BOTH of Dorset’s unitary councils could struggle to meet the expected pay award to staff this year.

The employer’s side nationally has offered a flat-rate increase of £1,925 to the majority of the workforce, worth 10.5 per cent to the lowest paid on around £18,330 a year.

Unions had been asking for £2,000 a year or an increase at the Retail Price Index, currently 12 per cent. It is not yet known whether their members will be recommended to accept the offer or ballot for some form of industrial action.

Both Dorset Council and the Bournemouth, Christchurch and Poole councils had been anticipating an increase in pay of around 3 per cent at the time budgets were set in February.

Dorset Council finance portfolio holder Cllr Gary Suttle says that since then inflation has more than doubled bringing with it a range of rising costs, well above what was then anticipated.

He said when the budget was set Dorset Council had allowed £2.9million for inflationary pressures with a £3m contingency for pay.  Both are now out of line with current rises although Cllr Suttle says the authority does have £8.7million in an unallocated contingency budget it could use.

At Bournemouth, Christchurch and Poole the council finds itself in a similar position over pay, although unlike Dorset is currently considering having to borrow money to achieve the streamlining of services which its rural neighbour has now largely completed.

Both councils had anticipated large savings coming from creating unitary authorities through what are known as “transformation savings” as services are reorganised. Dorset claims it is already making savings of £10m a year through the changes.

BCP had reduced the target figure for transformational savings last year by half and is yet to make many of the changes it wants to. One of the last estimates suggested the council was £61m short of the funding it needed to make changes with a warning that it may have to borrow more to streamline services, which may include some redundancies.

In February at the time of setting the budget BCP council leader Drew Mellor said the authority’s budget for the year planned for transformational savings over 20 years which should save the council £50m a year.

Cllr Mike Cox described the Conservative leadership’s approach to budgeting at the time as “financial jiggery-pokery.”.

He said the council was not living within its means to the tune of £40 or £50million a year - a view which the council leader rejected.

Cllr Suttle says that without taking the pay increase into account Dorset Council is currently predicted to have a £6.5million shortfall at the end of the financial year.

He told a recent Cabinet meeting that in his estimation the council starts each year with £20m less than it needs because of a shortfall in Government funding, forcing the authority to continually be one of the highest for council tax charges.

Said Dorset Council in a statement on the pay award: “As we are still in discussions with the trade unions, it is too premature to outline the implications and ways we may have to fill the gap…Understandably we want to ensure our employees are informed first and we will then release further details on the agreement and how the council will respond.”

Graham Farrant, chief executive at BCP said: “The council is considering carefully the implications of the National Employers for Local Government Services’ offer to local government employees of a flat rate £1,925 increase in their salaries for 2022/23, plus an improvement in other terms and conditions. We allowed for a 3.1% increase in the pay bill as part of our 2022/23 budget and this offer is more generous. We therefore need to work through the implications of this alongside other budget pressures such as the increasing cost of living, and any proposals will be included in future financial update reports to Cabinet.”