Nottinghamshire councils may need to find millions to fund potential £1,925 all-staff pay award

In some cases as much as £1.5m could be added to individual authorities’ pay bills, with all council employees potentially receiving a £1,925 boost.

Two Nottinghamshire councils have called on Whitehall to help fund the rise if it goes ahead and prevent budget pressures.

It follows union calls for either £2,000 or a rise in line with inflation – now standing at 10.1 per cent – to help council workers cope with the cost of living crisis.

The National Employers – the organisation in control of public sector pay – came back with the £1,925 offer and ongoing negotiations will decide whether it is accepted.

If agreed, every member of staff employed by councils would receive the sum regardless of pay bands, working out at a 10.5 per cent rise for the lowest-paid workers.

And it could be backdated to April 1, 2022, putting pressure on councils to find the funding straight away for staff working in their organisations.

Most Nottinghamshire authorities say they are awaiting the result of the ongoing negotiations before confirming how it will impact their finances.

However, both Gedling Council and Ashfield Council have revealed it could add millions to the pay bills of the county’s lower-tier authorities.

A spokeman for Gedling said the pay award will add almost £1m to its own pay bill, despite only budgeting for an increase £420,000.

The authority said it will need to make savings to make up the shortfall unless the Government agrees to financial support.

A council spokesman said: “This would add in excess of £950,000 to our pay bill for which the current budgets only allow for £420,000.

“The shortfall of £530,000 would have to be taken from balances in the short-term and be set as a further efficiency target to be found in the longer term.

“Unless of course, the government agree to make a contribution to each council.”

At Ashfield, the amount potentially added to the pay bill is even higher, at £1.5m.

Coun Jason Zadrozny, council leader, said: “Government expects us to deliver key services on a shoestring. Our staff do an excellent job and that should be rewarded.

“That said, this will hit our reserves. The Government need to fund our public services properly – warm words don’t pay bills.”

Their concerns come after the Local Government Association urged for Whitehall intervention over similar increases to the National Living Wage, which could rise by 20 per cent in the next two years.

The body, which represents all councils in England and Wales, says without Government support, services could be ‘put at risk’.

Coun Andrew Western, chairman of the LGA’s resources board, previously said: “Councils know this year will be tough for many, especially those on the lowest incomes.

“Supporting those on the lowest pay is not only fair but improves the motivation, loyalty, productivity, and retention of hard-working council staff.

“However, staff pay makes up a huge proportion of councils’ costs and it is clear that the rising cost of living is going to have a huge knock-on impact on pay pressures for local government.”

The Department for Levelling Up, Housing and Communities has been approached for comment.