London Weighting: our 2018 claim and the University’s response

weight on wallets

Click on the three weblinks below to skip to the section of this post you’d like to read.

Read our claim (“the claim”)

Read the University’s response (“the response”)

Read UCU’s initial concerns with the University’s response


PART A: THE CLAIM

Here is the full text (minus appendices) of the claim we submitted to the University of London on 9 October 2018.

UCU & UNISON

  1. Background and context of original claim

The original London Weighting claim in 2014 asked for an immediate uplift to £4,000. In the claim, and at the subsequent meeting with Kim Frost, the Unions argued that London Weighting had been frozen at £2,134 since 1992 and fell far short of addressing the needs of staff who live and work in London. It failed to address the cost of housing, transport and living expenses. It was at that time the lowest of all London Universities (along with SOAS) and did not rise with either inflation or national pay awards.

This original £4000 claim was made as this was the equivalent of RPI increases since 1992. The case made at the time related to staffs’ genuine concern about their experience of a real cost of living crisis and a view that the London Weighting had not kept pace with the steep rise in the cost of living in London including travel, housing, energy and utility bills, childcare and food costs. The same concerns are relevant today.

Our members at the time stated they were ‘struggling to make ends meet’ and found it difficult, or were completely unable, to save any money. This meant that they had no money for any emergencies or unexpected costs. At worst, some staff were in debt, living off savings and had to take out loans to cover their costs each month.

This argument was accepted by the UoL at the time (although not to the level of £4000 claimed) and an uplift of £273 per annum over a 5 year period was agreed. This was to bring London Weighting to a level of £3500 by 01 08 18.

This agreement also stated that UoL would “enter into a series of meetings with UCU and Unison to review London Weighting at the University of London if the rise in the London Living Wage is 6% or above”. 

According to the Living Wage Foundation, there has been an 11.47% increase in the London Living Wage from £9.15/hour in 2014/15 to £10.20/hour in 2017/18. (https://www.livingwage.org.uk/calculation)

  1. Where we are today

“I am in the difficult position of having to question whether it is sustainable for me to continue working in London as the London Weighting currently on offer is so low, and wages have not kept pace with increased costs.” (School of Advanced Study staff member)

Since the original agreement was made, there has continued to be a year on year wage squeeze when comparing pay increases. Pay settlements and the annual increases in the retail price index (RPI) are outlined below

Year RPI annual change(August) Pay settlement % % Shortfall  in pay settlement against RPI increase
2015 1.1 1 0.1
2016 1.8 1.1 0.7
2017 3.6 1.7 1.9
2018 3.5 2 1.5
Total 10 5.8 4.2

This has led to 4.25 shortfall in pay settlement against RPI increases from 2014-2018. The human cost of this is that UoL staff experiencing further pressures on their income compared to people living out of London with regards to overall salary as well as both rent and travel increases.

WE ESTIMATE THAT 34% OF UNIVERSITY OF LONDON STAFF RECEIVE SALARIES BENEATH THE MINIMUM INCOME STANDARD FOR LONDON 

In 2018, we estimate that over a third of University of London employees do not receive a salary which, according to research by the Trust for London, enables them to reach a socially acceptable standard of living that covers essential costs and enables participation in society. A single person of working age in inner London needs £30,000 in earnings to meet the Minimum Income Standard (MIS) for London – this is 68% higher than an equivalent average person in the rest of the UK. (Appendix 1; Table

RENTS FOR PEOPLE IN INNER AND OUTER LONDON HAVE INCREASED BY MORE THAN 15% BETWEEN 2014 AND 2017.

Since the original London Weighting settlement in 2014, the average lower quartile private rent for a single working-age adult has increased by almost 20% from £190.77 per week to £227.67. (Appendix1; Table3)

This is not to mention other housing costs. “ my council tax has increased by 12% from 2016-2018 (in two 6% increments). It is time to address London Weighting” (UoL Worldwide staff member) 

LONDON COMMUTERS SPEND UP TO 5 TIMES AS MUCH OF THEIR SALARY ON RAIL FARES THAN WORKERS IN OTHER EUROPEAN CITIES

Data from the TUC indicates that a monthly season ticket accounts for an increasing proportion of our average earnings. A typical worker commuting into central London from Chelmsford spends 13% of their earnings on travelling to work.

From a member of staff in The Careers Group: “I commute from zone 6 on South Western Railway (was SWT). In January 2018, my season ticket went up by 3.6%.”

The London Weighting is vital to off-set costs not just for those living in London (with higher outgoings) but also for commuting, which is much higher than anywhere else in the UK (and far, far higher) than in Europe.” (the Careers Group staff member) 

UNIVERSITY OF LONDON EMPLOYEES WANT THE UNIONS TO NEGOTIATE FOR A HIGHER LONDON WEIGHTING 

The reality of the financial squeeze staff have been under has been exhibited in the results from the All-Staff Questionnaire carried out by UCU in August and September 2018. This survey shows that staff think that a higher London Weighting allowance should be the highest local campaign priority for the union.

