The government has revealed plans to reform the pay framework for the Senior Civil Service that would base salaries on professional groupings and would reward "high-performing" officials and encourage people to stay in their jobs longer.
The Cabinet Office’s submission to the Senior Salaries Review Body sets out a long-term vision for the future SCS pay system alongside its call for pay restraint in the 2018-19 award.
The document states that the government has said it will allow pay review bodies across the public sector to take a “more flexible approach to public sector pay to address areas of skills shortages and in return for improvements to public sector productivity”. However, it reiterated that the last Spending Review budgeted for a 1% average increase in basic pay, a limit that has been in place since 2012.
The Cabinet Office acknowledged that this limit has meant that promotion is seen as the only way to obtain a pay rise, reiterating comments made by cabinet secretary Sir Jeremy Heywood to MPs last week, while departments bidding for talent in an "internal market" within the civil service has also led to unnecessary or premature movement of senior officials. This has led to both reduced efficiency and lower productivity, according to the submission, while in some professions the civil service is unable to compete for scarce, specialist skills.
As a result, the government indicted that it wants to move towards a new SCS pay structure based on three key changes, after the SSRB last year called on the government to undertake a fundamental review of the SCS pay framework.
The new proposed principles are: pay rates should be consistent for professional groupings over time; there should be greater reward for high performers and those who build skills in specific roles; and clearer rules on how people can move around the SCS pay system.
New groups for senior civil servants would be created for both deputy directors and director roles as part of the pay plan. Group A would be the majority of civil service professions, while a small number of what the document calls “market-facing” professions would be eligible for higher "guideline" pay ranges in Group B.
Previous government pay reviews have indicated such roles would include accountancy, IT, legal and audit, and the Cabinet Office stated that the areas covered would be confirmed in 2019-20. The submission stated these professions could be given pay scales similar to the better terms offered to senior commercial specialists following the creation of the Government Commercial Organisation.
Another scale would exist for a Group C, which the review said would apply to niche, specialist roles, particular to just one or a few departments. Such positions could include roles in medicine, inspectors of education and tax professionals, according to the document.
For directors general, the government has proposed a move to an entirely different pay structure, similar to the current structure used for permanent secretary pay, based on three "tiers" with significantly shorter pay ranges (tier one: £115,000-£135,000; tier two: £135,000-£150,000; tier three: £150,000+). There is currently a 20% difference in median salary between the highest and lowest paying departments at director general level. The change would be intended to “radically reduce pay disparities at this grade, whilst recognising the different scope and skill sets required by different roles”.
The SSRB is invited to comment on this general approach to pay awards from April 2018, and also the plans to introduce greater reward for staying in jobs for longer. The document stated it wanted to encourage civil servants to build expertise and capability while remaining in post by expanding the current departmental flexibility for an in-year contribution award. Currently, 10% of staff can be provided with an award, and it proposes increasing this to 20%, within existing cost controls.
It also proposed the creation of small bonuses (around £1,000) in a “corporate recognition scheme" to reward exceptional contributions to cross-government initiatives that go above and beyond their day-to-day roles.
For 2018/19, the Cabinet Office has sought specific proposals from the SSRB on how to maximise the effectiveness of existing SCS consolidated and non-consolidated funding. In future, the government would seek to create “a sustainable way to enable movement through pay scales based on growth in competence through development in role”.
Some of the funding for these recognition bonuses would be freed up from controlling movement around the system. The submission stated that “the current policy on pay on level transfer and promotion is no longer working effectively, given recent changes to external recruitment policy for SCS roles, where all roles are now advertised externally as default”. Some, but not all, departments are currently following a policy where senior civil servants can get pay increases on movement within the system or increases above 10% on promotion.
"SSRB is invited to comment on this policy change, in light of the government’s overall proposal to use pay bill more efficiently and ensure the right incentives in the SCS pay system overall,” it stated.
Responding to the plan, FDA assistant general secretary Naomi Cooke said that the government was adept at listing the many problems that exist in the current SCS pay structures – inconsistent link between pay and performance, recruitment and retention problems, frequent cases of SCS being paid less than the staff they manage – but it failed to recognise decisive action is needed.
“Last year the SSRB asked for a ‘fundamental review of SCS pay’, but this evidence represents political cowardice from the government, offering vague long-term commitments in place of the meaningful reform that is needed,” Cooke added.
"Far from an evidence-led workforce pay strategy, slavish adherence to a rigid cost envelope reflects the exact same approach adopted for most of the last decade.
“The fact that not one more penny has been allocated means the 1% pay cap has been scrapped in name only and our members will once again fail to see a meaningful rise in their pay.
"This grudging approach speaks volumes as to the lack of urgency and lack of regard the government has for its own staff."
Prospect deputy general secretary Garry Graham said he was “deeply disappointed in the lack of ambition and pace in the Cabinet Office proposals and recommendations to the SSRB”.
Despite assurances about an end to the 1% public sector pay cap, the Cabinet Office proposals seek to slavishly work within its confines, he said
“The proposals with regard to bespoke pay ranges for professional groupings do have merit - but need to go wider than the areas identified to cover engineering, science and other professional disciplines. Crucial to this is transparency and the Cabinet Office has refused to share with us the bench mark data they use."
"At its heart, however, is the fact that if the Cabinet Office want a pay system that will command the confidence of staff and to be market facing to allow it to recruit and retain the staff that they need – it will not be able to do that within the 1% cost envelope they have set themselves."