Departments warned Cabinet Office they would struggle to afford 1.5% civil service pay rise, court hears

Government reversed plan to disclose civil service pay figure to unions before announcement amid fear of leaks, court hears

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By Richard Johnstone

09 Oct 2018

Some departments had indicated that they would struggle to afford a 1.5% pay increase for civil servants ahead of the publication of Treasury guidance that set this figure as a limit for average increases, a court has heard.

The FDA, Prospect and Public and Commercial Services unions have brought a judicial review of the Treasury pay remit that covers over 400,000 civil servants. The guidance was published on 25 June, and unions argued it was produced without adequate consultation.

A hearing at the Royal Courts of Justice on Thursday of last week heard that union representatives last met Cabinet Office officials on 4 June, but Charles Bourne QC, representing the Cabinet Office, said that no promise on consultation had been made. The meetings were intended “to keep [the unions] in the loop as far as possible” but were not a negotiation, he said.

The court heard that departments had warned a 1.5% increase may not be affordable earlier in the year, and that the proposed 1%-1.5% increase was first agreed at a cross-government meeting on 28 February. This was signed off by chief secretary to the Treasury Liz Truss and minister for implementation Oliver Dowden around 26 March, and then went to Cabinet Office minister David Lidington around 22 June.


Bourne said the departments' warnings about the affordability of a 1.5% increase showed that consultation was unlikely to have made a difference to the plans. “It is highly unlikely negotiation would have changed anything,” he said. “It has never been the case that [the guidance] was irrevocable.

"When you look at the nature of it, and what was being said about it – when some departments said that would struggle to afford 1.5% – that is the foundation for us saying that it highly unlikely.”

The dialogue between the unions and the Cabinet Office did not amount to a public law duty to consult, known as a Gunning consultation, he said.

“Even on the claimants’ [the three unions] evidence, what took place was a dialogue about some of the issues, and unsurprisingly some feedback was reflected in the final text, but never any submission by government to the structures of a Gunning consultation,” Bourne said.

He acknowledged that government officials had been “selective about what they would share” with the trade unions, as they knew that they couldn’t, or believed that they shouldn’t, share everything that was going on in the run up to the publication of the guidance.

This included setting out the planned range of the pay increase, which was referred to in court as the X figure. The 1%-1.5% range put the civil service towards the bottom of the pay league table for public servants.

“It is quite hard to see what the unions should have said, over and above urging government to set the figure as high as they possibly could based on the resources available,” even if they had known the figure, Bourne said.

“What else would they say? They might or might not mention the possibility of industrial action, but we know that a fear of industrial action was here anyway. Submissions of this kind – 'make the figure higher as could be as affordable, this could lead to industrial action' – these are arguments that unions could make without knowledge of the X figure.”

Strike threat

The Cabinet Office decided not to share the planned increase with unions due to concerns that the figure would leak, despite inital indications that it would do so.

The decision came amid a PCS ballot for strike action in the civil service, which turned out to be in favour of action but ultimately fell short of the threshold required by legislation.

Bourne said that Cabinet Office minister David Lidington was concerned about the prospect of industrial action, adding: “One could criticise the officials for not realising that their intention to disclose the X figure in advance might be proposed by others in government – which is precisely what happened.

“But that doesn’t mean or wouldn’t mean that the change in direction was not proportionate. Just because officials fail to see a problem coming doesn’t mean it is not a real problem.”

Although he said the Cabinet Office acknowledged trade unions' objections to “officials saying one thing and then doing another”, he said that “it wasn’t arbitrary”.

“In the end it could be described as unfortunate,” he said.

However, Martin Westgate QC representing the unions said that they had a legitimate expectation of a consultation over the pay award that the government failed to meet.

He said that after meetings between the union representatives and the Cabinet Office “what all the claimants say is they believed they would be consulted on the X figure”.

The unions said that the government was obliged to consult with them before publishing the guidance, Westgate said. “The unions were led to believe they would be involved in consultation on the terms of the guidance, and on the basis of that they engaged on discussion, only to be told that as far as the defendants was concerned, that was pretty much pointless because the guidance had been set and agreed to [prior to the June meetings].”

Following the hearing, Mrs Justice Simler reserved judgement.

After the hearing, Prospect deputy general secretary Garry Graham said the case showed “unprecedented duplicity by government”.

He said: “Prospect was proud to stand with our colleagues in the FDA and PCS seeking to hold this government to account and seek fairness on pay for our members.

“After promising meetings over a number of months and committing to a positive and open dialogue – for the Cabinet Office to subsequently argue it was never their intention to consult with the unions is shameful. We look forward to sharing more broadly what we now know was happening behind the scenes when we can.”

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