Senior Public Sector Pay Awards

David Lidington Excerpts

Thursday 13th September 2018 Written Statements

[The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Mr David Lidington)]

I am today announcing the Government’s decision on pay for the senior civil service, senior military and police and crime commissioners.

The Government received the Senior Salary Review Body’s (SSRB) report on 2018 pay for the senior civil service, senior military and police and crime commissioners on 4 July 2018.

The Government are committed to world-class public services and ensuring that public sector workers are fairly paid for the vitally important work they do. We ended the 1% pay policy in September 2017 because we recognised more flexibility is now required to deliver world-class public services—with higher awards in return for improvements to public sector productivity.

It is vital that we consider all pay awards in the light of wider pressures on public spending. Public sector pay needs to be fair both for public sector workers and the taxpayer. In reaching a final decision on all 2018-19 public sector pay awards, we have balanced a need to recognise the value and dedication of our hard-working public servants with ensuring that our public services remain affordable in the long term, to contribute to our objective of reducing public sector debt. We have also sought to ensure that pay awards are fair and consistent across public sector workforces, reflect existing pay and benefit packages, as well as recruitment and retention levels.

The Government value the independent expertise and insight of the SSRB and take on board the valuable advice, principles outlined, and constructive challenge to the Government’s recommendations outlined in the report. Within the current context there remains a need to take into account affordability when making decisions on senior pay, as well as fairness in the approach for senior and junior grades.

Senior civil servants

The Government’s evidence to the SSRB in December 2017 set out a vision for a future SCS pay framework which—in line with the civil service workforce plan—will help us attract, retain and develop the very best senior talent for government.

This new pay system will aid us in achieving our vision for a future SCS which is more diverse, experienced and professionalised, with a better mix of specialist and generalist leaders.

We are pleased that the SSRB welcome the direction of travel laid out in our vision for the future SCS and look forward to engaging with SSRB to further articulate our strategic plan to reach this vision.

Over the next year, and among other commitments set out in our response to the SSRB’s recommendations below, we will be articulating plans to:

move to a set of consistent pay ranges by professional grouping over time.

provide greater reward for high performers and those who develop capability by remaining in role.

explore options for reforming the SCS performance management system.

Taken together, this will start tackling some of the biggest issues identified with the current pay system as well as ensuring that the civil service is able to attract and retain key, scarce skills from the external market and balancing incentives in the current system.

The Government value the independent expertise and insight of the SSRB and take on board the valuable advice, principles outlined, and constructive challenge to the Government’s recommendations outlined in the report.

Within the current context there remains a need to take into account affordability when making decisions on senior pay, as well as fairness in the approach for senior and junior grades.

Senior civil service recommendations and response for 2018-19

This year the SSRB made six recommendations for the senior civil service (SCS):

all SCS members should receive a 1% consolidated basic pay increase.

0.25% of the pay bill should be used to increase the pay band minima for all pay bands to £68,000, £90,500, and £111,500 respectively.

the pay range maxima are reduced for new recruits and those currently paid below the new maxima, to £102,000, £136,000, and £167,500 respectively.

1.25% should be allocated and distributed to address pay anomalies.

The Cabinet Office should provide evidence to demonstrate the application of the award to specific target groups of staff.

the introduction of a corporate recognition scheme with awards of around £1,000.

The Government accept the recommendation of an overall 1% figure for consolidated increases but will continue to give Departments flexibility to target that overall 1% award at the individual level. This aligns to SSRB’s principle of targeting reward to higher performers and those lowest in the pay range and is consistent with the approach taken for delegated grades.

The Government accept the recommendation to increase the minima for all pay bands to the figures suggested by SSRB. The Government also agree that the 1% pay award should be applied after any increases from the raising of the minima.

The Government agree in principle to the recommendation to reduce the maxima for SCS in non-market facing or niche roles. This will not be achievable for this year’s pay round as further consultation is needed to understand the makeup and workability of professional groupings before pay ranges are set.

The Government accept the recommendation to set aside further money to address pay anomalies, and agree to provide clear criteria for use. However to put aside the 1.25% suggested would move significantly away from coherence between the approach for SCS and delegated grades and risks affordability issues. Efficiencies found from controlling movement around the system will be put aside to cover anomalies and increases to the minima, and we anticipate this to be 0.25% rather than the 1.25% SSRB proposed.

The Government accept the recommendation to monitor the use of the aforementioned pay anomalies money, as well as the recommendation to extend in-year non-consolidated performance related awards to 20% of the eligible population and introduce a new recognition scheme for corporate contribution.

The Government note the SSRB’s additional comments outside of the formal recommendations and commit to:

providing a clear articulation of the desired application of the SCS pay system, be that centralised management of the workforce, delegation to departments or a specified balance between the two.

review the SCS performance management system as a priority.

outlining clear guidance and principles to ensure the workability and fair application for the movement to pay ranges based on professional groupings.

exploring options for a credible capability-based salary progression model.

providing a clear proposal on the future of the SCS 1A grade.

The Government would like to work proactively with SSRB to help develop our proposals further and invites the review body to contribute towards the further review of the senior civil service pay framework including the commitments made above.

Senior military officers

The Government have accepted the spirit of the recommendation of a 2.5% increase to senior military salaries with effect from 1 April 2018 with a 2% increase to pay and a 0.5% non-consolidated one-off payment. This decision is made to be consistent with the main armed forces’ pay award and in consideration of long-term affordability. The Government have also accepted the recommendation that there is no change to the current pay differentials for senior medical and dental officers.

Police and crime commissioners

The Government have accepted in part the SSRB’s recommendation to increase the bottom four PCC salary bands. With effect from 1 May 2018, these pay bands will be increased by 2%. PCCs taking on responsibility for the governance of fire and rescue services will also receive an additional consolidated allowance of £3,000.

The Government have accepted the SSRB’s recommendation that PCC pay should be reviewed again in 2020-21 to enable a full assessment of the role, particularly in the light of the additional responsibilities for fire and rescue services; thereafter, full reviews should be conducted on a four-yearly basis. However, future reviews should be aligned to the PCC electoral cycle. A further review should therefore take place to set PCC pay ahead of the 2024 elections.

The SSRB also recommended that from May 2019, PCC salaries should be increased by 2% in line with the pay award for local authority staff and that this link should continue annually until the next formal review of PCC pay. The Government have not accepted this recommendation. The role of PCCs continues to evolve and the Government are of the view that automatic pay increases are not appropriate while change is ongoing. The Government also seek to avoid creating a disparity between PCCs and police officers whose pay increases are not automatic.

The SSRB recommended that a review of the pay structures for PCCs should be conducted in advance of the next formal review of PCC pay. The Government have not accepted this recommendation. PCC pay structures are currently aligned to those of chief police officers, and their pay is under review as part of sector-led reforms to deliver a new pay and reward framework. PCC pay structures will be reviewed following the completion of the ongoing review of chief officer pay.

The SSRB recommended that PCCs who lose their seat at election should be entitled to a loss of office payment. The Government will further consider the issue.

[HCWS967]