Town hall employers are ‘polarised' on whether to extend the local government pay freeze into a third year, senior sources involved in the negotiations have told The MJ.

According to one leading figure, the sector-wide consensus on a pay freeze, which has prevailed for the past two years, is unlikely to hold over the course of this month's regional briefings to discuss the pay claim lodged by unions on 28 October. 

Unison, Unite and GMB are seeking a substantial pay increase for over one million local government staff they represent, arguing that rising living costs have wiped-out pay gains made since 1998.

Employers sources told The MJ that strongly held, but differing, views on the response to the unions' claim are set to become further polarised - making the decision of the employer-union National Joint Council (NJC) much harder to reach.

Adding to the complexity, the sources said initial soundings indicate there is no obvious split along geographical or political lines between those councils happy to enter a third year of pay freeze to preserve jobs and services, and a group who believe a pay increase of some form must now be offered to support staff on low incomes.

One employers source said: ‘It's a real Catch-22 situation this year. 

‘On one hand it's possible to foresee a situation where failure to deliver a pay rise may cause the unions to walk away. On the other, you can foresee where a national pay bargain is agreed, local government employers might walk away.'

Speaking to The MJ in a personal capacity, Sir Steve Bullock, mayor of Lewisham LBC said: ‘I think that as employers we need to think seriously about the implications of a third year of an across-the-board freeze.'

‘Local government employees have made a greater contribution to dealing with the deficit than the rest of the public sector, and there are issues around fairness that town hall employers who seek to be good employers must face.'

Sir Steve also warned local government risked storing up problems for the future if council staff pay deals lagged a long way behind those reached across other parts of the public sector.

Unison's head of local government, Heather Wakefield, told The MJ the economic situation facing staff had become ‘nothing short of scandalous', with many members facing poverty while delivering important local government services.

‘We feel that this year there needs to be some sign from local government employers that they realise how far council workers have fallen behind.'

Ms Wakefield said workers had already lost almost 12% of pay due to inflation and claimed many had been forced to build-up significant debts, take second jobs or sell possessions to ease financial pressures.