Senior Salaries Review Body

Thursday 21st April 2016 Written Statements

[The Prime Minister (Mr David Cameron)]

The 38th report of the Senior Salaries Review Body is being published today. This makes recommendations about the pay of the senior civil service, senior military officers and the judiciary.

We understand the need to ensure that we are able to recruit, retain and motivate staff with the right skills and experience. However, pay restraint continues to be a key part of our plans to finish fixing the public finances. Senior public sector workers, like everyone else, will have to continue to play their part to ensure we deliver security for working people across the country. Moreover, the independent Office for Budget Responsibility estimates that 200,000 public sector jobs have been protected thanks to our average 1% pay policy.

Senior military officers

The Government have accepted the recommendation of a 1% increase to base military salaries for all 2-star officers and above with effect from 1 April 2016. The Government have accepted the recommendation that there is no change to the current pay differentials for senior medical and dental officers.

Judiciary

The Government have accepted the review body’s recommendation of a 1% salary increase for the judiciary.

Senior civil service

The report makes clear the need to take a more strategic approach to senior civil service reward, including better targeting of resources and greater focus on the total package. We welcome this analysis which will inform the civil service workforce strategy.

The Government have accepted in full the recommendation of the Senior Salaries Review Body to introduce an in-year contribution award scheme for up to 10% of staff within current cost limits. This will provide a closer link between pay and performance by enabling departments to provide instant financial recognition for outstanding contribution.

We recognise the concerns of the Senior Salaries Review Body on the pay overlap between delegated grades and the bottom of senior civil service pay band 1. The Government believe that individual departments are best placed to assess the pay position of individuals within their own senior civil service cadre, and indeed the needs of their own delegated grades, and to decide how to prioritise the resources available to address any pay issues.

We have therefore accepted in part the recommendation on raising minimum salaries. The Government accept the increase in minima for pay bands 2 and 3. For pay band 1, a £2,000 increase in the minimum salary would restrict the flexibility that departments have asked for to enable them to target the resources available. Instead, the Government will prescribe an increase of £1,000 and ask departments to give serious consideration to raising salaries by more based on their individual business needs.

Similarly, the Government have accepted in part the recommendation on a flexible framework for base pay awards, but do not support an across the board budget of 0.94%. Instead, as well as raising staff to the new pay band minima, departments should have the flexibility they have asked for to target the remainder of the 1% award to meet their own business needs.

This package of proposals for 2016-17 provides the right balance between necessary pay restraint and the need to recruit and retain people of the right calibre. It gives departments flexibility to target pay increases within the 1 % average award, enables them to reward outstanding performance and will help them to recruit and retain people in business critical roles.

Very senior NHS managers

The report recommends that the Department for Health determines what level of pay increase is appropriate for this year. Such very senior managers are mainly employed by national arm’s length bodies.

The Government have decided to request arm’s length bodies to target the use of the 1% pay award to address both specific local recruitment and retention issues, and reward individual performance.

We will also proceed with the roll out of the new arm’s length body executive and senior manager pay framework, as set out in our evidence to Senior Salaries Review Body.

We are grateful to the chairman and members of the review body for their work on this year’s report. Copies have been laid in the Vote Office, the Printed Paper Office and the Libraries of both Houses.

[HCWS693]