The civil service pay remit system is “broken beyond repair”, Prospect general secretary Mike Clancy has said.
Today, the Public Accounts Committee raised similar concerns in a new report, urging the government to take action.
Speaking at an Institute for Government talk on public sector strikes on Thursday, Clancy said the pay system for delegated-grade civil servants should be replaced with a pay review body.
He also set out his priorities for this year's pay talks. Asked by CSW what is his priorities are for the 2024-25 pay deal, he said: “Our priority would be get as many people out of the civil service pay remit as possible, actually, quite honestly.”
Clancy accused the government of “mission creep” in adding public bodies such as the Nuclear Decommissioning Authority to the pay process and said arm’s-length bodies “are often trading funds which generate their own economic circumstances” and so shouldn’t be part of what is officially called the Civil Service Pay Remit Guidance.
Under the current system, the Cabinet Office sets the pay guidance for central departments and arm’s-length bodies, which then negotiate individually with unions, meaning there are around 200 separate pay talks.
Last month, CSW reported that Prospect had written to the paymaster general to request that trading funds be removed from the process and asking for a “rapid review” of the case for removing all other ALBs from the guidance.
Clancy said he is anticipating “a return to some form of austerity” this year following last year’s larger-than-usual pay rises, which came amid high inflation.
Last year, ministers tabled an improved deal for civil servants following months of strikes by unions, including Prospect and fellow civil service union PCS.
PCS, which is the civil service’s biggest union, has already begun balloting officials on further pay strikes, saying the government has refused to commit to inflation-proof pay rises.
Asked by CSW what the government needs to do to avoid more industrial action this year, Clancy hinted that more Prospect strikes could be in the offing.
“I think this is going to be probably another very difficult year where it is possible that a number of our branches will want to consider some form of action because they're going to be facing a very limited pay remit,” he said.
CSW also asked Clancy what system he would advocate for to replace the delegated pay-remit process in light of his comments that the current system for civil servants is “broken beyond repair”.
Clancy suggested delegated-grade civil servants should have a pay review body, like senior officials.
“It might seem strange, but I think we do have to explore a properly-constituted pay review body with maybe some of the processes that actually underpin the social partnership in healthcare,” he said.
He said “lots of pay review bodies have had a bad press because the government is able to decide to discard the analysis, and discard some of the recommendations” but that Labour – if it gets into power – “can’t…carry on with the current delegated system mess”.
Earlier in the talk, Clancy described a pay system that is “not fit for purpose” and that ministers “are prisoners of”, that “has declined in terms of quality of engagement, personal rapport, reciprocation and trust” and that is “run by the Treasury and actually about…cost control”.
“It's not about engaging on the needs of central government and its missions, whoever is the government of the day,” he said. “It's not about trying to deal with the unarguable issues of recruitment retention across a range of jobs in civil service.”
Clancy also pointed to the system’s “glacial timescales” which can lead to departments’ pay-flexibility cases taking up to two years to negotiate, the problem of grade inflation resulting from the lack of pay progression, and to the real-terms loss in wages of “20-odd percent” since 2010.
In its new Civil Service People Plan, published in January, the Cabinet Office promised to introduce a new pay and reward strategy this year for staff below senior civil service level.
Prior to the current system, there was national bargaining, which was scrapped in the 1990s and which PCS has urged the return of. Clancy said he does not think there will be a return to national bargaining, adding “I don’t think Labour is going to want it”, but he said the party – if it gets into power – has “got to do something different”.
“It's got to be around some sort of delegated pay body, probably for the delegates grades, [and] really look at the arm's length bodies who have got these private sector comparators,” he added.
If Labour wins the general election, Clancy said Prospect will want to speak to the party about these priorities.
Clancy also urged Labour to scrap the Strikes (Minimum Service Levels) Act 2023 introduced by the current administration, which aims to force some employees to work through industrial action. But he added that he thinks it is “a bad piece of legislation which is going to collapse under its own architectural incompetence”.
A Cabinet Office spokesperson said: "It’s important that civil service pay awards are both fair and affordable for the taxpayer.
"The 2023/24 pay award for non-senior grades represents the biggest pay increase in over 20 years, alongside a one-off payment of £1,500 – recognising the hard work and vital importance of Civil Servants – and public sector workers benefit from some of the most generous pension schemes available.
"This year's pay remit guidance will be published in due course and we will continue dialogue with unions."