The Cabinet Office has turned down a call from trade unions to award a civil service-wide pay rise amid the coronavirus pandemic.
Government departments will be to award average pay rises of between 1.5% and 2.5% for this financial year, according to guidance published by the Cabinet Office yesterday.
The guidance confirms that usual pay talks will go ahead, despite unions calling for them to be set aside amid the Covid-19 pandemic. Each civil service employer – some 250 in all – will negotiate its own pay settlement, within the parameters set by the Cabinet Office.
The Prospect and FDA unions wrote to Cabinet Office minister Michael Gove earlier this month to forgo the usual negotiation process, in favour of a “simple, fair” blanket pay offer.
As government focuses its efforts on tackling the coronavirus crisis, this process would create “a distraction that the service does not need”, Prospect general secretary Mike Clancy and FDA head Dave Penman said.
But in the pay remit guidance published yesterday, the Cabinet Office said departmental negotiations would “provide an opportunity to explore the complexities in funding a higher pay award and the trade-offs that may be required to ensure the award is affordable”.
The guidance says departments may make average pay awards of between 1.5% and 2.5% for 2020-21. It is up to departments to decide how much to increase their pay bill within that range, “based on their individual workforce requirements and affordability position”, the Cabinet Office said.
However, those offering awards of 2% or more must submit a cost-saving plan to a minister.
The “tangible outcomes-based plans” must include “milestones for progress against delivery of key long term priorities such as workforce transformation and improvements, including through automation, location strategy and addressing pay anomalies in their remit”.
Departments can use recyclable savings – the money saved when people leave and are replaced by lower-paid staff – to pay for the pay rise, the guidance says.
Departments can make the case for an average pay rise of more than 2.5% if they can produce recyclable savings to fund the top up.
In this case, they must submit a business case “demonstrating how this investment would be sustainably affordable in future years”, the guidance says.
Organisations can decide how to divide the overall pay increase between staff “based on their own workforce and business needs”.
All departments must ensure they pay staff the national living wage, which increased on 1 April. However, the cost of raising low-paid employees’ wages to this level does not need to be included in the headline pay rise figure.
The guidance stresses that as in 2019-20, departments may not move people up pay bands automatically based on time served.
“Departments should have now removed automatic progression pay based on time-served from their workforces and it should not be reintroduced. Any progression pay still in place in core departments or their ALBs not agreed through business case approvals will be in breach of government policy and must be notified to the Cabinet Office and HM Treasury immediately,” the guidance says.
“Going forward, departments should ensure that pay arrangements they put in place do not involve automatic time served progression pay, or create an entitlement for employees to receive automatic increments.”