The National Offender Management Service broke Treasury pay rules for civil servants for a six month period from last October by increasing the overtime pay rate for prison staff by £5 an hour, the agency has confirmed.
In NOMS’s annual report for 2016-17 – the last following its replacement with the HM Prison and Probation Service – the agency said that a “misinterpretation of HM Treasury guidelines and insufficient co-ordination between HR and Finance within the department to ensure compliance with HM Treasury pay policy” led to the increase in pay outside government rules.
The report, published last month, revealed that due to particularly acute staffing shortfalls in the third and fourth quarter of 2016-17, both overtime pay and incident response pay for prison officers was increased by £5 per hour from September 2016 to 31 March 2017.
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This “exceptional” adjustment was made to ensure safe and consistent regimes in prison but “inadvertently breached” the Treasury’s pay policy.
In addition, further recruitment and retention allowances were made available in February this year to 31 prison sites with “significant recruitment and retention difficulties”. The application of these allowances to existing staff was “a further inadvertent breach of government pay policy which occurred again, due to the misunderstanding of Treasury guidelines”, the review added.
Once the breaches became apparent, an internal audit was commissioned by MoJ permanent secretary Richard Heaton, but following this and submission of a retrospective business case to the Treasury, the finance ministry declined to provide retrospective approval for the payments.
“The internal audit review concluded that there were failings in governance but that these had been acknowledged by the agency and by the department,” the report added. “Concerted efforts have been taken to identify the circumstances leading to the breaches including a lessons learned exercise led by MoJ finance director [Mike Driver] endorsed by the chief finance officer [Andrew Emmett] and a detailed review of the Pay Remit and approvals process for the MoJ.
“The review made a number of recommendations to improve governance which are being implemented.”
In his audit statement in the report, auditor general and head of the National Audit Office Amyas Morse also highlighted that the announcement in February of recruitment and retention allowances for existing staff had also been made “without NOMS appreciating that this action would form part of the pay remit calculation”. As a result NOMS had not effectively consulted either the MoJ or the Treasury on the plan.
“Had it done so, the full implications of this decision may have been identified before the announcement was made and a breach of the pay remit may have been avoided,” he said. “This action added approximately £1m to the 2016-17 pay bill.”
NOMS said the National Probation Service caseload had increased by 5% year on year, which created significant resource gaps in parts of the country.
It said the gaps resulted in staff holding higher-than-average caseloads and an over-reliance on agency staff, while the plan to increase probation staff numbers by 900 was proving “challenging”.
The report comes as the Ministry of Justice was accused of taking prison officers out of jails and moving them to jobs in Whitehall in order to implement the department’s reform programme.
Despite the increase in caseloads, core operational performance had been sound throughout the past year, the report said.