Most civil servants are set to get a pay rise of around 5% this year, the Cabinet Office has said.
The department published the 2024-25 pay remit guidance, which is for civil servants below the senior civil servants, this afternoon. The guidance confirms that departments will be able to offer an average pay award of up to 5%, compared to the inflation rate of 2%.
Senior civil servants are also in line for a pay award of 5% after the chancellor announced in a speech in the House of Commons today that the government had accepted recommendations from all public sector pay review bodies for this year’s pay awards.
The government has not yet confirmed the details of the recommendations made by the Senior Salaries Review Body, which is the SCS pay review body. However, the FDA union – which represents the senior civil service – said the government has accepted a recommended 5% pay rise for senior officials.
Reeves said the decision to accept all pay review body recommendations was “the right decision for the people who work in and, most importantly, the people who use our public services, giving hard working staff the pay rises they deserve, while ensuring that we can recruit and retain the people we need”.
The pay awards will cost an extra £9.4bn compared to what the last government set aside for pay increases, the Treasury said.
Reeves said Rishi Sunak’s government “provided no guidance on what could or could not be afforded to the pay review bodies” ahead of their reviews. “This is almost unheard of, but that is exactly what they did,” she said.
The chancellor also set the pay decision in the context of last year's public sector-wide strikes, which included civil servants across government. "The last government presided over the worst set of strikes in a generation", she said. "This caused chaos and misery for the British public, and it wreaked havoc on the public finances. Industrial action in the NHS alone cost a taxpayer £1.7bn last year."
Alongside confirming pay decisions for 2024-25, Reeves announced that departments will have to find £3bn in savings this year by cutting 2% in back-office expenses, as well as slashing spending on consultants and communications.
The Treasury, meanwhile, has confirmed that it will scrap the previous government’s civil service headcount cap in favour of an "approach that ensures departments consider overall value for money in resourcing decisions".
In a document setting out how the government plans to tackle spending pressures, it also said the government "will develop a strategic plan for a more efficient and effective civil service, including bold options to improve skills, harness digital technology and drive better outcomes for public services".
More flexibility for departments
The pay remit guidance for delegated-grade officials says departments will be able to make average pay awards of up to 5%. Unlike last year’s pay deal, this year’s remit gives departments flexibility to decide how to target the pay awards.
The guidance says: “This 2024-25 pay remit year is the last of a three year spending settlement for departments. It is critical that departments consider which priorities are best addressed in the final year of the current spending review, and how these relate to and facilitate longer-term objectives and wider workforce priorities without limiting options under the next spending review.
“This year, departments have flexibility to target their pay awards in a way which best suits their needs. This will enable departments (and other organisations covered by its scope) to provide their workforces with a significant consolidated increase, whilst also providing flexibility to address pay anomalies or wider workforce issues, such as recruitment and retention challenges.
"Departments should have particular regard to such issues as addressing pay compression due to National Living Wage increases.”
In last year’s remit, for 2023-24, departments were also able to offer up to 5% but this consisted of up to 4.5% across the delegated grades plus 0.5% for the lower pay bands. Civil servants were also given a one-off £1,500 cost-of-living payment to break a strike deadlock after inflation soared to 11%.
The year before, the remit set an average pay award of 2%, plus an additional 1% where departments could successfully argue that the extra bump would help with staff retention, productivity or other priorities.
'A step in the right direction': Unions respond
Civil service unions welcomed the news but expressed a mixture of satisfaction and disappointment in their responses.
FDA union general secretary Dave Penman said: “This pay rise for civil servants is clearly the right decision.
“For too long we’ve seen pay eroded due to short-term decision making, with a broken pay system leading to record churn in the civil service and causing a crisis in recruitment and retention across the public sector.
“I appreciate that this announcement comes against a challenging economic backdrop, and some departments may have some difficult decisions to make to achieve the efficiencies outlined by the chancellor, but I welcome that the government has recognised that public sector pay must be a priority. If we want world-class public services then we must invest in the public servants that deliver them, and this announcement is the first step in the right direction.”
Penman added that there is “still significant work to do and the FDA will continue to engage with the government to improve the pay system so that it properly rewards hard work, attracts the skills and expertise we need, and provides the necessary progression to attract and retain talent”.
Mike Clancy, general secretary of the Prospect union, which represents specialists in the civil service, said the pay rise, along with the government’s decision to scrap Jeremy Hunt’s headcount cap, was a “welcome first step” but also raised the need to reform the pay remit process.
Clancy said: “While we welcome the significant improvement in real value, and relative position compared to other public sector workers in the recent past, it remains our view that the pay remit process is flawed and an irretrievably broken process.
“We have already indicated our desire to work constructively with ministers and officials to build a process that is fit for purpose and delivers fair rewards and progression.”
Fran Heathcote, general secretary of PCS, the civil service’s biggest union, agreed that the pay rise is “a step in the right direction” but questioned the decision to give officials a lower pay rise than other public sector workers.
"Our national campaign is continuing to win concessions for our members,” she said. “Having doubled the remit guidance last year, won a £1,500 lump sum and forced the abandonment of cuts to redundancy terms, we’ve now won a 5% pay rise, which is 3% above the current rate of inflation.
"However, while we see this as a step in the right direction, there’s no justification for civil servants getting less than some other public sector workers.
“Our hard-working members are the engine room of the country and they experience the same cost-of-living pressures as everyone else, so why should they receive less reward?”
Like Penman and Clancy, Heathcote also raised concerns about the pay system .
She said the government “missed the opportunity to adopt our proposals for dealing immediately with low pay and structural problems”.
Heathcote added: “While we welcome the change of tone and atmosphere from the new government towards the civil service, we want immediate talks to address all of our members’ issues.”