Civil servants could be in line for a pay rise of up to 2% this year, the Cabinet Office has said, in guidance that also invites departments to make the case for higher increases where needed to help them recruit and retain staff in competitive roles.
The pay remit guidance, published this afternoon, says that this year departments will be given the flexibility to award civil servants an average 1% pay rise on top of the average 1% budgeted for in the current Spending Review period. This is an increase from the 1.5% under the 2018-19 guidance, which like the 2% announced today was set an average, meaning individual civil servants’ pay awards could vary depending on where each department decides to target increases.
“It is for organisations to target their pay award based on their own workforce and business needs,” the guidance explains.
The guidance, published on the gov.uk website, sets out pay arrangements for all civil servants in central government departments, non-ministerial departments, agencies and arm’s-length bodies in 2019-20.
Each department will decide whether to award the full 2%, “provided it is affordable within budgets and will not impact on the safe delivery of public services”, according to the guidance.
Departmental budgets set in the last Spending Review only cover half of the proposed award – an across-the-board increase of up to 1%. Departments that want to top up the total to 2% must match that funding themselves. They can use recyclable savings – money saved when civil servants leave the organisation and are replaced by someone on a lower salary – to help pay for this, the guidance says.
Any department that wants to increase across-the-board pay by more than 2% will have to submit a business case to the Cabinet Office and the Treasury. They may be able to argue the case to award bigger pay rises if they are needed to address recruitment and retention issues, or if they are needed for “transformational workforce reform”, changes designed to increase productivity in a way that will save the organisation money, the guidance says.
Departments will also have the option to submit a business case to use non-consolidated pay pots to fund consolidated pay increases above the 2% limit.
Organisations that already have arrangements in place outside existing pay guidance – including through multi-year pay awards – are excluded from today’s update.
That means the 2% guidelines published today will not apply to the Foreign Office, which reached a bespoke deal in March to increase pay by 6.4% over a 28-month period starting in April, and the Department for Work and Pensions, which agreed a four-year deal in 2016.
The guidance does not cover progression pay, and departments will still be able to promote staff members up through existing pay bands as well as awarding the overall pay rise.
Although higher than last year's 1.5% award, trade union representatives criticised the settlement, which comes after the 1% pay cap was in place from 2012 to 2018.
Garry Graham, deputy general secretary for Prospect, said the 2% settlement would look “grudging and hypocritical to many”, in light of the 2.7% rise given to MPs in February.
Graham welcomed the flexibility offered in the guidance to use recycled money and use non-consolidated pay pots to help fund further pay increases, and its “recognition that structural issues such as a lack of pay progression need to be addressed”.
He said that the union would be encouraging employers to “be ambitious” and submit guidance-busting business cases. “The anger of members and their determination that things need to improve should not be underestimated. We will hold the Cabinet Office and employers to account,” he said.
“As we launch into the bargaining round, the proof of the pudding will be in the eating. Will the Cabinet Office be as flexible as they suggest? Will organisational leaders step up to the plate and press for a fair deal for the staff they purport to lead?”
FDA general secretary Dave Penman said that at a time when the government and country is relying on the civil service like never before and earnings across the economy are rising at 3.4%, it was “unforgivable that civil servants will once again be languishing at the bottom of the public sector pay league”.
He added that while the Cabinet Office had engaged more with the unions this year compared to 2018, when the pay award was subject to a judicial review by the FDA, Prospect and PCS unions, it was the outcomes that matter
“Long-term uncompetitive pay levels only threaten the government’s ability to deliver Brexit and essential public services,” he added. “It’s time to remove civil service pay from the annual political bun fight that characterises the current remit process and introduce an independent pay review body for the whole civil service.”
PCS general secretary Mark Serwotka criticised that the basis for the award remained the 1% pay level budgeted for in the 2015 Spending Review, at a time when some civil servants are already struggling on low pay.
“It is disappointing to see the Cabinet Office not make a case for their own staff to get more money, when other public sector workers have had the pay cap lifted,” he said.
“We are continuing to make preparations for another national ballot on pay and our delegated bargaining units will examine the detail of the pay remit guidance in their areas.
“If they feel they want to take industrial action, we will support them fully.”