Capability-based pay, milestone-based rewards and the five-year strategy: everything you need to know about the Cabinet Office’s plans for SCS reform

Submission to the Senior Salary Review Board reveals a suite of new proposals to help keep top officials in their posts
The Cabinet Office has unveiled new plans to tackle staff turnover

By Tevye Markson

19 Apr 2022

Minimum assignment durations and milestone-based rewards are among the latest plans to tackle high turnover among top officials – here’s what you need to know about what the government’s latest evidence to the Senior Salaries Review Board means for senior civil servants.

The government submitted its yearly evidence to the Senior Salaries Review Board, which makes recommendations on senior civil service pay, on 6 April, outlining its proposed reforms to pay and reward for top officials.

As CSW reported earlier this month, the proposals include increasing SCS pay by an average of 2-3% for 2022-23, after last year’s pay freeze, in line with the pay increase planned for lower grades.

The plans also include addressing pay anomalies and increasing wages for staff lower down the pay range who are demonstrating higher capability, as well as increasing the minimum salary at each band.

The Cabinet Office’s evidence also includes an update on plans to overhaul the SCS performance management system, which have been under way since 2018 but once again been delayed.

For now, the government has gone ahead with new controversial new guidance saying 5% of SCS should be marked by departments as underperforming, which was introduced on April 1.

But the key theme in the submission is addressing churn among senior officials, with the Cabinet Office unveiling plans for two new policies to keep top civil servants in their roles for longer and giving an update on delayed plans to introduce capability-based pay progression.

Here's what you need to know about the new proposals to reform SCS pay.

Addressing civil service churn

The Cabinet Office has recognised that high turnover is an issue in the SCS which impacts on the delivery of major government projects, referencing concerns raised by the Institute for Government in its evidence.

The IfG’s departing director Bronwen Maddox warned that civil service churn is a ‘core part’ of government’s long-term problems at the think tank’s annual director’s lecture in February.

The Cabinet Office has come up with two new plans to tackle the problem.

The first, setting minimum durations for job holders, would mean all newly advertised SCS roles across government will have a set assignment duration. The minimum timeframe for all roles will be set according to either the timeline of major projects they will be working on, or the requirements of their department’s Outcome Delivery Plan. 

There would be scope for exceptions to assignment durations in line with business requirements and to take into account personal circumstances. 

The minimum duration would not be contractual but instead "be driven by a change in culture”, the evidence says.

The Cabinet Office is also working on “milestone-based rewards”, to incentivise senior officials to stay in their roles for longer and for the full duration of important projects they are working on.

This would effectively be an expansion of Pivotal Role Allowances, a policy introduced in 2013 which allows departments to offer bonuses to retain senior officials working in highly specialised roles or delivering the riskiest major projects across government.

Departments would be able to agree a bonus up front with a senior civil servant based on the successful delivery of a particular project or key milestone. This would be for projects where the delivery end date is several years away but high priority enough to warrant the individual staying in post until its completion. 

The Cabinet Office is not ready to submit proposals for milestone-based rewards yet, however. 

“We recognise that we will need to work through the practicalities of this approach in more detail, so will return to the SSRB next year having tested the viability of this proposal in a few departments first,” it said in its evidence.

Capability-based pay progression

Another policy aimed at stopping high turnover is capability-based pay progression, which has been in the works since 2018 – but the evidence indicates we are unlikely to see these reforms introduced until at least April 2023.

The Cabinet Office said it is still investigating how the system, which aims to reward officials for developing skills and expertise rather than requiring people to change jobs to get pay rises, will work. 

The government delayed introducing capability-based pay last year due to economic uncertainty and instead piloted a version of the system in six departments in 2021-22: the Ministry of Justice, Department for Work and Pensions, Department for Transport, Department for Education, Department for International Trade and Submarine Delivery Agency.

Evaluations of the pilots – which aimed to test how officials interact with the capability assessment process and identify any issues with the system – is set to be completed by the summer.

“Whilst they’re piloting a process in order to assess capability, how that then converts into pay is still unknown to us,” Thirlby said.

“We need to know how that's going to manifest itself to know whether or not it is going to deliver any outcomes for the senior civil service.” 

Thirlby said the FDA also has concerns about whether capability-based pay will be “performance management mark 2”, referring to a forced distribution system which was scrapped in 2019. The system encouraged managers to mark 10% of their staff as performing poorly, with 25% marked as performing well and the remaining 65% as middling.

A Cabinet Office spokesperson said: “The introduction of a capability-based pay progression system remains a key priority and is an action set out in the Government Declaration on Reform.”

The Cabinet Office said it will give further details to the SSRB on progress with capability-based pay at some point during 2022-23.

Five-year reform plan

The government has been working on a new strategic vision for the SCS but this has been delayed so its impact can be maximised, the Cabinet Office said in its evidence.

The Cabinet Office started work on the SCS Strategic Plan last year, which sets out four key priorities for reforming the SCS: improving skills and capability; attracting new talent, setting clear leadership expectations and improving identity and community. 

The plan, which the Cabinet Office said will be published sometime this year, aims to help achieve the Declaration on Government Reform’s goal to build a skilled, innovative and ambitious SCS equipped for the future. 

The Cabinet Office says the plan "lays the foundation” for reforming skills, porosity (movement between the civil service and other sectors to share skills, expertise and knowledge and build better relationships) and accountability. 

Thirlby said the details shared in the evidence were promising, but said she was “slightly cynical that it will all come together”.

“Although it does feel like they are looking more holistically at the SCS as a workforce, which is good,” she added.

The update also reveals the Cabinet Office's plans to pilot new criteria which would decide the standards of digital capability and confidence that non-Digital, Data and Technology Profession senior officials at SCS1 and SCS2 level will soon need to demonstrate, expanding on comments made by the head of the Fast Stream at Public Technology Live last month. The pilot was due to get underway in early 2022, according to the submission.

A Cabinet Office spokesperson said the evidence shows the government's vision for the SCS pay framework, which aims to "attract, retain and develop the very best senior talent for government, while ensuring pay remains affordable”.

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