The government has revealed that it will begin to pilot elements of its wide-ranging reform plan for senior civil servants' pay this year, but has delayed the overall implementation of a new capability-based pay system until at least 2022-23.
The introduction of capability-based pay progression “continues to be the government’s main priority for the transformation of the SCS pay system”, according to the Cabinet Office submission to the Senior Salaries Review Body.
Under the proposals, which have been under development for a number of years, pay for senior officials will be determined using two assessment frameworks focused on professional skills and leadership. These assessments will group civil servants into three levels – developing, competent, and expert – with corresponding pay bands.
SCS1 and SCS2 proposed target pay rates
Implementation of the system has been delayed by plans for a pay freeze in 2021-22, the submission said.
A full launch will not be possible without "clarity" about future funding for public-sector pay, it added. “Therefore, the implementation of the full system will remain on hold until there is further clarity on funding for the pay year 2022-23 onwards."
Because of the delay, the government is exploring for a pilot of parts of the reformed system that will include "at minimum" the capability measurement model, in some government departments and professions.
|This would have the benefit of allowing an initial review of the effectiveness of the new capability frameworks and process for measuring capability before any pay structure is applied," the Cabinet Office said.
Overall, the “pace of movement” to the reform will depend on the economic outlook, said the ministry. Initial modelling estimates that if all officials in the SCS1 and SCS2 pay bands – deputy directors and directors – move to the target rate aligned to estimated current capability levels, the pay bill for officials will rise by £45m, or 7.1%.
Departments will therefore need additional funding to implement the new system, although the Cabinet Office submission said that there was a “significant opportunity for long term efficiency savings in the reduction of unnecessary churn and the incentivisation of expertise building” in the civil service.
“This is a key vehicle for both incentivising and rewarding the development of capability and depth of expertise whilst remaining in post, as well as addressing the current high levels of internal churn and the resulting loss of experience and institutional knowledge,” it said.
“Potential cost savings of a new system will be borne both from reduced recruitment and on-boarding costs, recycling saved consultancy spend, as well as a reduction in SCS numbers due to increased productivity associated with staff remaining in post and developing expertise,” it added.
The submission also revealed plans to extend the system to director generals, who usually fall in pay band SCS3.
“The approach taken at this grade will roughly align with that for SCS1 and 2 but with an even greater emphasis on leadership capability in assessments," the Cabinet Office said.
"The details of the system and framework for measuring capability at this level are being developed and will be shared with the SSRB in due course.”
The full submission, including a foreword from Cabinet Office minister Julia Lopez, can be viewed here.
Responding to the publication, Lucille Thirlby, assistant general secretary of the FDA union, said it is "deeply disappointing that the government has now reneged on its commitment to implement capability-based pay progression from April 2021, and is subjecting its workforce to a pay freeze".
She added: “The target pay rates identified in the government’s 2021 evidence to the SSRB are not fit for purpose. The findings set out in an FDA-commissioned Incomes Data Research report demonstrate that the proposed rates are completely out of step with their public and private sector equivalents and will not deliver sustainable, future-proofed pay bands even in the short-term.
“The SCS has been beyond patient with successive governments. The FDA therefore urges the SSRB to recommend that the government gets on with the job of resolving these systemic and chronic problems.”