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Internal News - 14 October 2008

University pay award – October 2008

Under the terms of the 2006-09 national (JNCHES) pay agreement, the pay increase due on 1 October 2008 is set at 2.5 per cent or the September Retail Price Index (RPI) figure, whichever is the greater. The September RPI figure has just been released and is 5.0 per cent.

We will be implementing this 5.0 per cent national pay award. However, the September RPI figure has not been published in time for processing in the October payroll. Pay increases will appear in the November payroll and will be backdated to 1 October 2008.

The 5.0 per cent RPI figure is considerably higher than the HE sector was expecting when the national pay agreement was reached in 2006. As recently as April this year the UK Treasury was predicting an RPI of only 2.9 per cent.

We need to understand that this is an exceptional pay award, resulting from unprecedented volatility in the financial markets and rising food and energy prices in the global economy. The University’s estimates for 2008-09, approved by Council on 3 July 2008, include provision for a pay award based on an estimated September RPI of 4.0 per cent. The higher salary expenditure will have implications for investment and other financial settlements this year.

A pay award of this size also raises significant questions of affordability for future pay awards in the HE sector, particularly when set alongside rising energy costs and anticipated changes to employer contributions to pension schemes.

Under the JNCHES pay agreement, universities that find they cannot afford the current October 2008 pay increase can defer implementation for 11 months in order to avoid job losses. Some institutions are likely to invoke this deferral clause. Clearly, we are not in this position and we will seek to ensure that staff can continue to enjoy excellent pay and conditions that are sustainable, but this has to be balanced against job security and the financial stability of the University.

JNCHES is the (former) Joint Negotiating Committee of Higher Education Staff (now superseded by New JNCHES). It comprises UCEA (University and Colleges Employers Association) and trade unions representing HE staff.