BBC heads off pay revolt
Unions have won an improved pay offer from the BBC after threatening to strike over the Corporation's opening bid in pay talks.
The new proposals, which were tabled on condition that BECTU, NUJ, and Amicus would advise members to accept them, came at a meeting on June 11.
They include an improved headline pay increase, significant improvements for lower-paid staff, and the deferral of a planned increase in pension contributions for staff.
Management now propose a two-year deal, with 4% payable from August this year, and a further 2% in 2008, and will postpone an increase in pension contributions equal to 1.5% of salary, which was due to take effect in September this year.
Any increase in staff pension contributions will be delayed until September 2008, and will be preceded by discussions with unions about the outcome of a tri-ennial valuation of the scheme's assets, currently being undertaken by pension actuaries.
In a further concession, the BBC agreed that if inflation in April 2008 was above 2%, the unions would be able to "re-open formal dialogue" over pay. However, management insisted that the offer was a two-year deal, and the BBC's limited income from the licence fee - which will rise 3% this year and increases by another 3% in 2008 - would restrict pay increases to an aggregate 6% over the period of the pay settlement.
2007 BBC pay offer
- 2 year deal: 4% now, 2% in 2008
- Increase in pension contributions postponed until 2008
- Low paid gain through £1,000 minimum rise and improved London Weighting
- Talks promised on redundancy and redeployment
A promise that no full-time staff would receive increases of less than £1,000 means that anyone earning less than £25,000 a year will benefit from a cash increase of more than 4% this year.
Many lower-paid staff will also gain from an offer to raise the threshold below which they are entitled to enhanced London Weighting from £22,000 to £25,000, improving the payment for more than 10% of London-based staff.
Basic London Weighting will increase from £3,303 to £3,468 if the offer is accepted, while the enhanced payment goes to £4,000 from £3,686.
To take account of union fears that the BBC's below-inflation licence fee formula might lead to thousands of job cuts, the pay offer contains a commitment from management to enter top-level discussions about redeployment, reskilling, and retraining before the end of the current budget period in March 2008.
These talks would include the 1998 ACAS redundancy notice formula, under which staff are given 5 months warning of redundancy to improve their chances of redeployment.
BECTU's Assistant General Secretary Luke Crawley said: "The BBC's offer is being recommended by the joint unions because we believe that many of our members will get improvements at or above inflation.
"The BBC's decision to postpone the increase in members' pension contributions is also a breakthrough and the further review in April 2008 may mean that it will not be necessary, depending on the health of the scheme. We would urge members to vote in favour of the offer in the consultative ballot."
Inflation figures released today, June 12, show that the Retail Price Index for April fell to 4.3% from a high of 4.8% two months earlier.
BECTU plans to issue consultative ballot papers on Friday June 15, and voting will close on Monday July 2.
Elsewhere in the BBC, members in subsidiary Worldwide are considering an offer of 3.5% plus a range of bonuses in a one-year pay offer, while in another subsidiary BBC Resources, threatened with privatisation this year, representatives are due to meet the company on June 13 to discover whether an earlier two-year offer of 3.5%, followed by 2%, will be improved.
Letter from BBC outlining revised 2007 pay offer
11 June 2007
Dear Luke Crawley
I am writing to confirm the BBC's final offer which the BBC has constructed in light of the current Licence Fee Settlement constraints and taking into account the joint unions claim.
This is a two-year deal conditional upon the unions putting the package to their members on a positive recommendation.
A two year deal of 6% with a standard increase of 4% in 2007/08 and 2% in 2008/09. The BBC is also offering a guaranteed minimum increase of £1000 in the first year of the deal (2007/08).
All associated allowances will also increase by 4% from 1st August 2007 and by a further 2% in August 2008.
The floors and ceilings of grades 2 - 11, UPA 1 and 2, Night pay, Christmas Day, Boxing Day and New Years Day and other protected continuing allowances will increase in line with the standard increases.
The joint unions accept that the current proposal is 4% for August 2007, and 2% for August 2008. Should the April 2008 RPI figure (published in May 2008) be greater than 2% the unions reserve the right to re-open formal dialogue with the BBC. The BBC however has made it clear that this is a two year deal.
We propose to make significant improvements to both rates of London Weighting and to move the salary threshold which determines eligibility for the higher rate of London Weighting.
The higher rate of London Weighting (currently £3,686) will increase by 8.5% from 1st August 2007 and by a further 2% from 1st August 2008. The lower rate of London Weighting (currently £3,303) will increase by 5% from 1st August 2007 and by a further 2% from 1st August 2008.
Currently staff earning under £22,000 receive the higher rate of London Weighting. As part of this two year deal this' threshold' would move to £25,000, thereby increasing the number of London staff who would benefit from the higher rate of London Weighting.
