Scottish Water’s cost cutting dampens employees’ spirits

Scottish Water has embarked on its most controversial cost saving initiative
yet, as it harmonises pay and conditions across its 4,700-strong workforce.

However, the move has already drawn criticism from angry employees who feel
the organisation is ignoring staff in a bid to hit huge cost savings and
efficiency targets set by the Scottish Executive.

In a memo sent to Personnel Today by a worker at Scottish Water, the Unison
union sets out a new salary structure in which pay is re-graded into six bands.

The source claims the changes are a breach of TUPE staff transfer
regulations, which state that employees’ salaries are protected for five years
if they are transferred from one public organisation to another.

The worker said that the salary changes would affect staff pensions and
National Insurance contributions, as well as their ability to pay their

In Scottish Water’s defence, HR director Paul Pagliari said that it was
vital to harmonise salaries and conditions, such as overtime payments and
holiday entitlements, because the organisation had been created by merging
three separate bodies. He said current pay and conditions were "all over
the place", which was causing anxiety among staff.

He said it was "blatant nonsense" that the changes would
contravene TUPE, and added they were formed by a staff council involving three
unions and workers from all company sections.

He also acknowledged that the initiative would lead to large savings for the
publicly-owned body, which has been ordered by the Scottish Parliament to cut
£1.45m from its operating expenditure before 2006.

This was based on the organisation’s promise to invest £2.3bn on improved services,
despite inheriting a capital budget of £1.8bn. Pagliari added that the
regulator’s orders would mean cuts in people costs of around £70m by 2005/6.

By Michael Millar and Penny Wilson

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