John Swinney branded ‘Osborne in a kilt’ by unions after budget

THE prospect of a wave of public-sector strikes in Scotland moved closer last night after John Swinney followed George Osborne by handing out below-inflation pay rises to thousands of workers.

The finance secretary confirmed civil servants and NHS staff would have to accept another year of real-terms pay cuts, as he unveiled his spending plans to the Scottish Parliament.

Ministers insist they have little option but to propose a 1 per cent deal for 2013-14, the same as the UK government’s plans, given a spending squeeze on the Scottish Government’s £28 billion departmental budgets next year.

But unions accused Mr Swinney of “slavishly” following the Tory-Lib Dem coalition’s austerity plans, saying he could have juggled his spending priorities to give public-sector workers in Scotland a better deal. One said his proposals made him look like “George Osborne in a kilt”.

The 1 per cent pay deal is set to be a focal point for an anti-austerity march organised by the unions next month in Glasgow and London. Union leaders said strike action would then be considered in Scotland, as in the rest of the UK.

• Read Eddie Barnes’ budget analysis here

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The leader of Unison, Dave Prentis, has already warned that, if negotiations to boost pay and conditions are not successful, there will be “co-ordinated action”.

Mr Swinney’s pay deal will apply directly to civil servants and some NHS staff. Local government chiefs, who set pay for teachers and other council workers, said they were to begin talks on their 2013 pay package, with no guarantee even the 1 per cent deal could be matched.

The Scottish Government deal means a third year of falling salaries for many public sector staff, who have already endured a two-year freeze imposed by ministers and local government chiefs as they seek to limit redundancies and keep costs down in the face of flatlining budgets.

Officials estimate the public sector pay bill represents 60 per cent of all the Scottish Government’s departmental spending, amounting to more than £15bn.

So any increase eats a huge hole in the government’s spending programme. Independent analysis of the Scottish Government’s budget in 2010 concluded that a 2 per cent pay rise this year would cost Mr Swinney a further £280m.

He confirmed yesterday that only 1 per cent could be afforded but sought to sugar the pill by guaranteeing he would commit to the £7.50-an-hour living wage for the rest of this parliament. Furthermore, anyone earning less than £21,000 will receive a basic pay rise of at least £250.

Mr Swinney also said high earners in the public sector would continue to have a total freeze on their pay.

He said: “We believe the pay policy we have put in place for 2013-14 responds appropriately to the current financial environment, offers a fair and affordable pay framework for public bodies and their staff, and will help all of us continue to work towards the Scottish Government’s purpose of increasing sustainable economic growth.”

The extra help for low-paid workers was given short shrift by union leaders. They said it would probably affect only about 15,000 people out of more than 500,000 who work in Scotland’s public sector.

Lynn Henderson, the PCS union’s Scottish secretary said: “It is George Osborne in a kilt. The 1 per cent cap on pay increases announced by Mr Swinney is the same 1 per cent cap announced by George Osborne with a tartan cover over it.

“This is woefully inadequate to redress the lost income and hardship our members have suffered after two years of a pay freeze. It is time for Mr Swinney to pay up and time for the Scottish Parliament to utilise the powers it has to invest in the economy and protect public services, not rob Peter to pay Paul.”

Scottish Trades Union Congress general secretary Grahame Smith said: “The STUC has consistently acknowledged that the UK coalition government’s dangerously irresponsible economic strategy has placed the Scottish Government in a very difficult position and that Mr Swinney has endeavoured throughout the crisis to do what he can to stimulate the Scottish economy.

“However, it is disappointing that Mr Swinney has followed George Osborne’s public sector pay policy almost to the letter. A third year of significant real-terms wage cuts for hundreds of thousands of workers puts Mr Swinney’s attempts at stimulus into perspective.”

Unions described the 1 per cent deal as bad economics, warning it would limit people’s spending power for a third year running.

Attention will now turn to negotiations between unions and the Scottish Government prior to the budget being finalised early next year. For thousands of local government staff, their pay deal will be worked out in negotiations with council leaders over the coming weeks.

Local government chiefs have already said they cannot meet union demands, and yesterday, Mr Swinney confirmed councils were to receive a broadly flat budget next year, despite having to find extra cash to meet the rising cost of social care.

Mike Kirby, Unison’s Scottish secretary, said: “Unless local government is funded to pay even this limited increase, there is no guarantee the largest group of public sector workers, in local government, will receive an increase.”

Kevin Keenan, finance spokesman for council umbrella group Cosla, said: “There are no surprises in what the Cabinet secretary presented to parliament, but it has to be accepted that there are challenges in there, challenges that will need to be faced by all 32 councils in Scotland.”

On the prospect of strikes, Unison’s Scottish organiser, Dave Watson, said: “The local government unions will now consult and then come to a judgment about what they are going to do.”

At the TUC earlier this month, the general council backed a call to consider a general strike. First, however, union chiefs are preparing for rallies in London and Glasgow on 20 October when they will protest against the impact of the spending squeeze.

They say the rally will act as a “launch pad” for strike action if there is no movement from central and local government.

Meanwhile, one of Scotland’s teaching unions warned the pay deal would have an impact in the classroom, with teachers increasingly frustrated that their pay was failing to keep up with rising living costs. A recent poll of teachers found two-thirds felt the pay freeze was unfair.

Chris Keates, general secretary of the NASUWT in Scotland, said: “It is deeply disappointing that the Scottish Government has chosen to follow the coalition’s flawed economic policies by imposing another year of pay freeze on public sector workers.

“Teachers and other public servants are being made to foot the bill for the economic downturn at a time when their pensions are also being attacked and the cost of living is accelerating.”