Local government employers and town hall unions have agreed to consult on a possible pay deal worth 8.9% over three years in a move that could break the impasse between the two sides.
Unions had been taking soundings among their members over possible industrial action after pay talks hit deadlock last month, with employers refusing to budge from an offer of 7% over three years, tied to a package of reform measures. The unions had rejected the offer, which they said would do little to tackle low pay among the 1.3 million local council staff.
But in a cautious statement today, the Employers' Organisation stressed the proposed new package had not replaced the rejected 7% deal on the table. "At this stage it does not constitute a pay offer. Employers will first consult with local authorities in England and Wales," it said.
"The employers' preference for a three-year deal linked to a package of reforms remains on the table, but negotiators have agreed to consult local authorities about increasing the size of the pay offer over three years."
The unions - Unison, GMB and the TGWU - would also consult their members on the proposals which are understood to mean a 2.75% pay rise for 2004, with 2.95% in each of the next two years.
A Unison spokeswoman said: "We have moved the offer significantly, including getting the employers to drop the strings attached to the original 7% offer. We are now consulting our members. We will be consulting up to July 9, via the branches, which will be encouraged to hold ballots."
Cllr Brian Baldwin, who chairs the employers' side in the national pay talks, said: "We have reached a point - after a great deal of hard work by both sides - where the employers and unions feel the best deal that can be reached through negotiation is within sight.
"If we can get an agreement on this basis it will boost our chances of delivering reforms that will lead to more modernisation and improvements in services to the public, while giving council staff a fair and affordable pay deal over three years."
But while the prospect of industrial action recedes in local government, civil servants are today discussing further strikes by benefits staff in their long-running dispute over pay and a new performance management system.
Members of the Public and Commercial Services (PCS) civil service union are also set to discuss the possibility of a 300,000-strong national strike across every government department at their annual conference in Brighton this week.
PCS members in the Department for Work and Pensions (DWP), whose group conference precedes the main national conference, today voted for benefits staff to take two days' strike action in July. There is also likely to be a mass lobby of parliament on 14 July.
The national conference is also set to discuss pay, with motions on the agenda including calls for the union to seek legal advice on how to stage a national cross-departmental strike.
Union members are frustrated at pay bargaining arrangements that involve more than 200 separate sets of pay negotiations. But legal advice would be needed on how to circumvent restrictions in trade union law that could class strikes as illegal "secondary action" because the various civil service departments are regarded as separate employers.
The calls reflect a perception that despite the formally separate talks, pay rises are all constricted by the same Treasury-imposed "cap" on the size of civil service pay deals.
