Source · Select Committees · Public Accounts Committee
Recommendation 16
16
Accepted
Significant pay disparities between departments for same-grade staff create unhealthy competition.
Recommendation
Other longstanding civil service pay issues include the existence of pay disparities between departments for staff at the same grade level. For example, differences between the higher executive officer (HEO) pay band at the Department for Environment, Food & Rural Affairs (Defra) and HMRC mean that the highest HEO salary in Defra’s pay structure is £1,601 less than the lowest HEO salary HMRC offers.32 Additionally, as at March 2022, senior executive officer (SEO) median salaries varied by up to £6,100 across departments.33 Pay disparities can lead to unhealthy and unproductive competition among departments for staff, for example where there are several departmental employers in a local area or where departments are trying to attract staff with scarce specialist skills.34 The Cabinet Office told us pay disparities of this kind might reflect differences in jobs in different departments, even though those jobs had been graded at the same level.35 However, it did acknowledge that departmental pay differentials in the same location could “add tensions” and that there might be a case for greater pay coherence across departments where jobs at the same grade were more similar.36
Government Response Summary
The government agrees and is developing a new Civil Service Reward Strategy, aiming for a more coherent, flexible, and individualised reward framework by 2030, which includes a revised pay framework to address pay disparities.
Government Response
Accepted
HM Government
Accepted
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2024 4.2 As set out in the Civil Service People Plan 2024-27, a new Civil Service Reward Strategy is under development. This will outline the steps the government will take to set out a vision of a more coherent, flexible, and individualised reward framework by 2030 that will enable departments to reward excellence in public service delivery, recognise capability in role, enhance productivity and inspire the acquisition of the skills and capabilities needed to support the current, and future, priorities of government. 4.3 Alongside a revised pay framework, which will be achieved through the delivery of an employment offer to ensure that the Civil Service continues to provide a modern and competitive package that is well articulated and accessible, exploring how to provide greater clarity and understanding of the pension offer, so that it is recognised for its true value and meets the needs of an evolving workforce, is also key to attracting and retaining talent. 4.4 The government recognises that under the current delegated model, departments maintain control of their own individual pay systems within the cost parameters set out in the Civil Service Pay Remit Guidance, which limits what can be directed by the Cabinet Office.