Budget: New pay rules and efficiency drive

Two departments will pilot new pay rules which give them greater flexibility in spending their pay budget, the Budget announced today.

By Joshua.Chambers

19 Mar 2014

The Department for Environment, Food and Rural Affairs and the Intellectual Property office will trial the measure, where the overall pay budget is controlled for the organisation, rather than average pay awards.

This measure will give the departments greater freedom in deciding salaries, although there will still be demarcation between SCS pay and non-SCS pay, preventing pay from being totally skewed towards the senior grades. The change was recently called for by Sir David Normington, the first civil service commissioner. He said that greater “flexibility” in pay structures would allow departments to “attract a stronger field.”

However, a spokesperson for the PCS Union said: “We think everyone should be guaranteed a proper pay rise and increases shouldn't be left to the whims of senior management and discredited and unfair performance management systems.”

The Budget also announced that the Cabinet Office has been tasked with finding further savings in departmental administrative spending. “The chief secretary to the Treasury has asked the minister for the Cabinet Office to set out an ambitious new efficiency programme to deliver savings from 2016-17 and across the next Parliament, in time for Autumn Statement 2014,” it said.

Two agencies saw their funding increased: the UK Export Finance agency saw its direct lending programme doubled to £3bn, and interest rates cut to provide funding for firms bidding for overseas contracts. Meanwhile, the Environment Agency will have an additional £140m to spend on flood defences, restoring the condition of those that were damaged this winter. A long-term plan to protect against future flooding will be published in the autumn, the Budget said. Earlier this year, the UK Statistics Authority found that public spending on flood defences has been cut by £247m in real terms.

£42m will be spent over 5 years on an Alan Turing institute for analysing new ways of collecting, organising and analysing large sets of data. This is separate from the Open Data Institute, a body launched in 2012 and funded with £10m of government spending.

Note:This article has been updated following Treasury clarification that there will be demarcation between SCS pay and non-SCS pay in the pilots.

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