Hammond ‘could link public sector pay rises to performance in Budget’

'If the chancellor wants to keep his excellent civil service, he cannot keep this restraint on public sector pay'


Unions representing civil servants have accused the government of trying to "hammer" public sector pay, following reports that across the board pay rises could be scrapped.

Philip Hammond, the chancellor, told ministers public sector-wide pay rises could be replaced with performance-related increases in a bid to introduce a more “targeted” approach to pay, The Telegraph has reported.

Chief secretary to the Treasury Liz Truss reportedly told the Cabinet pay rises should be determined by retention, performance and productivity.


An overhauled system could also entail greater regional variation in pay rises. Truss said those working in London and the Southeast should receive greater increases because pay in other regions is already more “competitive” with private sector levels.

She stressed that independent pay review bodies’ recommendations on pay were not binding, responding to ministers who have used these recommendations to argue for more funds.

Unions have vehemently opposed the proposals. The FDA union's assistant general secretary, Lucille Thirlby, said tying wage increases to performance or location was not a new idea and has been rejected by the Pay Review Bodies in the past.

"Civil service pay has been restrained for the last seven years. This year is no different – there’s just a new ceiling of 1.5%. No matter how you dress it up, the real issue is funding," Thirlby told CSW.

"If the chancellor wants to keep his excellent civil service, he cannot keep this restraint on public sector pay."

Garry Graham, deputy general secretary of the Prospect union, said the reports "show that that the government still don’t understand the damage their policies on public sector pay cause to our vital services".

“The civil service has already been singled out for particularly harsh treatment on pay,” he added. “The vast majority of staff are not covered by review bodies and even where they are, the review body’s recommendations are often ignored.”

FDA, Prospect and the Public and Commercial Services union brought a judicial review of Treasury guidance published in June, which effectively limited civil service pay rises to 1.5%, saying it was published without adequate consultation.

“With the government already in court accused of failing to properly consult unions on the pay remit guidance, it shows that ministers have no respect for staff working in government departments," said PCS general secretary Mark Serwotka.

“If these reports are true then it is yet another attempt to drive down wages and an insult to public sector workers."

Earlier this month the PCS said it would prepare a strike ballot after the Home Office imposed a 1.5% pay rise on its staff despite the judicial review.

The head of the department, Sajid Javid, was among the Cabinet members who had been reported to have lobbied the Treasury for more funds to boost public sector pay.

The home secretary has pressed for a bigger pay rise for police, who were given a 2% pay rise after the end of the 1% cap, but has come under fire for refusing to negotiate a bespoke pay deal for civil servants.

Dave Prentis, general secretary of UNISON, which represents public sector workers, said the proposals would “hammer” pay. “Public sector employees shouldn’t have to face yet more hurdles just to get a fair wage,” he said.

“So-called ‘regional pay’ is a complete non-starter for public sector workers, who have already seen the value of their wages fall massively under this government,” he added.

The reports follow a warning from Hammond in June that the government's £20bn-a-year boost for the NHS would leave no extra money for funding increases for other government departments.

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