Unions representing local council workers said Mr Pickles tried to impose new conditions on a settlement. The dispute started soon after ministers hailed a package to settle the dispute.
Trade unions representing teachers, NHS staff, council workers and civil servants called a nationwide strike last month in protest at plans to make their members pay more for their pensions and work longer before retiring.
Several of those unions yesterday signalled they will now accept the reforms, in exchange for last-minute changes in the Government package.
Those changes, including allowing workers to accrue pension rights more quickly, led to allegations that the Coalition offered “sweeteners” to the unions.
But Danny Alexander, the Chief Secretary to the Treasury, insisted that the changes would not cost taxpayers any more money and said ministers had not given any ground to the unions. “This is a fair deal for public service workers, an affordable deal for the taxpayer and a good deal for the country,” he said.
Mr Alexander told the Commons that local government unions had signed up for the agreement. But hours later, local government unions said a letter from Mr Pickles formally setting out the proposed agreement was unacceptable.
The unions, the GMB, Unison and Unite, are understood to have objected to Mr Pickles’s suggestion that councils’ pension contributions will be capped. Mr Alexander immediately tried to defuse the row, saying Mr Pickles’s letter was a mistake and was being “withdrawn”. But there was no sign of a new letter last night and the unions were still angry.
Unison said Mr Pickles’s intervention “undermines trust and confidence in the relationship with the Government”. Sources close to Mr Pickles said the row was based on a “misunderstanding” and insisted the local government unions would be brought back into the talks.
However, losing the support of the local government unions would weaken the Coalition’s claim to have widespread union agreement for pension changes.
Even before the dispute, several unions had not signed up to the deal.
The National Union of Teachers, the NASUWT and the University and College Union said they wanted more detail. But ministers said they were confident those unions would back the settlement.
The Public and Commercial Services (PCS) union, which represents civil servants, said it would reject the deal outright. Ministers said they will not negotiate any further with the PCS.
The Government wants public sector staff to pay an extra three per cent of their salaries towards their pensions and increase their retirement ages.
Pensions will also be paid as a share of a worker’s average salary over their career, rather than the final salary.
