The government is aiming to announce next year’s civil service pay awards “as close to the start of the pay year” as possible, Pat McFadden has said.
In a letter to the Senior Salaries Review Body, officially kicking off the 2025-26 pay round, the chancellor of the Duchy of Lancaster said public sector workers "deserve timely pay awards", although he acknowledged that it is “unlikely” that public servants will receive pay increases by 1 April.
He said pay awards will be delayed due to the "knock-on effects from the previous government’s delays to the 2024-25 round", but that "by bringing the pay round forwards this year, we can more fully reset the timeline in 2026-27".
McFadden acknowleged that changing the timeline of the pay round "will present challenges for the SSRB", which makes recommendations on senior civil service pay. But he added: “I am sure you also share the government’s belief in the importance of returning to more timely annual pay processes, so I hope you will understand the necessity of doing so.”
In recent years, civil service pay awards have typically been announced after the start of the financial year on 1 April, and have sometimes not arrived in pay packets until several months into the year. In some cases, civil servants at delegated grades – who do not have a pay review body – have had to wait much longer, as each department must negotiate its own pay deal with unions.
The previous administration did not make any decisions on public sector pay before the 4 July general election. Later the same month, newly installed chancellor Rachel Reeves announced she was accepting the recommendations of public sector pay review bodies – including the SSRB, which recommended a 5% pay rise for the SCS – and published pay-remit guidance for delegated civil service grades at 5%.
To enable ministers to make timely decisions on SCS pay, McFadden has asked the SSRB to deliver its recommendations “at the earliest point that allows [it] to give due consideration to the relevant evidence”.
A similar letter to the SSRB from health secretary Wes Streeting includes similar wording calling for earlier recommendations on pay for senior managers in the NHS, suggesting ministers are keen to announce timely pay awards across the public sector.
McFadden said the government will publish its written evidence “as soon as possible” after the Budget on 30 October, which will set departmental budgets for 2025-26.
The Cabinet Office minister added that the Budget comes “against the backdrop of the challenging financial position this government has inherited, including a £22bn pressure against the spending plans set out for departments at Spring Budget 2024”, suggesting ministers may seek a level of pay restraint in the upcoming year.
McFadden added: “My department will continue to strive to ensure that the SCS is equipped to efficiently deliver the vital, high quality public service we rely on, whilst ensuring value for money for taxpayers.”
Soon after arriving in office, Reeves commissioned an analysis of the public finances that she said found a £22bn “black hole” arising from unfunded policy commitments, overspends and other issues. Reeves scrapped a number of spending commitments following the review, and both she and the prime minister, Keir Starmer, have said the Budget will involve “difficult decisions”.
As well as setting out ministers’ strategic priorities for the SCS workforce, including on pay, the government’s evidence to the SSRB will put forward specific proposals for permanent secretaries, he added.
Any recommendations the SSRB makes on perm sec pay will also be considered by the Permanent Secretary Remuneration Committee – an SSRB sub-committee on which the head of the civil service and the Treasury perm sec also sit.
McFadden also noted that the SSRB has a vacancy for a judicial member that needs filling “at the earliest possible opportunity to enable the SSRB to fulfil its role fully”. Sharon Witherspoon, a former judicial member, was appointed interim judicial member to the SSRB for a period of six months in April. The Cabinet Office closed applications for the five-year post on 13 September.
“I can assure you that my officials are working at pace to ensure that there are no further delays in that regard. In the meantime, officials will be working closely with the SSRB and officials within the Office for Pay Review Bodies to inform your discussions,” he said.