1% rises for top public servants causing ‘demotivation’, ministers are warned
The below-inflation rise is in line with those received earlier this year by other groups including teachers and nurses.
The Government’s 1% cap on public sector pay rises is causing “frustration and demotivation” among some of the best-paid public servants and getting in the way of necessary workplace reforms, ministers have been warned.
The warning from the independent Senior Salaries Review Body came as the Government accepted the independent panel’s recommendation of a below-inflation 1% rise for Whitehall mandarins, judges, health quango executives and senior military officers.
The rise is in line with those granted earlier this year to frontline public sector workers like nurses and teachers, and comes at a time when inflation is running at 2.6% and ministers are coming under intense pressure to end pay restraint.
The SSRB said that the cap – in place since 2013 and due to continue until 2019/20 – was making it “difficult” for it effectively to do its own job of recommending pay structures which will motivate staff and help improve public services.
While it found no evidence of widespread recruitment and retention problems among senior public servants, it warned that the position could “deteriorate rapidly”.
Changes to pension tax were already having an adverse impact, it found.
Accepting the SSRB’s recommendation of a maximum 1% rise, First Secretary of State Damian Green announced a review of senior civil service pay which could see changes implemented as soon as April 2018.
Ministers will consider “innovative” proposals to target more cash at recruiting into hard-to-fill posts and attracting “people of the right calibre”, while keeping within the overall pay limit, he said.
But the FDA union, which represents senior civil servants, said that the 1% “straitjacket” should be ditched.
While welcoming the promise of a review, FDA assistant general secretary Naomi Cooke said: “Reform of senior civil service pay needs to be fully funded and it needs to happen soon – the current Government pay policy is failing and is doing so in a way that costs civil servants and costs the public dear.”
The bulk of the senior civil service are almost £14,000 a year worse off than they were in 2010 in real terms and earn 46% less than their private sector counterparts, while in the most senior director-level jobs, the pay gap with the private sector is as much as 71%.
In a report to ministers, the SSRB said it had found signs of “fragile morale” among senior public servants.
“Frustration and demotivation could already be damaging workforce performance and be a warning sign of future recruitment and retention problems.”
The SSRB said the Government had made “disappointing” progress on reforming pay to provide incentives for better performance and outcomes.
Instead, pay policy was characterised by “long periods of rigidity, followed by reactive responses to specific pressures”.
And it warned: “In the current context, it is difficult for the SSRB to operate effectively. If the Government continues to see value in having an independent body to advise on senior salaries, we believe that some serious reflection is required about how to make better use of it.”
Mr Green said: “We understand the need to ensure that we are able to recruit, retain and motivate staff with the right skills and experience.
“However, there is a trade-off between pay and jobs in many public services, and pay restraint is one of the many difficult choices the Government has had to make to help put the UK’s public finances back on track.”