Departments have been given slightly more freedom to increase salaries for top talent in the senior civil service without ministerial approval.
The Treasury published updated guidance on senior pay controls, which sets out the conditions under which the chief secretary to the Treasury must sign off on pay packages for new appointments, alongside the Budget last week.
The chief secretary’s approval is needed for any remuneration packages worth more than £174,000 (or the pro-rata equivalent for part-time staff) or that include a bonus of more than £25,000.
Previously, departments did not have to go through this process if a candidate was to be offered a pay-and-reward package that was equal to or less than their predecessor in the role – or up to 2% more.
Under the updated guidance, departments can now increase the total pay-and-reward package by up to 5% without the CST’s approval.
When applying these exceptions, departments must base their calculations on the salary of the “last substantive postholder”, the guidance says – rather than interim postholders, who “may have varying terms and therefore may not be the correct benchmark for future appointments”.
The rules apply to new appointments – including secondments, temporary promotions and internal moves – to central government departments, non-departmental public bodies and public sector bodies “that have not been administratively classified by Cabinet Office”.
The pay controls “do not cap remuneration packages, rather, they ensure that scrutiny is applied to proposals above set thresholds”, the guidance says. “As a general principle, the higher above the threshold a salary is, the greater the level of scrutiny warranted.”
“We need the best people leading and working in government to deliver better outcomes for citizens and must ensure that the right people are workinginthe rightplaces withthe right incentives,” the guidance adds.
“To achieve this, we must draw on a more diverse range of experiences, skills and backgrounds; keep pace in areas of growing importance, including digital and technology, be clear-eyed about our priorities and what we expect people to achieve and appropriately reward those who excel.”
The new guidance comes just over four months after HMT upped the threshold for ministerial sign-off from £150,000 to £174,000. In its July update, the Treasury also also increased the point at which a performance-related bonus requires approval from the CST from £17,500 to £25,000.
Commenting on that update in the summer, a Treasury spokesperson said: “The previous threshold for senior civil servants’ salaries was set in 2017, and since then average pay across the private and public sector has risen.
“The new, below inflation, threshold rise would apply to a minority of senior civil servants and would be subject to rigorous scrutiny.”
HMT has been approached for comment on the reasoning behind the latest guidance update. It had not responded at the time this story was published.