Pay cut deal forced by jobs fears: Ngaio Crequer reports on the financial pressures behind the Sheffield council stance

THE decision by 20,000 Sheffield council workers to vote for a 3.25 per cent pay cut to avoid 1,400 redundancies illustrates the fear of unemployment during deep recession.

The workers were balloted because the council had to reduce its wages bill or slash services or make redundancies to stay below the pounds 366m spending ceiling imposed by the Government. The decision - 2,000 voted against, and 4,000 teachers could not take part because they are paid according to a government framework - is unprecedented.

It is unlikely to be seen as a role model, however. The National and Local Government Officers' Association (Nalgo), which represents 750,000 workers, said Sheffield was the only authority known to be approaching the problem of budget cuts in this way.

Dennis Reed, a Nalgo local government officer said: 'This difficult decision has been taken to protect jobs and services and is not a response to the Government's pay limits. It is not a model for other authorities. This is another example of how the Government is placing local authorities in an impossible situation in trying to maintain jobs and services.'

Nalgo is preparing a claim for 1993 which will ignore the 1.5 per cent government pay limit.

Local authority employers agreed it was unlikely that other councils would follow Sheffield's example. 'But it does show that when authorities are faced with a lot of financial problems the pay figure is something they will look at,' Paul Hensby, of the Local Government Management Board, said. The GMB general union was the largest single union representing the Sheffield workers, and its members voted in favour of the pay cut. The union represents refuse workers, roadsweepers, home helps and school-dinner assistants. A roadsweeper or school cleaner earns about pounds 134 a week.

Mick Graham, the national secretary of the GMB, said: 'The majority said, 'don't shoot me now'. The gun was held to the heads of a lot of local government workers. Either cut services, cut jobs, or accept redundancies.

'Local government workers , whether white or blue collar workers, many of them part-time or low paid, are committed to the provision of high-quality services. This battle was not with Sheffield council. But we do not recommend it for the future. We want sufficient resources to finance local services.'

Only this week the National Association of Citizens' Advice Bureaux reported that fear of the dole was forcing workers to accept worse working conditions.

A CAB spokeswoman said: 'We found that workers were accepting poorer terms and conditions, pay cuts and longer hours, rather than losing their job. The problem is one of high unemployment and little legal protection. If an employer says he will cut your pay and you protest, he may show you where the door is.'

The Confederation of British Industry said one in three employers was introducing pay freezes, or rises in line with inflation. 'In a recession pay needs to be flexible. In some cases wage cuts to keep a job may be appropriate.'