The government has been urged to lift the 1% cap on pay increases for all public sector workers after ministers indicated the restriction could end by giving pay review bodies, which do not cover most civil servants, greater freedom to bust the limits.
In a series of weekend comments after prime minister Theresa May indicated a willingness to end the cap, ministers said the review bodies – which recommend pay rates for the senior civil service, the NHS, teachers, the police, and the military – could be given greater freedom. This would allow the bodies to recommend pay increases to match the workforce needs in their sector, even if this was above the 1% limit.
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Under the current system, pay review bodies make recommendations on sector pay – although this is based on a Treasury mandate to keep increases within the 1% limit. For civil servants outside the SCS, pay policy is set separately for departments by the Treasury, which also follows the 1% cap.
Environment secretary Michael Gove said ministers should "listen to the pay review bodies" on what wages should be in different professions, while a source close to foreign secretary Boris Johnson said he "strongly believes" the government can offer an increase in a "responsible way".
This creates the potential for the review bodies to make pay decisions that differ from the Treasury guidance for civil servants in departments.
Public and Commercial Services general secretary Mark Serwotka said that any pay review “must include all public sector workers and lead to the cap being lifted for all of them”.
Nothing else would be acceptable, he said. “This quite obviously shouldn’t just be about pay review bodies. Many public servants, including the vast majority of the government’s own workforce, aren’t covered by them. The cap should be lifted from the whole public sector and all public servants should be given pay rises.”
One union source told CSW it was unlikely the government would set different remits for the pay review bodies from the rest of the civil service, as the Treasury set the guidance in all cases.
The publication of the mandate for the pay review bodies for the 2018-19 financial year are excepted within weeks, which would indicate any change in the government’s stance.
Treasury guidance for delegated rates outside the SCS was likely to follow next year, the union source added.
In addition, some bodies, including the Senior Salaries Pay Review Body are yet to publish recommendations for the current year as they were affected by the pre-election purdah period. However, their guidance remains based on the 1% cap.
Public sector pay, including for civil servants, was originally frozen for two years from 2010, followed by a 1% cap on annual pay rises. This is due – under pre-election Conservative plans – to remain in place until at least 2020.
The limit has been under increasing pressure after a poll found a majority of people supported ending it. The restrictions have also been blamed by prime minister Theresa May’s chief of staff Gavin Barwell for hitting Conservative support in the general election. Echoing this, former head of the civil service Lord Kerslake, has told CSW that the pay freeze had directly influenced voting decisions in the election.