Prime minister Rishi Sunak views the introduction of a new performance-related pay regime in the civil service as a way to reduce the number of promotions that result in officials gaining pay rises, sources have told a national newspaper.
Cabinet Office minister Jeremy Quin is currently leading an efficiency review that is predicted to lead to the introduction of a new capability-based pay regime for members of the Senior Civil Service, as promised in 2021’s Declaration on Government Reform.
Last month Quin told an event hosted by the Policy Exchange think tank he is ”determined to deliver” pay-progression reform and has “no problems with us paying civil servants more for being more productive, more capable of ensuring that the taxpayer gets a better deal”.
At the time, the Cabinet Office said ministers wanted to see the introduction of capability-based pay for the SCS “as soon as is practicable” and that approaches were being explored to make sure its rollout is “properly resourced” and “transparent”.
No.10 is keen to use the introduction of a new pay regime to reduce the number of promotions handed to officials as a way of circumventing the caps on annual pay rises that have been a regular feature since 2010, according to the Daily Telegraph.
The newspaper said “senior government sources” had confirmed Downing Street is “very much looking at” ways to crack down on the over-use of promotions to get around measures designed to enforce pay restraint.
Separate sources told the paper that there was no justification for “automatic promotions” to be used as a loophole to increase salaries and that performance-based pay would see the most productive officials rewarded, regardless of their grade.
Quin is keen to explore ways to make sure the right metrics for productivity are adopted so that performance-related pay did not descend into a “box-ticking” exercise, The Telegraph story added.
The minister for the Cabinet Office told last month’s Policy Exchange event he was adamant that capability-based pay needed to be about more than the number of courses an official has attended or the qualifications they have obtained.
The Telegraph said Downing Street was concerned by “grade inflation” among officials and cited figures from last week’s update of the annual Civil Service Statistics showing that 2,050 officials were earning £100,000 a year or more as of March this year.
The figure represents a 15% hike on the 1,780 officials earning more than £100,000 a year in 2022’s statistics and an 88% rise on the number in 2016.