Report of UNISON National Executive Council 3rd April 2023

The NEC met for a special meeting with only one item on the agenda: a proposal from the FRMC (Finance committee) to increase overnight subsistence allowance. The Chair of FRMC outlined the proposal that had been agreed at FRMC with 9 in favour, 0 against and 1 abstention at their previous meeting:

• UNISON hasn’t changed its expenses scheme since 2014;
• HMRC influences what we can pay as if you pay expenses above HRMC’s permitted rates, the portion you pay above the permitted amount is liable to tax;
• UNISON’s overnight subsistence allowance is £40, but HMRC says that anything above £25 is taxable, so we tax the £15 above £25 – and at a 20% tax rate that means £3 is deducted from £40 as tax;
• FRMC wanted to review these rates as we were getting representations from members and particularly low-paid members concerned about the overnight subsistence rate being insufficient. Food inflation is at 18% currently.
• FRMC had separate discussions at its November and January meetings and decided after looking at it in detail that:
• We should not recommend changes to the daily subsistence rates which are set currently at HMRC-compliant levels and so do not need to be taxed (i.e. the £5, £10, £15 unreceipted levels). To increase these rates would increase levels of administration for the union as they would then need to be taxed, with marginal benefit to be gained;
• Not to increase mileage rates, as UNISON’s mileage rate is also set at the HMRC-compliant level. To increase the rate above 45 pence would require significant additional administration by both central Finance staff and branches who would need to administrate tax on mileage claims. It would also require investment in new payroll software;
• We should increase the overnight subsistence rate from £40 to £50.

• The estimate of costs of this change are on the range of £150K to £220K per year. We have this range of cost because normal meetings frequency since the Covid-19 pandemic has not really settled down yet. We are having fewer physical meetings than we were pre-pandemic but it remains to be seen post-lockdown just how many meetings will stay online.
• Of the 150-220K, at least half would be borne by branches; one quarter of the costs would relate to staff expenses, because if the decision to increase the overnight subsistence expenses rate is taken it would apply equally to staff; the remaining quarter would apply to lay members on other meetings such as the NEC, SOGs, SGEs and so on.
• Change should apply from April 6th which is the new tax year, which makes most sense to reduce the burden of admin on the central Finance team.
• For clarity, if the rate goes up to £50, £45 will be payable as £25 will be taxable at 20% so you’d need to deduct £5. That’s an increase of £8, from £37 to £45 net of tax.
• If this is agreed today by the NEC, communications would go out as soon as possible so that branches are advised in advance of the Health Service Group Conference on 17th April.

In discussion, some NEC members made various points to oppose the change:

• It was not affordable given the deficit of 2022;
• It would be problematic in Scotland due to different tax regime;
• It would be problematic for members on Universal Credit who may lose it.

It was discussed in response that:

• No member needs to claim Overnight Subsistence if they have concerns about tax or benefits; there is a set of receipted allowances and these do not impact on tax or benefits;
• The impact on both would likely be negligible (pennies not pounds) but tax and benefit matters are inevitably highly personalised and so advice should be sought from tax or benefits office if any member or activist has concerns;
• Branches are not compelled to pay the higher rate to branch members, though it was suggested that the NEC should consider mandating this to ensure that low-paid members were not disadvantaged because of the branch they happened to be in;
• The change was affordable and proportionate to inflation and would make a considerable difference to encourage participation, particularly amongst low-paid members.

What was anticipated to be an uncontroversial decision in support of the Finance Committee’s position took up the full allotted hour with many speakers lining up to strongly criticise the proposal. Due to the way the debate had panned out, one NEC delegate asked for a ‘roll call’ for the vote i.e. it would be a named vote. 2 delegates who had vocally opposed the increase lost their internet connection at that point, meaning their vote was not registered, and other speakers who had been strongly against the rise decided to abstain after hearing the full debate.

The vote recorded was: 36 For, 2 Against with 5 Abstentions.