The City of Edinburgh Council's new car allowances have caused controversy and confusion. Members have voted in a ballot to accept the new conditions with a buy-out but concerns remain about the effect on income and services. The changes came from the Single Status agreement and the pressure to change the exisiting national scheme. Here we outline the allowances and the processes that led to the change. These apply only to City of Edinburgh employees.

Casual Users

The current rate for casual users is 43p taxable. The new rate from 1 April 2002 will be 40p non-taxable. The new rate will be index-linked as it is the Inland Revenue rate, while there was no prospect of negotiating an index-linking of the old rate. There was no compensation on offer to casual users until UNISON negotiated this.

What was finally achieved was 15p compensation per mile claimed over the last full year which effectively works out at a five year buy-out. Casual users allowance is not contractual, so could have been removed without negotiation.

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Essential users

The essential users will have a two year buy out (about £1600 taxable) and will lose the monthly lump sum but will have an increase in their mileage rate to 40p per mile. This increased rate plus the lump sum payment makes them better off for the next two years.

However, thereafter to compensate for the loss of the lump sum, essential users would have to claim around 833 miles a month. That is why so many have been disappointed in the offer, however a majority voted in a ballot to accept.

What has been achieved locally is likely to be far better that what will be achieved nationally, given the position of the employers. Nevertheless, there is a clause that would apply a national deal if it turned out to be better.

The status quo on car allowances was not an option. The value of the payments was dropping, there was huge resistance at Scottish employer level to having any national scheme and The City of Edinburgh Council had a fixed political policy for change on this issue despite strong arguments put by the unions and some chief officials. The current allowances were going to go.

The Branch could have walked away from that and handed it over to national talks. Our negotiators took the responsible position to try to salvage the best local package it could and weigh that against the likelihood of the level of industrial action that might have effected change. In that light we had to address the previous ballot when the essential users allowance was cut and members voted against action.

The final deal on offer after negotiations was without doubt the best that could be achieved through negotiation and the best so far in Scotland as far as we are aware.

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Taxation issue

The unions were originally advised that the position on tax was that it would not be taxable (as per shown on payslips as non taxable payments). We then received a letter on 7 February 2002 which stated as follows (note bold type is the employer's):

"Whilst the payment is not currently taxed at source the Inland Revenue has determined that the value of the lump sum payment is a "taxable benefit" for income tax liability and is not paid to employees on a tax free basis". The council operates a "Fixed Profit Car Scheme". This means that the detail of mileage and lump sum payments made to employees in any tax year are notified to employees (via form "Taxable Benefit Form" FCPS) in order that they may submit this information with their self-assessment tax return form to the Inland Revenue. Thereafter, if appropriate, an adjustment is made to the employee's tax code to reflect the value of the taxable benefit received in mileage and lump sum payments.

Considering they had advised that they understood it was non taxable this is a wonderful transference of guilt, from Council to Inland Revenue.

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Ballot

The result:

The Essential Users
Papers issued 832
Returned 52%
Accept 246 = 57% Reject 185 = 43%

Casual Users:
Papers issued 255
Returned 34%
Accept 66 = 76% Reject 21 = 24%

There were problems in trying to ballot all casual users. The Service Conditions Team did all they could to try to identify all of the casual users via the Council and via Shop Stewards Committees. Unfortunately there was a poor response from shop stewards.

There are unanswered questions about the information from the Council. If it can identify casual users who are due the compensatory payment, one is left wondering why they could not identify the people who needed to be balloted - even though there may have been problems correlating this with UNISON membership.

The letter accompanying the ballot is a contentious issue. The intention of the wording was to set out the factual position. The employer was making a link between acceptance of this offer and the avoidance of redundancies. However the Branch Committee had made a clear decision that we would not engage in playing off one group of workers' conditions against another's. Members might have construed from the letter that the Branch was arguing for acceptance in order to save these redundancies.

This was not the intention and not the policy of the Branch Committee.

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Branch Committee Decisions

Over the three month period December, January, February, the Branch Committee made three policy decisions:

December: Proposal on single status "package" which had; leave/public holidays, car allowances, monthly pay Decision : to discuss/negotiate separately on these matters

January: Proposal from Council on Car Allowances including threat of redundancies. Full debate on issue and AGREED to ballot with a recommendation to accept. Without dissent.

February: Ballot result announced and AGREED

Staff Side/UNISON reaction to position: Letter from Branch Secretary to Staff Side Secretary raising points covered by motion to AGM (albeit letter sent prior to motion being accepted). Staff Side Secretary wrote to the following raising the issues in the motion:
i) All Elected Members
ii) All Heads of Department
iii) Chief Executive

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Summary

1. The employer has created unnecessary strife with this issue and ignored early proposals made about possible savings (to interact with the tax situation) which could have been made but which would have left members no worse off.

2. The employer has ignored the service implications if people decide not to use their cars and has displayed a lack of knowledge of the front line duties of many staff.

3. The Branch could have explained the issue better and the covering letter with the ballot should have made a clearer distinction between the employer's position and the Branch's position.

4. There are other lessons to be learned. We need to address why the regular reports from the Service Conditions Team on the progress of the talks were not permeating throughout the branch and why we did not have a wider debate before the ballot. But the fact still remains that the status quo was not an option and what was on offer was the best that could be achieved through negotiation.

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