1. Pay in the civil service: challenges and opportunities
November 2016

2. Contents
Pay – what’s happened
Pay – what’s next
Prospect’s response

3. Pay – what’s happened
We are now six years into a near-decade of planned pay restraint
Average award limit
Other issues & interventions 0%
Still some progression (HO, DfT, BIS, CLG, MOJ, CO)
PCSPS contributions up; performance management 1%
Paybill control pilots in DEFRA + IPO (to )
All progression ended
National Living Wage introduced; NIC rebate ended

4. Pay – what’s happened Data presented here:
Grade maxima for key Prospect grades: G6, G7, SEO, HEO
National rates (not London)
Comparison of with July 2016
Note:
excludes the significant negative impact on “take home pay” of increases in pension contributions introduced over recent years
comparison of grade maxima does not capture changes to progression policy, making it harder or impossible for staff to reach maximum rates in many areas

5. Pay – what’s happened Maximum salaries for each grade
Grade maxima – core departments (unweighted average)

6. Grade maxima – core departments (unweighted average)
Pay – what’s happened Maximum salaries for each grade have seen very little movement
Grade maxima – core departments (unweighted average)

7. Pay – what’s happened Total increases over the period have been less than 5 per cent…
Cumulative change, to 2016

8. Pay – what’s happened …a significant cut when the rising cost of living is taken into account…
Cumulative change, to 2016

9. Pay – what’s happened …equating to substantial significant real terms losses in annual gross income
Real loss (RPI)

10. Pay – what’s happened Nominal increases have varied significantly across departments…
Cumulative nominal increase, unweighted average across G6, G7, SEO, HEO grades

11. Pay – what’s happened …and across grades within departments

12. Pay – what’s happened Salary maxima for the same grade across departments have become more dispersed, and relative positions have changed. For example:
Grade 6 maximum salaries, and 2016

13. Pay – what’s happened Some departments and bodies heavily dependent on off-payroll staff
Total off-payroll staff as share of total workforce (FTE); most recent figs at 10/2016

14. Pay – what’s happened …especially “specialist contractors”
Specialist contractors as share of total workforce (FTE) ; most recent figs at 10/2016

15. Pay – what’s happened …and “interim managers”
Interim managers as share of total workforce (FTE) ; most recent figs at 10/2016

16. Pay – what’s happened
The “Pay Bill Control” pilots have added limited flexibility
DEFRA
some transfer from non-consolidated pay pot for bonuses and Box 1 performers into additional non-consolidated payments for ‘good’ performers
specialist pay pot (“Specialist Pay Lead”) open to bids from directorates to deal with specific recruitment and retention issues
Intellectual Property Office
additional monies and flexibilities have enabled increases above 1% as well as targeted restructuring of pay spans

17. Pay – what’s next Challenges
1% limit on average awards continuing to at least (probably)
National Living Wage + faster inflation could add to pressure
fiscal impact of any economic slowdown
Opportunities?
conclusion of Pay Bill Control Pilots in DEFRA & IPO
reforms to Performance Management? (pilots evaluated )
GSE Profession pay and reward review (next 6-12 months)
agreement of principles for post-2020 reward framework (March 2017)
Clear that any additional resources and flexibilities dependent on Treasury seeing strong business case with evidence base

18. Prospect response
Build pressure for more flexible and forward-looking pay policy:
map and assess changing civil service pay structures, including emerging responses to ban on progression and NLW
continue to highlight loss of competitiveness with private sector, risks of skills gaps and knowledge loss, and costs of off-payroll staff
canvas options for more strategic and systematic approach to civil service pay

19. Prospect response Promote our positive vision:
the future role of government and public services: Brexit, global shifts, technological disruptions, rising public expectations
the importance of skilled and professional staff, including managers and specialists, in the civil service and wider public services
challenges: uncompetitive pay, staff and skill shortages, lack of workforce planning, insufficient focus on training and career development
how Prospect is addressing the challenges:
strengthening professional networks and pathways
challenging restrictive pay policies
championing our members and the services they deliver

20. Questions and feedback welcome