SCS pay ‘not enough to live on in London’, ex-cabinet secretary warns

Gus O’Donnell says a pay hike is needed to fix churn and boost diversity in the civil service

By Jim Dunton

23 May 2023

The civil service’s twin problems of churn and diversity can only be addressed by improving pay for officials – and even members of the senior civil service face financial straits in London, former cabinet secretary Gus O’Donnell has said.

Lord O’Donnell, who was the top civil servant in the administrations of Tony Blair, Gordon Brown and David Cameron, told an Institute for Government event this morning that “much higher pay” is the solution to slow inter-departmental moves and attract the right new entrants to the civil service.

Panel participants – who included former environment secretary George Eustice – agreed turnover of officials and ministers is a major problem facing the civil service. Last year,  annual turnover of officials was 8.9%, the highest rate since 2015.  According to figures in the IfG’s latest Whitehall Monitor report, internal transfers pushed the total figure for moves up to 13.6%. Ministerial churn has also been an increasing problem since the end of the coalition government in 2015.

O’Donnell said he had recently spent time in Singapore, where churn is not an issue – either for officials or politicians.

“One of the great things there, let’s be blunt about it, is much higher pay,” he said. “If you get much higher pay, you don’t get the churn in the civil service. Because we all know that the way you get promoted in the civil service is moving, so you’ve got to move to get better pay. If we had a better pay system, we wouldn’t get the churn.”

However O’Donnell said the issue of civil service pay – which has gained an even higher profile as inflation has soared to more than 10% in recent months – is not only a problem for rank-and-file officials.

“I’m really worried that, actually, you can’t live on a senior civil service salary in London and get a property,” he told the event.

The median salary for SCS members was £82,550 in February, against a median of £30,110 for civil servants in general, according to IfG research.

O’Donnell said he is particularly concerned about the implications for civil service diversity.

“A lot of civil servants looking at this, particularly when they’re not being supported, vote with their feet,” he said. “They’re really smart. They can get paid a lot more elsewhere. And that’s a tragedy when that happens.

“The only ones you’ve got left are the ones with the bank of mum and dad. And that’s not a diverse civil service. That’s not what we want.”

Returning to the theme later in the session, O’Donnell shrugged and asked: “If you’re going to have this as the kind of job that you can only do if you’ve got rich parents…. what do you expect?”

“A large number of ex-civil servants have just got out because various barriers got in the way of them doing what they want to do. And we need to look at all of those.”

George Eustice held a succession of ministerial posts at the Department for Environment, Food and Rural Affairs from 2013 to 2022 – latterly serving as secretary of state.

He told today's event that the only antidote to churn among civil servants is stability in departments’ ministerial teams – which he acknowledged has been lacking for almost all of his time in government.

“There’s been too much churn in the civil service. If the great strength of our civil service is that permanence, accumulated institutional knowledge, don’t churn your civil servants every two years. Try and slow down the churn,” he said.  

“By the time I left after nine years, I was in most cases onto my third or fourth generation of officials on each policy brief. And it fell to me to say ‘well, we tried that in 2014 and it didn’t work’. And that’s quite an indictment of what’s happening in the civil service – that you need a here-today, gone-tomorrow minister to perform that function.”

Eustice said the civil service needs to keep “good people” in place for five years or 10 years, “so they’ve actually got that experience and that knowledge”.

He said churn among ministers also leads to a “hopeless” situation where leaders are never in place long enough to get to grips with their brief, and puts officials in the position of questioning whether there is any point in getting them up to speed ahead of a rapid reshuffle.

“If civil servants know that that’s probably going to happen, there’s a natural tendency for them to think: ‘well, this one’s probably going to be gone in three months anyway, let’s put this one in the slow lane’,” he said.

“That’s very debilitating, and its not how the system should work.”

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