Garry Graham: Latest Treasury civil service pay guidance is not fit for purpose

New pay guidance for the civil service shows why the government must adopt a more sophisticated approach to pay and reward


By Garry Graham

24 Apr 2017

In maintaining the 1% cap on pay increases in its latest pay remit guidance for the civil service, published just before purdah, the Treasury has failed to address the needs of hard-working civil servants.

Civil service numbers have been slashed by 26% since 2006 and today’s service is smaller now than at any time since 1939. This is putting the people working in it under unprecedented pressure.

This is folly when you consider that the government is facing unprecedented challenges – not experienced by any administration in peace time – and is relying more than ever on the civil service to deliver.


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The National Audit Office has expressed serious concerns about whether the civil service has the capacity and skills to deliver Brexit, a range of crucial infrastructure projects for the UK and broader policy initiatives.

The Public Accounts Committee and the Public Administration and Constitutional Affairs Committee are expressing similar concerns in their current investigations.

Existing staff face a tsunami of work – 75% of them believe they would be better paid doing similar jobs elsewhere.

Almost a quarter want to leave either immediately or in the next year.

More than four in ten (42%) do not have a manageable workload and a third are struggling to achieve a reasonable work life balance.

Pay

Our members’ living standards have been reduced by between 15-20% since 2010.

At best, many civil servants feel that they have been taken for granted. On a bad day, they feel that they are being treated with disdain as they see their pay, terms and conditions attacked and eroded.

Civil service pay has been treated as a political football for far too long and has become a crude arm of macro-economic policy with a slavish adherence to the Treasury’s arbitrary 1% cap.

Pay increases in the private sector have significantly outstripped increases in the public sector since 2013 – a trend that is set to continue unless there is a fundamental rethink.

Combine this with rising inflation, an increasingly competitive labour market, employers vying with each other to recruit the staff they need and you have a perfect storm.

This government holds up the private sector as an example of best practice. But no private sector employer would take this government’s approach towards its staff and believe that this is the route to corporate success.

In the private sector, the human relations debate is about the “battle for talent”. The government needs to fundamentally rethink how it treats its staff in order to recruit, retain and motivate the skilled professionals, managers and specialists it needs.

Civil service employers are unable to compete effectively for the skills they need – that’s why they have to rely on private sector consultants and contractors, and the guidance is not fit for purpose.

Trade union officials don’t usually quote Margaret Thatcher – but in the long term you really “can’t buck the market”.

In terms of capacity and capability, the civil service is on a cliff edge – and this year’s pay guidance brings it that bit closer.

The challenges for the new government after 8 June are clear. In order to break the cycle, government must abandon the 1% pay cap and set up a truly independent review of civil service pay.

This would include an assessment of the growing gaps in the rates paid for comparable jobs in the private sector. In short, an evidence-based policy.

Read the most recent articles written by Garry Graham - Garry Graham: As the pay freeze ends, ministers must enact real reform

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