Automatic pay rises taken from British civil servants

By on 23/07/2015
The UK's Chancellor of the Exchequer George Osborne. Photo by UK Treasury

UK civil servants are to be stripped of automatic pay rises linked to the length of service under new radical plans announced by the country’s finance ministry this week.

Despite a public sector pay freeze announced in 2010, some public sector workers have continued to see their pay increase because of contractual obligations to staff – a system of civil service pay that goes back decades and was designed to recruit and keep staff.

Finance minister George Osborne announced the plans on Monday as part of the Spending Review 2015, which will be published in November this year and set out the government’s broad fiscal strategy until 2019-20.

A document outlining the preliminary spending proposals revealed by Osborne in parliament this week, says that the “government will continue to examine pay reforms and modernise the terms and conditions of public sector workers. As part of this, the government has agreed proposals with all departments to abolish contractual progression pay across the civil service.”

The document states that after a four-year public sector pay freeze, which saved around £8bn, the same is planned for the next four. Just like he announced in 2010, public sector pay rises will be capped again at 1% for four years.

A Treasury spokeswoman said: “Autumn Statement 2014 announced proposals to end progression pay had been agreed with departments covering three quarters of the civil service workforce eligible for progression pay and Budget 2015 announced proposals had been agreed with all departments on ending progression pay.

“There may be a small number of cases where progression pay may be paid in 15/16 and future years, eg. cases where have pay freedoms such as museums, or where bodies are due to become private sector organisations. But for any cases where contractual progression pay remains, progression pay scale points will be frozen as per the 15/16 Civil Service Pay Guidance.”

Osborne also asked departments to come up with plans to cut 40% from their budgets by 2019-20 in a bid to find £20bn in savings.

A letter from the Treasury went out to departments, which have unprotected budgets, on Tuesday, 21 July, asking them to model two scenarios of 25% and 40% of savings within their resource budgets by 2019-20 in real terms. These are the same reductions requested ahead of the Spending Review of 2010.

The National Health Service, per-pupil schools budgets, international development aid and national security budgets will be protected from the cuts.

Osborne said departments had also been asked to help meet a target of 150,000 new homes on public sector land by 2020.

“This spending review is the next step in our plan to eliminate the deficit, run a surplus and ensure Britain lives within its means,” he said.

“We’ll invest in our priorities like the NHS and national security. Elsewhere in government, departments will have to find significant savings through efficiencies and by devolving power, so people have a greater say over the issues that affect them and their communities. We’ll deliver more with less.”

Cabinet Office minister Matt Hancock told the British Broadcasting Corporation (BBC) on Monday that the proposed cuts will mean radical changes for departments.

“We have got to see where we can best make the savings across the whole of government,” he said. “It is worth looking at what that looks like in each case. In each department, you do want to look at what a radical change would mean.”

About Winnie Agbonlahor

Winnie is news editor of Global Government Forum. She previously reported for Civil Service World - the trade magazine for senior UK government officials. Originally from Germany, Winnie first came to the UK in 2006 to study a BA in Journalism & Russian at the University of Sheffield. She is bilingual in English and German, and, after spending an academic year abroad in Russia and reporting for the Moscow Times, Winnie also speaks Russian fluently.

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