Civil service pay rises ‘will retain broad parity with the private sector’, minister says

Paymaster general’s comments come as MPs hear multiple accounts of poverty pay levels among DWP officials
Paymaster general Michael Ellis in parliament on 29 November 2021. Screengrab: Parliament TV

By Jim Dunton

30 Nov 2021

A government minister has pledged that civil servants will see pay rises that reflect growth in private sector earnings over the next three financial years, following chancellor Rishi Sunak’s announcement that the public sector pay “pause” is to end.

Paymaster general Michael Ellis told a debate in parliament that he expected Sunak’s Spending Review commitment on public sector pay, “including that of civil servants”, to run for the entire period to April 2025.

“During this forthcoming period, these increases will retain broad parity with the private sector while continuing to be affordable,” he said.

“It is thanks to the strong recovery in the economy and in the labour market that Her Majesty’s government have been allowed to return to a normal pay-setting process.”

Ellis said his department, the Cabinet Office, was “assessing what the affordability position will be for departments to make pay awards going forward” ahead of the publication of pay remit guidance for 2022-23, which is due in the spring.

“I am confident that when we announce the 2022-23 civil service pay remit guidance, we will continue to strike the all-important balance between appropriate reward for hard-working civil servants and the need to live within our means as a nation and recover, as we need to do, from the economic impact of the pandemic,” Ellis said.

He was speaking towards the end of an adjournment debate on civil service pay, led by the SNP’s Chris Stephens – who is chair of the parliamentary group of the PCS, the civil service’s biggest union.

Stephens said a decade of pay austerity had seen civil servants’ living standards fall by around 20%. He read accounts from more than a dozen staff at the Department for Work and Pensions who gave graphic explanations of how the failure of their pay to keep pace with inflation had forced them to start using food banks, run up credit card debts and choose between heating their homes and buying food.

Stephens, who represents the Glasgow South West constituency, said ministers constantly changed their position on the issue of public sector pay when it suited them.

“If borrowing is up, they say that they cannot afford pay rises, and if inflation is going up, they say the same,” he said.

“Despite the squeeze on living standards, private sector wages are going up, but they simply ignore that comparator. The government need to stop doing this, and start taking responsibility for the welfare of the staff.”

Ellis’s response in the debate suggested future civil service pay rises would reflect trends in the private sector. However he also made reference to Office for National Statistics figures last year that he said showed the public sector median wage was £1,770 higher than in the private sector.

Ellis said the overall remuneration package for the public sector benefitted from a 7% premium compared to the private sector, which he said was driven by more generous final-salary pension schemes.

Call to end delegated pay-setting

Stephens said that if Sunak was sincere about lifting the public sector pay freeze he would place “no arbitrary cap on pay awards” in any civil service pay remit guidance and called on the government to end the “delegated pay system”, which makes pay-setting a department-level issue.

“On this issue, again, the government always change their position,” he said. “They claim they cannot direct departments that have delegated authority on pay, yet they persist in centrally mandating things that departments must do.

“For example, they instructed all departments last year to pay £250 to staff earning below £24,000 a year. It is therefore demonstrably the case that the government are the single source from which all civil service pay arrangements emanate.”

Ellis did not address the issue of pay delegation, but agreed to look at the case for reducing the number of separate pay negotiations taking place across the civil service,  which Stephens said numbered in the region of 200.

“The rationalisation of those issues is always worth looking at, and I will ask my officials to look at that aspect,” he said.

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