Unions warn of "selling off pension rights" in civil service commercial overhaul

FDA and Prospect argue enhanced salaries but thin pension offer for staff in the new Government Commercial Organisation will deter civil service interest and fail to attract real private sector talent

By Jim Dunton

31 Jan 2017

Civil service unions have criticised plans to boost the salaries of a new centralised pool of government commercial specialists by switching them to less generous pension schemes.

As Civil Service World revealed last year, the new Government Commercial Organisation aims to tackle longstanding concerns over the government's commercial capability by directly employing all senior government commercial staff at Grade 6 and above. It will oversee their contracts, training and development, and effectively loan the staff to departments to work for a limited time on commercial projects.

In a bid to help with recruitment and retention, the original proposals floated "higher base pay, a higher level of performance related pay and new defined contribution pension arrangements" for the several hundred staff expected to form the organisation's backbone.


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But unions FDA and Prospect have reacted with anger to a consultation on the reward package proposals which indicates that higher pay for staff in the GCO pool will come at the cost of pensions entitlements.

According to an FDA analysis of the offer, GCO staff accepting new terms and conditions could see their base salary rise by £12,200 to £27,500 a year depending on their specialist level.

But they would also switch from the civil service final salary pension scheme to a private-sector style defined-contribution package, with 3% employer contributions, and dramatically reduced redundancy entitlements.

“Even by stripping away all the decent terms and conditions built up over decades, the civil service still cannot offer pay rates that compete" – Naomi Cooke, FDA assistant general secretary

The FDA – which represents senior civil servants – and Prospect, whose members include a range of professionals such as engineers and scientists, said that despite recognising the need to redesign the civil service “offer” to attract more private sector commercial talent, the Cabinet Office had been unable to provide any benchmarking evidence to justify its proposed changes.

They warned that removing final salary pension provision while offering more competitive pay suggested that the new packages were primarily targeted at external candidates, despite the rates on offer falling short of those in the private sector.

FDA assistant secretary general Naomi Cooke said the proposals underscored the failure of senior civil service pay to keep pace with that of equivalent roles in the private sector.

“Even by stripping away all the decent terms and conditions built up over decades, the civil service still cannot offer pay rates that compete,” she said. 

“The FDA recognises the challenges that the government faces in recruiting marketable skills, but a piecemeal policy of selling off pension rights and reneging on commitments to universal provision is not the way to do it.”

Cooke said the union was concerned that the GCO proposals were “a much more cynical indication” that the government was planning to row back on key commitments for the whole civil service.

Garry Graham, deputy general secretary at Prospect, said expecting staff to trade decent quality pension provision for an increase to base pay was completely unacceptable. 

“The proposals potentially put the civil service in the worst of all possible worlds – not competitive on pay and not competitive on pensions,” he said.

“We are deeply concerned that staff wishing to build a career in commercial will effectively be forced out or debarred from being members of the Civil Service Pension Scheme. Clearly the GCO wants to recruit staff who are clever but not necessarily smart.”

Graham said the pension proposals were also out of line with the government’s policy of encouraging individuals and employers to make adequate provision for old age.

Read the most recent articles written by Jim Dunton - Scottish Government staff set for 3% ‘interim’ pay rise

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