The Cabinet Office has published this year’s pay remit guidance for delegated grades, setting an overall uplift of 3.5% for 2026-27.
Civil service unions have welcomed the headline increase, but have raised concern at a lack of movement on pay progression for delegated grades.
The pay remit sets the overall budgetary increase departments can make to salaries. Within that, departments determine how to target their pay award based on workforce and business needs, meaning individuals may receive a higher or lower award than the 3.5% overall figure.
The year's guidance says the government "wants to ensure that it is attracting the best and most talented to work for the civil service, valuing delivery and rewarding hard working staff fairly".
It adds that pay awards must ensure sustainability of public finances, deliver value for money for the taxpayer and consider economic conditions.
The 2026-27 remit encourages departments to “factor in their longer term workforce and reward objectives, including wider workforce priorities they are required to address over the current Spending Review period”.
It says departments have flexibility to target their pay awards “in a way which best suits their workforce needs, including any specific anomalies”.
“Departments may wish to consider how to utilise their pay award to align on cross-government issues, particularly where that may reduce the internal market for skills,” the guidance says. “In exceptional cases, departments may consider use of a pay flexibility case.”
Departments have also been told that they are expected to use the 3.5% remit to target reform in addition to making base pay increases.
"Departments who do not use the Increase to Remuneration Cost (IRC) for targeted reform but submit a pay flex business case must justify why the IRC was not used for reform," the remit says. "Exceptionally a department may wish to consider making a business case for pay flexibility where it can demonstrate higher pay awards in return for efficiency and productivity benefits to the department."
The remit also notes that departments “must ensure pay awards are affordable within agreed spending settlements, and be aware of the need to balance other budgetary pressures, with consideration of the wider economy and the government’s macroeconomic framework”.
The Cabinet Office said it will not consider pay flexibility cases for 2026-27 on capability-based pay or performance-based pay, but is "interested in ideas from reward practitioners from across the civil service on pay systems that use either performance, skills, experience, or the acquisition of qualifications in order to support government delivery or drive forward the Future Civil Service programme".
It said departments must discuss any ideas with the Cabinet Office and HM Treasury to inform how these ideas could inform the longer-term reward strategy.
The deadline to submit a pay flexibility case for the 2026/27 remit year is 31 October 2026.
Government seeks to address pay compression
As part of this year's pay remit, the Cabinet Office has announced a voluntary pay compression framework to allow departments to address issues affecting the lowest paid civil servants.
The remit says the Cabinet Office has been discussing pay compression issues with relevant departments for their AA-EO grades and equivalents. The issues have resulted from pay at those grades not keeping pace with rises in the National Living Wage.
"These issues impact departments differently and a specific Pay Compression Framework has been developed with the relevant stakeholders to address these challenges," it says.
Departments experiencing these issues can submit a pay flexibility business case designed to address compression, either individually or jointly.
If successful, the costs of the reform will be considered above the pay remit in line with the pay flexibility process, however HM Treasury will require confirmation of the total cost of all proposals.
Departments must fund this reform within existing spending envelopes in return for meeting specific reform conditions. Adoption of the framework is voluntary and departments will need to assess impacts within their departments, and work with trade union representatives based on departmental arrangements, the remit says.
Departments wishing to apply for the Pay Compression Framework will need to demonstrate their pay compression challenges up to and including EO, and how they will mitigate these challenges through the framework. They must also set out their future workforce plans for AAs, including plans to provide clear career advancement paths for AA colleagues.
Targeted flexibility for small bodies and specialist groups
This year's remit also allows organisations with a business case that will affect fewer than 500 FTE staff, e.g. a small organisation or a particular specialist group, to offer up to 1% extra above the 3.5% remit for that group.
These business cases can be approved by officials (at SCS level) and will not require ministerial approval, which should improve the speed of the approvals process.
'Significant' progress: Unions welcome pay remit but wish for more
Responding to the pay remit announcement, Fran Heathcote, general secretary of PCS, the civil service's biggest union, said: "While the outcome of talks does not represent sufficient progress to meet all of our demands on pay in a single year, it builds on the progress made in the previous years and takes us further towards our aspirations for members.
"To that extent, the changes we have secured are a welcome development, and I commit to members that I will do all I can to ensure that they quickly translate into much needed money in your pockets in the coming period."
Lauren Crowley, assistant general secretary at the FDA, which represents senior and mid-ranking civil servants, said the union is "pleased that the overall award of 3.5% compares favourably to the wider public sector and current inflation figures".
However, she expressed disappointment over the lack of pay progression for delegated grades, contrasting it to today's pay announcement for senior officials, which sets aside 1% of the paybill for pay progression.
“Pay systems across the civil service have been blighted by a lack of meaningful pay progression for almost two decades," Crowley said. "The ability to move up a pay band based on delivery, skills and experience should be a feature of any well-functioning workplace. Its absence has had detrimental consequences on morale, delivery and both attracting and retaining talent.
"The changes to senior civil service pay announced today are finally beginning to address this and have been achieved through sustained work and negotiation. However, pay progression for the rest of the civil service – the majority of our membership – has not yet been secured.
“Delivering pay progression for a much larger and varied workforce is more complex, but it is the top pay priority for this union, and we will be pursuing it with the same approach that has produced results for the senior civil service.”
Crowley welcomed the extra flexibility for specialist roles in this year's remit but said it "will not be enough to address the chronic challenges identified by multiple independent reviews, and it must be only the start of a sustained effort to improve pay for specialists so that government can recruit and retain the talent it needs".
Mike Clancy, general secretary of Prospect, the union for specialist, digital, technical and scientific civil servants, said the pay remit "is a welcome acknowledgement that the world has changed since the Spending Review last year and marks significant progress from the pay freeze imposed by the last government".
But Clancy also said the lack of pay progression for delegated grades is "disappointing", which he said Prospect has "long argued is an essential step in ensuring all civil servants are properly rewarded for the skills and experience they develop in their roles".