Of the 131 responses to the survey, 40.2% of respondents stated that this should be our top campaign priority (10 percentage points than the second highest priority) 

  1. Potential gains for the University and its employees

Committing to a further uplift to London Weighting due to this above 6% rise in the London Living Wage will mean the UoL would benefit from this investment in their staff by achieving the following:

  • staff feeling appreciated by their employer, hence increased sense of belonging and commitment to the UoL
  • reduced stress due to an improved financial situation, which can lead to reduced sickness absence
  • staff will appreciate that in the times of financial strain the employer recognises and chooses to respect and honour the fact that they too are under financial strain
  • improved image as the leading employer in pre-92 universities when it comes to recognising cost of living in London – which can only aid recruitment and retention. 

Recommendation

The cumulative impact of the above increases in costs and below inflation wage increases mean that staff still haven’t reached the level of London Weighting expected if kept in line with RPI.

Therefore, UCU and UNISON argue that the UoL should honour the commitment it made in 2014 by agreeing to an additional uplift to align our London Weighting allowance with increases above 6% of the London Living Wage over the same period.

We therefore are asking for an uplift from the current LW level of £3500 to of the original London Weighting claim of £4000 + RPI since 2014.

UNISON and UCU strongly argue that this is an undertaking the University should support and implement immediately.


PART B: THE RESPONSE

Here is the full text of the response by the Director of HR on 13 November 2018.

Dear UNISON and UCU Senate House branches, 

I am responding on behalf of the Vice-Chancellor’s Executive Group to your request, submitted on 9th October 2018, that the University honours its commitment to review the London Weighting allowance for its staff. 

The University is sympathetic to your request and is happy to acknowledge its original commitment to enter into further discussions on this matter in the given circumstances. 

Having carefully considered the specific recommendation made in your request the University has concluded however that it is not able to accept this recommendation.  It is estimated that such an increase would add around £750K to the University’s salary bill in the current year, with the cost of backdating to 2014 therefore being very significant.  I have commented further on some of the University’s other considerations below.

In recognition however of its original commitment, and as an acknowledgement of the financial pressures, particular on the lowest paid, highlighted in your request, the University would like to propose a series of meetings (potentially as a sub-group of the JNC) to discuss pay.  More specifically to explore pay progression and the various discretionary elements of pay to identify opportunities for addressing the concerns you have raised.  Additionally, the University proposes considering your request for the harmonisation of Annual Leave as part of these discussions.

The University accepts that this is not the response you would have been seeking however hopes that you are willing to positively engage the series of discussions proposed above. 

Considerations

In reaching the decision outlined above the University as considered the following:

1.    The original agreement represented a significant financial investment by the University (adding around £1.25M to the University’s pay bill from August 2018 – it is thought that this does not include the additional pension contributions the University will be making);

2.    That there is nothing that can be read into the settlement that commits the University to a particular course of action in the given circumstances beyond entering into further discussions.

3.    That where London Weighting is no longer a separate element of pay it is arguable that revisiting the agreement effectively constitutes negotiating salary points on the single pay spine at a local level. 

4.    The request, if only implemented from 1 August 2018, would add c. £750K to the University’s annual wage bill (the cost of backdating would be very significant);

5.    The University anticipates significant increases in its overall costs arising from, inter alia:

a.    The most recent annual pay award;

b.    The impending increase in USS Employer pension contributions (every 1% increase in employer pension contributions adds around £300K to the University’s pay bill); and

c.    The decision to bring front of house services in-house during 2019.

6.    UNISON and UCU have made a separate request to harmonise annual leave entitlements (something that would not be cost neutral if accepted);

7.    There are a number of ways in which employee pay can increase, some of which are discretionary and include:

a.    Nationally negotiated annual pay award;

b.    Automatic incremental pay progression – each increment represents a 2-3% increase and a significant proportion of staff remain eligible for incremental progression;

c.    The annual performance review of pay (currently around £200K per annum is set aside for this purpose); and

d.    Responsibility and other allowances.

With best wishes,

Simon

Simon Cain

Director of HR

University of London

 



PART C: INITIAL CONCERNS BY UCU

  • Due to its egalitarian nature, London Weighting is a pay equality issue. It needs to be addressed on its merits and in a manner commensurate to its seriousness.
  • The proposed new sub-committee, as currently described by the University of London, risks conflating London Weighting with other elements of our pay and benefits package. We believe that this could cause more harm than good.
  • The affordability grounds on which the University justifies rejecting our claim require further scrutiny. We know that the University of London is able to find extra money when it needs to; this is evidenced by a recent FOI disclosure indicating that it has spent £2.5m on unplanned, additional security and receptionist cover in 2018.

We need input from UCU members to help us decide on our next steps.