Government’s pay offer to civil servants next year will "partly" take into account inflation, chancellor of the Duchy of Lancaster Oliver Dowden has said – but he has ruled out a resettlement of this year's 2-3% pay offer.
Pay remit guidance for 2023-24 will be put together “in the context of higher inflation and I would expect some of that to be recognised in the sort of pay settlement that we're able to give to civil servants,” the Cabinet Office's most senior minister told the Public Administration and Constitutional Affairs Committee this morning.
But he added: “Nonetheless, in determining the level of that, we have to be cognisant of the wider pressures on the public finances which ultimately can only be paid for by higher taxes or by increase borrowing or by savings elsewhere in government. Ministers have to, in straitened times like these, take difficult decisions."
And Dowden confirmed the government will make no revised offer for 2022-23 – despite widespread strikes, which unions have said will only be resolve if the government addresses this year’s pay crisis.
Inflation is currently 9.2%, far outstripping the 2-3% pay rise offered to most officials this year.
But Dowden said: “What we are currently considering is the settlement for this financial year that is about start, the 23-24 financial year.
“We are engaging with [unions] for this coming financial year but it's been a principle across government and I think a correct one that we can't start unpicking deals that have been previously agreed.”
Unions, however, did not agree to the 2-3% rise.
The civil service's biggest union, PCS, is still calling for a 10% pay rise for this year. Some 100,000 of its members have voted to go on strike over pay and other concerns.
Dowden said he wants to ensure that we government gets “the best possible deal for people working in the civil service” but would have to balance this against the “near unprecedented strains” on public finances.
“I would like us to be able to get a decent pay settlement, as I would do across all areas of the public sector, but that will have to be based on affordability through the affordability process that that we undergo with the Treasury,” he said.
Unions have called negotiations with the Cabinet Office so far a “farce”, however, saying no more money has yet been offered.
In a letter to civil servants in December, Simon Case acknowledged anger over pay in the civil service and said top officials were working with ministers and unions to improve pay “as a priority”. He referenced the as-yet-unreleased Civil Service People Survey for 2022, which revealed unhappiness with wages and a drop in morale.
Dowden was also asked how the government was responding to a PCS survey last year which found one in 12 civil servants were using food banks and more than a third had skipped meals due to a lack of food.
The Cabinet Office minister said he takes "very seriously the pressures on people on lower incomes" and would “expect” the government to “skew” settlements to give higher rises to those on lower incomes.
Dowden also pointed to the government’s energy bills support package for those on lower wages, adding: “The civil service is not uniquely exposed or uniquely immune to the wider cost of living pressures we have at the moment."
He also said he does not think the public “would expect civil servants to be at the upper end of public pay, particularly at a time when we have rapidly rising inflation”.
The minister added that the government would attempt to offer higher pay in return for greater efficiency, referring to multi-year settlements agreed with the Ministry of Justice.
In 2021, unions accepted a three-year 9.9% pay rise for MoJ servants in exchange for cuts to overtime rates and other changes to terms and conditions.