Department for Work and Pensions permanent secretary Sir Peter Schofield told MPs he is keen to maximise pay for the organisation’s officials two days after a strike ballot launched at the organisation.
Schofield was being grilled on DWP’s pay arrangements by members of parliament’s Work and Pensions Select Committee, against the backdrop of the PCS union’s ballot of members keen to secure higher wages.
“I want to pay my people as much as I can,” the perm sec told MPs. However, he said DWP had a “different structure” compared with other departments because of its proportionately higher number of staff at lower grades.
PCS has close to 50,000 members at the department working in job centres and service centres. It says 25,000 DWP staff are at the three lowest grades and will be on salaries pegged to the National Living Wage at the beginning of April this year.
The union’s ballot is open until 23 February and is being framed as an opportunity for members working at the department to signal their willingness to strike over “chronic low pay” and DWP's implementation of the 2025-26 pay award. PCS formally rejected the department's pay offer last year.
At last Wednesday’s session in parliament, Schofield was asked directly about the strike ballot and the background to it.
“I regret where we have got to with the PCS,” he said. “The pay agreement we were working through in the year we are talking about was 3.25% and the opportunity to spend an additional 0.5% particularly focused on colleagues on lower pay or where there were workforce issues.”
Schofield said that DWP had gone beyond such an increase for its lowest-paid workers.
“For our AOs there was a 4.1% settlement,” he said. “For EOs we did the full amount, 3.75%. We are restricted with the arithmetic in what we are able to do given the scale of the number of people in DWP who are in those lower grades, which makes it different from any other government department.”
DWP had a headcount of almost 97,000 at the end of March last year, according to the Cabinet Office’s annual civil service statistics – making it government’s biggest department.
Last week’s session heard that 76% of staff are at executive officer grade or below, compared to the civil service average of 49%.
Schofield said that the situation meant that the additional paybill increase allocated for staff at lower grades was spread more thinly than in other departments. He added that some departments could “take money from other grades” to improve rises for lower-paid staff “because they have more people in that situation” – but DWP did not have that luxury.
“Within any remit, the 0.5% spread across the low paid gives less because there are more people in the lower grades than other government departments,” he said.
The perm sec insisted that DWP offers competitive pay for staff at lower grades in comparison with other departments.
“Our pay in those grades compares very favourably already with many other government departments,” he said.
Schofield added that DWP staff can also take advantage of discounts at major retailers, such as Sainsbury’s and Tesco through a scheme that DWP is signed up to. He framed the discounts as an additional benefit of working at the department.
PCS said last year that it believes DWP's pay for staff at AA, AO and EO grades does not compare favourably with counterparts at the Cabinet Office, the Department for Education and the Ministry of Justice.
Pay business case 'would have required headcount reduction'
Schofield was asked why he had not applied to HM Treasury for an exceptional business case for additional funding to boost salaries for staff, as civil service pay remit guidance allows.
The perm sec said doing that would have resulted in the need to make redundancies at DWP.
“The Treasury is very clear that a business case has to basically fund itself,” he said. “You have to find a way of funding that through a reduction in the workforce elsewhere, and we do not have those plans yet to be able to make that commitment.”
Schofield said he hoped PCS members would vote against strike action.
“I hope that our people reflect on the opportunities they have in DWP and feel that they do not need to take industrial action, but I do value the work of our trade unions,” he said.
After the session, PCS general secretary Fran Heathcote said that blaming “structural issues” for persistently low pay was not helpful.
“If fair pay for the lowest-paid staff is always treated as unaffordable, then something is seriously wrong with the system,” she said. “Instead of accepting that, the government needs to change it.”
Heathcote added that discounts at retailers were not a substitute for better pay.
“Discounts don’t pay the rent or put food on the table for staff already relying on foodbanks to get by,” she said.