HMRC admission of pay crisis must lead to action, says union

Union says there is a need for increased funding across government to resolve "systemic" pay problems

Photo: Steph Gray via Flickr

The FDA union has welcomed an admission by the head of HM Revenue and Customs that pay reform is urgently needed to resolve a “crisis” in the department and said it would work with the department to implement changes.

Jim Harra, HMRC’s interim permanent secretary, told MPs this week that he was seeking to overhaul pay in the department, following years of stagnating wages.

Harra, who became perm sec at the beginning of the month, said he also wanted to tackle the “inbuilt unfairness” that meant some people doing the same job in the same office were being paid different rates, because the tax agency was unable to let them progress up pay scales.


Responding to Harra’s comments to the Treasury Committee, Loz Hutton, deputy president of ARC – FDA’s section representing HMRC employees – said he welcomed the “public acknowledgement… of the longstanding issues with pay and that HMRC are proposing action to address these”.

In a recent survey of HMRC employees, 95% told ARC they were either dissatisfied or very dissatisfied with the department's pay award for this year, which saw wages rise by an average of 2%. Just over three-quarters said the award had decreased morale.

Hutton said that the union "looked forward to working with the department to address the problems with pay”, and highlighted that: "these are the problems we have consistently raised both in pay claims and in discussions with the department for the last five years".

He also said there was a broader problem with pay across government. This summer’s pay settlement for the current financial year meant most departments offered pay rises averaging 2% to their staff – which unions have said is far too little after years of stagnating wages, amounting to real-terms pay cuts in many cases.

Departments were given the option to submit a business case to offer higher pay rises if they believed it was necessary to retain staff. However, not all those submitted have been successful.

“These problems are not limited to HMRC. There is a fundamental need for increased funding across all government departments to resolve systemic pay issues. They cannot simply be resolved by submitting a business case,” Hutton said.

“Having surveyed our members on pay, we look forward to putting their views to HMRC, and working with the department to address the problems with pay.”

More than half of the respondents to the survey – 54% – said they had seriously considered leaving the agency at some point in the last year, while 23% said they were "actively looking" for another job outside the organisation.

A PCS spokesman said the union had been warning for years that HMRC’s refusal to call for additional funding would lead to a pay crisis in 2020. “With the second-largest department facing 12,000 of its staff being stuck on the minimum wage, HMRC are gambling on PCS members giving up their terms and conditions, to cover the cost of meeting pay increases the department will be forced to make by law,” he said. “Our members have made it clear that they’re not prepared to agree to pay for their own pay rise.”

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