IDS Pay Report 972, March 2007

Pay in the civil service 2006/07

Modernisation agenda comes up against ‘affordability’

During the 2006/07 pay round in the Civil Service, an increasing tension has developed between the reforms of previous years and a much more rigid focus on the ‘affordability’ of pay settlements. This first became apparent last February when the Treasury issued its guidance, calling for settlements to be more strictly in line with its own macro-economic Consumer Prices Index target of 2 per cent, rather than the more commonly used cost-of-living indicator, the Retail Prices Index. At the same time, important changes to the pay remit process were announced which increased Cabinet Office and Treasury control over the approval of pay offers and the development of reward strategies which match the Government’s key objectives. Against this background, long-term talks on a ‘coherence agenda’ which had been taking place in key departments appear to have stalled. This is not entirely surprising because the Government’s strictures have become so tight as to allow for much less accommodation of formerly agreed ‘coherence’ objectives such as the reduction of differentials across departments for similar jobs, for equal pay and for pay transparency.

This is an extract from the full editorial published in IDS Pay Report 972 for March 2007.