are good at leading and adapting to change, at embracing flexibility and working collaboratively, so I am sure we will be able to thrive in this new landscape. 

The LGA will work as a constructive partner and a critical friend on your behalf to help shape workable policy solutions to the changes and, as always, we will keep you up to date with news, advice and insight. 

Thank you for listening and I look forward to hearing your thoughts on what has been announced.