The Treasury's updated pay guidance for civil servants has told departments to limit average pay awards for government workers in 2018-19 to a maximum of 1.5% in a move that unions warned will “outrage civil servants”.
Unions also said the publication of the new guidance – which allows for average pay awards of between 1% and 1.5% but requires any increases above the new range to be “in exchange for plans to improve workforce productivity” – had been published "without any meaningful engagement with staff representatives”.
The guidance said the government “ended the across-the-board 1% pay award policy for public sector workforces in September 2017”, but that there was a continued need for pay discipline in the coming years to secure the affordability of services.
It said that “secretaries of state will now be able to offer higher pay awards [than the 1% budgeted in the 2015 spending review] where this can be afforded and in exchange for improvements to public sector productivity”.
A 1% cap on public sector annual pay rises has been in place since 2012, following a two-year freeze, though staff in sectors such as health, policing and local government, as well as civil servants working for the Scottish Government, have since been offered cap-busting raises. With the exception of the NHS, most pay rises announced so far have been funded from within existing budgets.
The guidance, which covers staff in departments, agencies and non-departmental public bodies but not senior civil servants, said: “This year, government departments will be able to make average pay awards within the new range of 1% - 1.5%.
“This is not a cap, it is an average award for department to target based on their own workforce needs and individuals may receive a higher or lower award than this.”
In cases where departments need to deal with “exception recruitment and retention pressures”, they may ask the Treasury for permission to reallocate up to 50% of the funds from their unconsolidated, performance-related pay pot. Departments are not allowed to redirect funds for additional consolidated pay, only for targeted initiatives.
“The FDA will be making sure that employers will not get away with simply nodding through the paltry pay rises set out in this guidance" – Lucille Thirlby, FDA
Specialist pay proposals were agreed in 2016-17 for roles in areas such as commercial, digital, data and technology.
While senior civil servants are covered by a separate system, involving the independent Senior Salaries Review Body, the guidance highlighted that senior staff have “an important leadership role in demonstrating the need for pay decisions to follow public sector pay policy”. Therefore, pay award decisions for the Senior Civil Service must follow the same principles outlined for the rest of government, it said.
Pay awards will now be determined by departments and signed off by secretaries of state, unless a department wishes to submit a request for pay flexibility – which must be approved by the Treasury.
FDA assistant general secretary Lucille Thirlby said the guidance confirmed that the pay cap was “very much still in force”.
She said: “Pay awards between 1% and 1.5% do not represent pay ‘flexibility’ as the government claims, nor do they recognise the huge challenges currently facing our civil service.
“In the crucial run up to Britain’s exit from the European Union and the big challenges ahead in delivering first class public services, civil servants should be valued for their commitment, dedication and hard work but instead are being treated as the poor relation of public services.
“The chancellor is covering his ears and refusing to face up to the reality that the current pay policy is not fit for purpose.”
She pointed to the recent NHS pay deal, which is worth 6.5% over three years, as a positive example of what can be achieved with genuine dialogue between ministers, employers and unions. In contrast the civil service pay guidance has been imposed “without any meaningful engagement with staff representatives”.
"We are clear that that where agreement cannot be reached on pay and our members wish to take action they will do so with the full support of their union" – Garry Graham, Prospect
Thirlby added: “It’s time ministers in the civil service stood up for their staff in the way that others have done around the Cabinet table.
“The FDA will be making sure that employers will not get away with simply nodding through the paltry pay rises set out in this guidance. Instead, we will be working with employers to ensure they submit business cases to the Treasury to shine a light on the need for a positive change of attitude.”
Prospect, a trade union representing civil service specialists such as scientists and engineers, compared the new range to current inflation rates of 2.2% (the consumer price index) and 3.4% (the retail price index). Since 2010, public sector works have seen an average real terms pay cut of 15% against RPI, it said.
Garry Graham, Prospect deputy general secretary, said that despite recent promises from the government to lift the cap the guidance “is nothing short of an insult to thousands of hard working public servants”.
He added: “This announcement will outrage civil servants but it will also anger their employers who are seeing the damaging effect that government pay policy is having on recruitment and retention of dedicated and hardworking staff.
“Prospect will be making this case to government and we are clear that that where agreement cannot be reached on pay and our members wish to take action they will do so with the full support of their union.”
PCS, the biggest civil service union which represents staff at lower ranks, has already begun balloting its members on strike action over pay, and has told government to expect up to 150,000 staff to walk out over the summer.
PCS general secretary Mark Serwotka said: “This is just another example of the governments broken pay promises.
“The Treasury didn’t even have the courtesy to discuss the pay remit with PCS before publishing it. They have even postponed two recent planned pay meetings.
“It is quite frankly insulting that the government continues to think that its own staff are worth so little and are expected to continue to struggle on another paltry pay rise.”