Item 07 - Variation to Pay Preservation
West Dunbartonshire Council · 5 February 2025
Back to Corporate Services Committee — 5 February 2025 and its agenda
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WEST DUNBARTONSHIRE COUNCIL Report by Chief Officer – People & Technology Corporate Services Committee – 5 February 2025 ___________________________________________________________________ Subject: Variation to pay preservation 1. Purpose 1.1 The purpose of this report is to present options to reduce the pay preservation period and consequential costs for the Council. 2. Recommendations 2.1 Note the findings of the analysis and approve option 2 to reduce the pay preservation period to 6 months. 3. Background 3.1 The Council currently protects eligible employees' contractual pay for up to 12 months on a cash-conserved basis, subject to satisfying specific criteria as set out in paragraphs 18.1-18.4 of the SWITCH Policy (attached as Appendix 1). 3.2 Data covering a 7-year period (2018/19 to 2023/24) was analysed to assess the potential financial benefit of reducing this period. Set out in this report are options to reduce the level of pay preservation to 9, 6, 3 months or remove altogether. 4. Main Issues 4.1 The Council faces an increased likelihood of pay preservation costs due to reduced opportunities to redeploy displaced employees at their substantive grade because of budgetary pressures and restructuring. 4.2 Analysis of redeployment in 2023/24 revealed 139 employees were successfully redeployed, none requiring pay preservation. However, this is anticipated to change as it becomes increasingly challenging to match employees as availability of equivalent roles diminishes. 4.3 A 7-year period was selected to give a broad and representative sample as numbers fluctuate annually depending on service changes/restructures. The figures have also been modelled on an average number of employees requiring pay preservation, 15 individuals with an average protection cost of £12 per day. ITEM 7
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4.4 However, considering the unusually high number of displaced employees last year, and assuming the previous average cost per day £12, the range of days of protection (65-261), the resulting cost avoidance is considerably higher at £108,000-£435,000. While historically, the average number of employees has been low, this is likely change given recent experiences and levels of displacement, so it is important to illustrate this for completeness. If the pay protection period is not amended, there would be no cost avoidance. 4.5 The assessment identified four options for change. The potential cost avoidance is shown for each based upon historic average [1] and last years displaced employee figure [2]: Option 1: Reduce by 3 months to 9 months [1] estimated range of between £11,745 and [2] £108,420 per annum cost avoidance. Option 2: Reduce by 6 months to 6 months [1] estimated range of between £23,490 and [2] £216,840 per annum cost avoidance. Option 3: Reduce by 9 months to 3 months [1] estimated range of between £35,235 and [2] £325,260 per annum cost avoidance. Option 4: Remove 12 months entirely [1] estimated range of between £46,980 and [2] £435,348 per annum cost avoidance. 4.6 While actual cost avoidance depends on future numbers of eligible employees, the data showed that 67% of those impacted were women, compared to a workforce demographic of 73% female and 27% male. Therefore historically, a disproportionate number of men benefited from the protection. 4.7 As set out in paragraph 4.1, the increase in displaced employees can already be seen. To provide context, on 1 April 2023 there were 30 employees on the SWITCH register with a further 109 people added through the year to 31 March 2024. This represents a significant increase from 2022/23, albeit all were matched to roles at the substantive grade therefore no pay preservation was applicable. Despite this success, it is unlikely to be sustainable due to the limited opportunities available for redeployment. 4.8 Any pay preservation offering should be considered in the context of financial prudence and best value, employee retention and morale and service continuity. The recommended option is to reduce the current offering by 6 months to a maximum 6-month period. This would provide a more sustainable level of protection while recognising the financial environment.
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5. People Implications 5.1 The changes may impact employee morale and productivity, necessitating robust engagement and communication with trade unions and employees. 5.2 No direct impact on FTE is anticipated other than the reduction in base pay where redeployment to the same grade via the SWITCH policy is not achievable. 6. Financial and Procurement Implications 6.1 Depending on the chosen option, cost avoidance is estimated to range from £11,000 to £47,000 up to £108,000-£435,000 annually (dependent on numbers displaced). 6.2 The cost avoidance element is calculated based on the model below: Options: Pay protection Days Days Cost avoided Average cost per day Average no. of employee p.a. Total cost avoidance Current (12 months) 261 0 £12 15-139 £0 Option 1 - 9 months 196 65 £12 15-139 £11,745 - £108,420 Option 2 - 6 months 131 131 £12 15-139 £23,490 - £216,840 Option 3 - 3 months 65 196 £12 15-139 £35,235 - £325,260 Option 4 - NIL 0 261 £12 15-139 £46,980 - £435,348 7 Risk Analysis 7.1 The risks associated with the proposed changes include: Employee relations - Potential adverse impacts on morale and turnover. Service delivery - Risk of reduced productivity due to policy changes. Financial sustainability – retention of provision beyond budget. Market comparison – retention of a provision that is beyond that offered by other public bodies and therefore may not represent best value. 7.2 Three of the four options retain a level of pay preservation, unlike the position in some councils where it has been removed entirely.
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8. Equalities Impact Assessment (EIA) 8.1 A Equality Impact Assessment (EIA No. 1039) highlighted that the proposed changes may disproportionately impact women, who account for most of the workforce and therefore potentially eligible for pay preservation. 8.2 However, the data shows that a disproportionate number of men benefited from pay preservation and this may be due, in part, to highly female populated occupations being subject to protections on the basis of statutory resource levels. 9. Consultation 9.1 The Trade Unions were advised of the option under consideration at the Convenor meeting on 17 December 2024 and the report was shared at the meeting on 21 January 2025. 9.2 Legal compliance and consultation requirements, as the proposed changes fall under the SWITCH Policy and Organisational Change Procedure, will be adhered to. 10. Strategic Assessment 10.1 This proposal aligns with the Council’s strategic objective of delivering efficient and cost-effective services, contributing to its priority of being a “continuously improving Council delivering best value.” Victoria Rogers Chief Officer People & Technology Date: 15 January 2025 Person to contact: Arun Menon, Business Support Manager, Church St, Dumbarton. Tel: 07772593317 Email: arun.menon@west-dunbarton.gov.uk Appendix: 1. Extract from SWITCH Policy 2. EIA # 1039 Background Papers: None Wards Affected: None