We will all recall that member contributions were planned to increase from 6% of pensionable salaries to 7.5% for Old and New Benefits members of the Scheme from 1 April 2007 and a possible further increase of up to 1.5% to 9% in light of the 2007 valuation. We agreed, having listened to feedback as part of the consultation process in 2006, to a delay increasing member contributions to 7.5% until 1 September 2007. This was to allow members more time to better plan for the increase.
At this moment the BBC proposes to offer a further deferral of the increase in member contributions from 6% to 7.5% until 1 September 2008. After April 2008, once the triennial pension scheme valuation results have been received and reviewed by the Scheme trustees and the BBC, and we have understood the trends and impact of the valuation will have on both the BBC's finances and its members, management with the joint unions will review the decision as to whether to implement the increase to 7.5%, or whether to leave employee contributions at 6%.
The BBC's response to the other elements within the Joint Unions' claim is as follows.
No deterioration in the final salary pension scheme
The changes announced last year were and remain necessary for the BBC Pension Scheme to remain secure and affordable.
As you know the Trustees brought forward the date of the next actuarial valuation to 1 April 2007. It would be foolish to give any assurances about changes to the Scheme ahead of the results of the valuation. Obviously, if life expectancy continues to improve beyond our expectations, or investment prospects and other financial risks worsen, increasing costs further, then nothing can be ruled out. The increase in the normal pension age from 60 to 65 for Old and New Benefits members from 2016 will be reviewed in the light of the valuation results.
That said, the BBC is intent on generally maintaining the current arrangements for as long as it can afford to do so.
Reopen the final salary pension scheme
As we confirmed in our meeting of the 22nd May, the final salary section of the Pension Scheme is now closed to new entrants and will not be re-opened.
We believe as we said last year that the Career Average Benefits (CAB) provides a valuable package of benefits and a defined income in retirement - it is a defined benefit scheme. It is a key element of the BBC's reward package going forward.
Any accrued pension for members of [the CAB] should be increased by the amount of the pay increase
The BBC and the Scheme Trustees are under an obligation under the Scheme rules at the end of the each Scheme year, to jointly consider increasing each block of pension for all active and deferred Career Average Benefits (CAB) members in line with price inflation. Increases are discretionary.
The BBC will propose to the Scheme Trustees that the revaluation rate in both 2008 and 2009 should be based on the preceding December RPI. This is consistent with the RPI figure used by the Scheme in calculating increases to pensions in payment.
The BBC confirms that it remains our intention to seek to increase the revaluation rate by RPI unless there are exceptional economic reasons not to do so.
The BBC's annual leave entitlement falls into the upper quartile of the distribution of basic annual leave days, for both public sector and across 'all industries'.
The cost of a week of annual leave is approx 2% of basic annual salary plus any continuing allowances. Alongside the fact that we believe our annual leave entitlement is fair, we simply cannot afford an increase of one week.
Salary Progression and ERR
It is our intention that this should be considered as part of our Reward discussions which are to be convened once pay talks are completed.
The BBC is aiming to achieve a reduction in work-related sickness absence by 2010, in order to comply with Health & Safety Executive targets. As a first step towards this we need to improve consistency and accuracy of sickness absence recording.
We are in the process of reviewing the way we record sickness absence and wrote to you about the pilot currently being undertaken in the Professional Services area.
We think the questions of sickness absence and salary payment during sickness absence are greater than just a brief discussion during these Annual Pay Round talks.
We confirm that we will take this topic out of the annual round and review the Agreed Statement at NJC level once we have had the opportunity to see how the new recording process is working.
Executive Board and Senior Managers (SMs).
The unions do not have negotiating rights for these groups and therefore it is not appropriate for the BBC to comment. However, the unions' views have been noted.
The BBC is currently planning budgets in the context of a tough licence fee settlement. We expect to be in discussions with the trade unions this autumn regarding the impact of those plans on staff and following their approval by the BBC Trust.
Discussions around redeployment, reskilling and retraining will be most appropriate in the context of those plans.
The BBC therefore agrees to discussions with the trade unions on the ACAS redeployment agreement within the context of the autumn business plans, in advance of the March 31st 2008 end date of the current agreement.
Recognising the importance of reward we have invited the trade unions to participate in joint working groups to discuss key elements of the reward agenda. These joint working groups will be subject to agreement on terms of reference.
This offer is subject to agreement. If for whatever reason agreement is not possible, the BBC reserves the right to withdraw it in whole or in part.
This letter has been sent to the NUJ and Amicus.
Employee Relations and People Strategy Director
Amended 12 June 2007