The Cabinet Office has paused plans to introduce a scheme aimed at reducing high turnover among senior civil servants.
Last year, the department revealed in its evidence to the Senior Salaries Review Body that it was working on “milestone-based reward”: a policy to incentivise senior officials to stay in their roles for the full duration of important projects they are working on.
But the scheme has now been halted due to pressures on resources and competing priorities, the Cabinet Office has revealed in its evidence to the SSRB, which makes recommendations on SCS pay.
Progress has also stalled on capability-based pay, another initiative targeting SCS churn that has been in the works since 2018, the department said.
Meanwhile, the turnover rate continues to rise. The rate of senior civil servants leaving government altogether has risen from 10.7% in 2020-21 to 12.4% in 2021-22. When including transfers between departments, it is up from 17.4% to 21.7% in the same period and within government it is now at 25.6%. The median tenure in post is around two years.
Responding to the evidence, Garry Graham, deputy general secretary of Prospect, warned that “no organisation can perform effectively with this level of turnover, particularly at senior levels”.
“Pay systems should reward knowledge, skills and experience and allow for meaningful pay progression,” Graham said.
But he said the “structural deficiencies within the SCS pay system and the pay systems for delegated grades are becoming increasingly stark” and progress has been “negligible” despite government acknowledging the issues.
The Cabinet Office has made progress on another scheme aimed at reducing turnover, however. It has introduced minimum durations for all newly advertised SCS roles – a plan announced alongside the milestone-based reward proposal last year. It has also implemented a new performance-management framework.
Meanwhile, plans to publish a new strategic vision for the SCS strategy have been put on pause, with the government focusing on implementing activities that will be part of the strategy and tracking their impact.
Competing priorities halt milestone-based reward proposals
In its submission to the SSRB for 2022-23, which set out its position on pay and related work policies for senior civil servants, the Cabinet Office said it needed to work through the practicalities of milestone-based reward in more detail. It said it would update the SSRB at a later date, “having tested the viability of this proposal in a few departments first”.
But the department has now said it has had to pause its review of non-consolidated performance related payments for senior officials, “including the potential introduction of milestone based reward”.
This is a result of “overall resourcing pressures and competing priorities”, it said in its evidence for 2023-24.
“It remains our intention to resume this work in future, when resources allow,” the department said.
Announcing the scheme last year, the Cabinet Office said it would allow departments to agree a bonus up front with a senior civil servant based on successful delivery of a particular project or key milestone, for projects where the delivery end date is several years away but high-priority enough to warrant the individual staying in post until its completion.
It would effectively be an expansion of pivotal role allowances, which were introduced in 2013 and allow departments to offer bonuses to retain senior officials working in highly specialised roles or delivering major projects.
In November, chancellor Jeremy Hunt instructed departments to reprioritise spending away from lower-value and low-priority programmes as part of an efficiency and savings review that has since concluded.
CSW asked the Cabinet Office if milestone-based reward was deprioritised as a result of this review but had not received a response at the time the story was published.
Capability-based pay
Meanwhile, long-running efforts to introduce capability-based pay progression for senior officials continue to stall.
The policy has been in the works since 2018 and is one of the 30 schemes targeted for implementation in 2021 as part of Declaration on Government Reform.
Last year, the Cabinet Office said it was still investigating how the system, which aims to reward officials for developing skills and expertise rather than requiring people to change jobs to get pay rises, will work. It held pilots between September 2021 and April 2022 to test it.
This year, the Cabinet Office said its “position has not changed”.
But as with milestone-based reward, resourcing is mentioned as a factor in the delay.
“It remains the intention to implement a capability-based pay progression system as soon as is practicable”, the Cabinet Office said.
“We continue to explore approaches to doing so, recognising that rollout of capability-based pay must be properly resourced in terms of departmental and central support and have agreed and transparent funding within the overall SCS award.”
The Cabinet Office said it will update the SSRB on its position on capability-based pay progression at the oral evidence session with the pay-review body.
In a recent update to the pay remit for delegated grades in 2023-24, the government said it would commit to making the introduction of capability-based pay for the SCS a ministerial priority.
Minimum durations for job holders implemented
Another scheme aimed at reducing SCS churn has been able to get over the line, however.
The 2023 evidence says the Cabinet Office has launched a new policy for setting assignment durations for permanent SCS 1 and 2 roles. This sets the expectation that assignments for directors and deputy directors will last a minimum of three years by default, with the exact length of time set by the employer depending on their project timeline or Outcome Delivery Plan.
The minimum duration is not contractual but "will instead be driven by a change in culture" , the evidence said.
The policy was being developed in early 2022, at which point the Cabinet Office said it would cover all senior civil servants.
CSW approached the Cabinet Office for comment on the new guidance but had not received a response at the time of publication.
The policy also includes exceptions to assignment durations "in line with business requirements and taking into account personal circumstances", the department said.
The Cabinet Office said it will evaluate the impact of the policy change on the length of time senior officials stay in post, which has been at the two-year median for the last five years.
Setting expected assignment durations on appointment for all SCS posts was another of the actions outlined in the Declaration on Government Reform for implementation in 2021.
Performance management
The Cabinet Office has also made progress with performance management changes, introducing a new framework that it said aims to strike a better balance between centralised and departmental responsibility.
The framework was due to be introduced in 2022-23, but delays due to ministerial changes and other factors meant it has until recently only been partially implemented, the Cabinet Office said. The full performance framework came into effect on 1 April.
It includes guidance saying 5% of SCS staff should be marked by departments as underperforming, which the FDA union has warned against.
The framework “aims to strike the right balance between prescription, i.e. central control and oversight of the performance management arrangements, and delegation, to allow departments to tailor these arrangements to suit their workforce context and align with delegated grades”, the Cabinet Office said.
The framework will also “address concerns over accountability, lack of transparency and meaningful reward in the existing performance management arrangements” and “ensure robust links between individual objectives and overall departmental priorities”.
The Cabinet Office said its focus will now move onto evaluating the impact of the changes.