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Osborne calls time on automatic progression pay in public sector

PUBLIC SECTOR

Osborne calls time on automatic progression pay in public sector

The Chancellor of the Exchequer has promised to end automatic salary progression in the civil service by 2015-16. Announcing his spending review for 2013 to Parliament today, George Osborne said the government aims to remove annual increments for time served in schools, NHS, prisons and the police – but not the armed forces.

In addition, he confirmed that public sector pay rises will be limited to an average of up to 1% for 2015-16.

Osborne told the Commons:

"But the biggest reform we make on pay is to automatic progression pay. This is the practice whereby many employees not only get a pay rise every year, but also automatically move up a pay grade every single year – regardless of performance. Some public sector employees see annual pay rises of 7%. Progression pay can at best be described as antiquated; at worst, it’s deeply unfair to other parts of the public sector who don’t get it and to the private sector who have to pay for it.

"So we will end automatic progression pay in the civil service by 2015-16. And we are working to remove automatic pay rises simply for time served in our schools, NHS, prisons and police. The armed forces will be excluded from these reforms. Keeping pay awards down and ending automatic progression pay means that, for every pound we have to save in central administration, we can better limit job losses."

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Document extracts

A series of extracts from the HM Treasury document, Spending Round 2013 . . .

Page 8 states:

"Public sector pay awards will be limited to an average of up to 1% in 2015-16, saving at least £1.3 billion. Departments will be putting in place plans to end automatic time-served progression pay in the civil service by 2015-16. In addition, substantial reforms to progression pay will be taken forward or are already underway for teachers, the health service, prisons and the police – ensuring that public sector workers do not receive pay increases purely as a result of time in post."

Page 28 states:

"Despite pay restraint across the public sector since 2010, average public sector pay growth has continued to exceed that in the private sector. A key driver of this is progression pay, with some employees enjoying automatic annual pay increases of up to 7%. This is unfair to those public sector employees who have seen their pay awards frozen, or restricted to 1%, and unfair to the many private sector workers who have seen no or low pay growth."

Page 29 states:

"Budget 2013 announced that public sector pay awards in 2015-16 would be limited to an average of up to 1%, saving at least £1.3 billion. The Spending Round announces further action to ensure that public sector workers do not receive an automatic pay increase purely as a result of time in post. Departments will put in place plans to end automatic time-served progression pay in the civil service by 2015-16. Automatic progression for teachers will be abolished. Uplifts for prison officers will become non-contractual and subject to performance assessments. The police have been subject to a two-year progression freeze. Most health staff will be subject to local performance standards which will link progression pay more closely to performance, not time served, and the government will seek further reforms."

Union reaction

Unison is one of the UK's largest trade unions, serving more than 1.3 million members. It says: “We represent full-time and part-time staff who provide public services, although they may be employed in both the public and private sectors.”

Dave Prentis, the union’s general secretary, said:

“The Chancellor has demonstrated yet again, that he has no idea how pay progression works in practice. How can he squeeze more out of council workers when three-quarters now earn less than £21,000 as a result of the government’s three-year pay freeze?”

Incremental scales for other public service workers are not infinite, said the union. Most people reach the top of their scale in three to five years – the time it takes to reach full competence in the job. They are designed to reflect further training and experience gained on the job and follow development reviews with management. Increments are also a way of maintaining loyalty from experienced staff, said Unison. On reaching the top, workers may be stuck on that scale for the next 20 years unless they get a promotion.

Prentis added:

“If the Chancellor really wants to end pay progression then employers need to pay the rate for the job from day one. That will not save money but will cost the Treasury a lot more."

Want to know more?

Title: Spending Round 2013, HM Treasury, June 2013.

Availability: You can download all the spending review documents at https://www.gov.uk/government/news/spending-round-2013-next-stage-in-governments-plan-to-move-from-rescue-to-recovery.