Wallace new Mark Wallace of the Taxpayers Alliance says Unison's pay demands would mean service cuts and higher unemployment as well as Council Tax hikes. They should be resisted and national pay bargaining ended.

This week will see Unison lodge its demands for Town Hall pay rises with the Department of Communities and Local Governmnent. And thus a farce will undoubtedly ensue.

Great play has been made by the Unions of 12,000 or so job losses that have taken place in local government this year, out of a total payroll of 1.5 million. The reality is that council staff are still far better protected from the recession than any part of the private sector, but Unison will undoubtedly deny any suggestion that they should share any of the pain being suffered by taxpayers.

The Government have, finally, begun to talk of the need for pay restraint, but severe doubts naturally hang over their willingness or ability to fight on the issue.

By rights there should be at least a pay freeze, and for many parts of local government – such as middle management, which has grown 11-fold in just over a decade – there is a good case for cuts.

However, as we know the Government have barely any authority over their own MPs, and are very much at the mercy financially and politically of the Trade Unions. 70 per cent of Labour’s donations now come from the Unions, and Unison was the second largest donor in 2007-08, giving £5.3 million.

Not only will the financial clout of the unions be on the minds of the Government when negotiating local government pay settlements, Ministers are also unlikely to forgot quite how many votes they will wield in the upcoming Labour leadership election. The worrying possibility arises that taxpayers’ money could be used to buy support in Labour’s internal politicking.

The Trade Unions have traditionally avoided flexing their muscles publicly for fear of alienating the public at large by being publicly seen to bully democratically elected representatives. This week, though, Heather Wakefield, the official who heads up Unison’s local government section, did exactly that in her weekly article in Public Finance. If politicians don’t give her members the pay rises she demands, she said, “I hope they’re not expecting their votes when May 2010 comes around." If they are saying things like that in public, you can imagine what Unison must be saying to Ministers and Government advisors in private.

This is a confused and messy process, which is likely to produce a deeply unstatisfactory result for taxpayers. The reason for that, of course, is that this is yet another aspect of local government finance about which local taxpayers are never consulted.

There is a national pay bargaining scheme in place for local government, which totally undermines the concept of true local government at all. In councils, as in most other public services, wages and the exorbitant pension bills which accompany them, make up a huge proportion of total expenditure.

By removing the right of councils to decide for themselves what is appropriate for their area, their residents and their budget, the Government severely restricts their ability to make meaningful savings.

Indeed, for all the Union rhetoric about pay restraint harming frontline services, it is, in fact, their refusal to accept a pay freeze at the national bargaining stage that forces councils to eat into other budgets. Their hypocrisy extends further – by insisting on increasing the cost of each individual worker, they are effectively guaranteeing that more will be made unemployed.

One remarkable thing about this recession is that in a lot of private companies, staff have being given the choice between pay cuts or redundancies. In many cases they have chosen the pay cuts in order to keep people in work. In local government, that option is denied to workers on the front line by civil servants, Ministers and Union officials that they have never even met, regardless of how much their council may be sympathetic to the idea.

It is fundamentally wrong for council pay settlements to be made en masse by the Department of Communities and Local Government. For a start, they are not accountable to the different people around the country who their decision will affect in a myriad of different ways. Worse, their priorities are blurred by their national relationship with the Unions, other members of the Government and wider pay negotiations in Whitehall and beyond.

The result of this inadequate system is that more and more councils are discussing leaving the scheme and forging separate agreements with their own staff. Those that do this will undoubtedly receive threats of strikes from Union leaders, but it is necessary nonetheless.

The fact that Unison are so opposed to localising pay bargaining is a sign that it really will devolve power to people who need it. National pay bargaining empowers monolithic institutions and a few distant individuals at the expense of councillors, voters and taxpayers. It may serve the few, but it is the many who have to pay the price for it – and they will benefit it is put to a stop.

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