The continuing drift from RPI to CPI and the impact on pay.

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2019 Water, Environment & Transport Conference
26 February 2019
Carried as Amended

This conference notes the continuing desire by employers in the water sector to move away from RPI and embrace CPI when negotiating pay.

Excuses abound, from the employers, to explain the reasoning to change to CPI. One of the main excuses being given, is the regulator Ofwat’s changes to the method used to increase consumer bills. To provide context, historically increases to water utility bills have been linked to the Retail Prices Index (RPI). With effect from 2020 Ofwat have made the decision to move to using the Consumer Process Index (CPI).

As a result of the change by Ofwat, employers are using this as an opportunity to use CPI for pay rather than RPI. The impact on members is significant with CPI on average running at around 1% less than RPI. As is always the case, Senior Management and Director pay, and bonuses are seen as exempt and increase at rates our members can only dream about.

RPI reflects the cost of living and is an absolute minimum requirement for our members just to stand still. Anything less is a deterioration of living standards.

The myth that pay can only increase in line with the method for increasing bills needs to be busted. Pay negotiations are between the collective bargaining team and the employer and not restricted to misinterpreting the regulator.

This conference calls upon the service group executive to:

1)Collate the trends in pay awards across all the water sector;

2)Work with Ofwat on clarifying that employee pay is for the employer and employees to agree;

3)Encourage all water branches too, as a minimum, push for RPI for pay awards.