Unite the union representing staff at the Financial Conduct Authority (FCA) has launched an indicative ballot of its members for industrial action against a programme of “severe cost-cutting”.

The programme includes slashing staff pay and imposing an appraisal system which “punishes strong performers”.

An FCA spokesperson says: “Our pay and reward proposals would ensure the FCA continues to provide one of the best employment packages of any regulator or enforcement agency in the UK.

“Our proposals focus on those paid the least, with 800 colleagues below manager-level in line for salary increases of, on average, £3,800.

“We are now carefully considering the feedback received during our extensive consultation with colleagues with the aim of announcing the outcome by March.”

But Unite members will now vote in a ballot called by the union, as management has “refused to negotiate” with the workforce on the programme.

Unite says staff were left further enraged last month as the FCA chief executive Nikhil Rathi “dismissed employees’ concerns as noise”.

Unite national officer Dominic Hook said the ballot will deliver a “clear sense just how dire workforce morale and employee confidence is within the FCA leadership”.

“Management at the FCA are attempting to implement a programme of pay cuts, which has come after two years in which the staff at the FCA have worked gruelling hours to provide financial protection against Covid for borrowers, investors, small businesses and people with mortgages,” he says.

“Unite has made it clear that if introduced these cuts will make it even less likely that the FCA will be able to deliver this high standard of public service in the future. Experienced employees have been quitting the regulator in droves.

“More are expected to follow, as in a recent Unite survey 89.8% of staff described their morale as ‘low’ or ‘very low’.

“You cannot regulate the British financial system on a bargain basement basis as the chief executive, Nikhil Rathi clearly wishes to do.

“Management must enter into immediate negotiations with Unite the union in order to avoid further damage and risk to the FCA.”

The union is also currently challenging the FCA on its refusal to allow staff to have representation by an independent trade union.

It says the significant growth in trade union membership across all departments of the organisation demonstrates that the recognition of an independent trade union at the FCA is long overdue.

Unite said key concerns of staff include:

1. A “botched” consultation process as management rush to implement the changes without giving staff crucially important information. This “botched” process has recently received “unprecedented criticism” from the FCA’s own management-run staff association.
2. Pay cuts of 10-12% being imposed on a large majority of staff by abolishing so-called “bonuses”, which were universally regarded as part of basic pay. A small proportion of the FCA’s lowest-paid staff will receive a long overdue pay rise, in a gesture seen as a cynical attempt to buy off opposition.
3. Management is imposing an “unfair appraisal system” which requires managers to arbitrarily downgrade a certain number of their employees even if they are performing strongly. Current indications are that this system will hit carers, disabled people, and minority ethnic staff hardest.
4. Staff outside London are being put on new, lower pay scales, in the face of the government’s own stated agenda of “levelling-up”.
5. There are further plans to cut staff pension rights in the pipeline. Management is currently “refusing to discuss the details with the workforce”.

The ballot will close at 5pm on Monday 31 January 2022.