Garry Graham: As the pay freeze ends, ministers must enact real reform

Increasing budgets and more leeway on pay gives ministers a chance to enact much-needed pay reform argues Garry Graham. Whether they do so will show how committed they are to building and supporting a skilled civil service
Nick Ansell/PA

By Garry Graham

27 Oct 2021

Talk of better pay must be more than just words. Demonstrating how staff are valued must be about more than clapping. The headlines from the Budget and Spending Review today, the removal of the pay freeze and an increase in departmental budgets, suggest that there is a real possibility of significant pay settlements but there are a lot of factors in play when considering the true value of any rise.

Prospect’s detailed analysis, as part of our evidence to the Spending Review, shows that pay for many public service members has not kept pace with either inflation or pay increases in the private and wider public sector for more than a decade.

Most civil service pay systems are broken. Research by Incomes Data Research shows that the vast majority of employers in the private sector in the coming year are planning to make pay increases of inflation and above. The vast majority are reporting real difficulties in recruitment and retention and increasingly competitive labour markets, particularly for professional and specialist skills. What was a widening gap between pay in the private sector and the public sector is due to grow wider if things do not change radically. And amongst the public sector, the civil service is the bottom of the pile.

This government talks a lot about skills and building capacity and capability but that lack of pay progression has destroyed all confidence in the pay systems

If this government was concerned to protect living standards it needed to signal today a commitment to building and valuing a highly skilled civil service. The chancellor has boosted budgets and also said that public sector pay will be set by reference to the Pay Review Bodies. This is a huge step forward from last year’s pay freeze but it must not be forgotten that civil servants not in the SCS, the majority in fact, do not have an independent review body. The only people fighting their corner on pay and making the case for a fair deal will be your union. No one joins the civil service to earn “film star” wages but the very least people can expect for a job well done is for their living standards not to decline in real terms.

As well as protecting living standards staff need to d be able to progress through their pay ranges. This government talks a lot about skills and building capacity and capability but that lack of pay progression has destroyed all confidence in the pay systems. Scotland and Wales have shown how things can be done differently but the Cabinet Office has been mired, first in ideological antipathy and then hopelessness, as they realise the consequences of what they have done.

It feels to many public servants that the government only rolls out the term “fairness” when things are gloomy in the private sector, although when the Chancellor brought in the pay freeze private sector pay growth was running at 3.5%. What will tight labour markets, higher inflation and buoyant private sector earnings growth mean for the civil service?

With the lifting of the pay cap and budget increases the government has set what looks like quite a permissive spending envelope. Departments,  and their ministers,  have a duty to civil servants to make the most of this leeway,  bring to an end to a decade of pay cuts and work with unions to reform pay systems that are fundamentally broken. This government is keen on dissociating itself from the past. This is its opportunity to invest in pay systems that support and reward the skilled staff they need to build the public services that defend, protect, support and enhance all of our lives. We will hold this government to account.

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