An ongoing row between Financial Conduct Authority management and staff over cuts in pay and conditions has resulted in a new pay offer from the regulator, but whether this is enough to stave off strike action remains to be seen.
Back in January, the Unite union balloted FCA staff after it claimed the pay deal on offer could create a “bargain basement” regulator. At the time, 87 per cent of those members who voted were in favour of strike action.
However, following consultation with staff, the FCA has come back this week with an amended pay offer, which would see around 800 of the FCA’s lowest paid staff receive average salary increases of £4,310 to “the minimum of a new pay benchmark” according to the FCA. Other salary increases and performance-related pay would take overall increases to an average of around £5,500.
FCA employees who meet performance targets – around 85 per cent of staff – will see salary increases of at least 5 per cent this year and 4 per cent next year, according to the FCA. These staff would also receive a one-off backdated cash payment equivalent to 4 per cent of salary in April “in recognition of the changed economic environment since the consultation was launched in September last year”, the regulator said.
However, all discretionary cash bonuses will be removed from next year, meaning the highest performing FCA staff will see their last bonus paid in April this year.
Nikhil Rathi, chief executive of the FCA, says: “I’m hugely grateful for the time colleagues have spent contributing to the consultation and I understand the strength of feeling about some of the changes we are making. We have welcomed the open debate and discussion and, with the board, considered all the feedback we have received.
"We believe we have developed a fair, competitive, and sustainable offer that will help us achieve our regulatory objectives, as well as diversity goals, that supports the lowest paid and the strongest performers, with most colleagues receiving a minimum salary increase of more than 9 per cent over the next two years and an average of more than 12 per cent over that period.”
However, Unite is still not convinced that the new pay proposals will resolve the concerns it and its members have over the planned changes.
Dominic Hook, Unite national officer, says: “The [latest] pay proposals by the FCA are a grave error and will be significantly harmful for a large number of loyal, experienced and long-serving staff.
“The FCA should get to the negotiating table with Unite and hear from the Unite workplace representatives in order to ensure they do not do irreparable damage to this regulator.”
The key issues concerning staff, as outlined by statements from Unite, are extensive:
- The loss of routine payments that Unite claims the FCA “misleadingly labelled ‘bonuses’”, which amount to between 10-12 per cent of salary.
- The narrowing of pay bands, lower pay bands for Scottish staff, and cuts that affect graduate trainees.
- A threat of future cuts to pensions – although it is unclear at present whether the new proposals resolve this concern or not. Management had been refusing to discuss the details with the workforce, according to Unite.
- Staff outside London are being put on new, lower pay scales, in the face of the government's own stated agenda of levelling-up.
- Management is imposing what Unite dubs an "unfair" appraisal system that requires managers to "arbitrarily downgrade" a certain number of their employees even if they are performing strongly. Current indications are that this system will hit carers, disabled people and minority ethnic staff hardest, according to Unite.
- Persistent problems with staff leaving and difficulties in recruiting replacements. Unite said: “The FCA has yet to provide a full set of figures showing the scale of this exodus.”
- A "botched" consultation process as management rush to implement the changes without giving staff important information. This process has recently received unprecedented criticism from the FCA's own management-run staff association, according to Unite.
- Ongoing high levels of pay inequality that are described by Unite as “unusually high by the standards of public sector regulators”. It added: “Bafflingly, while pay bands for most staff are being ruthlessly squeezed, those for senior managers are being uprated. Already the FCA has around 40 executives who earn more than the prime minister.”
The FCA has 38 members of senior staff including the executive committee earning between £160,000 and £359,000 a year for 2020-21, according to its annual report.
Morale at the regulator has suffered, with a recent survey by Unite finding 89.8 per cent of staff describe their morale as ‘low’ or ‘very low’, according to Hook. Despite the updated pay offer, the concerns outlined above have still not been fully addressed, according to Unite.