18 June 2004
Cabinet Office officials this week warned civil servants that there would be no return to national pay bargaining, despite acknowledging claims by Whitehall's largest union that there had been a 'breakthrough' on the issue.
The department is set to placate union anger over pay by offering an improved pay negotiation framework, possibly reducing the number of talks involved.
The Public and Commercial Services union, which represents 300,000 staff and could soon stage its third 48-hour walkout over pay this year, claimed last week that there had been a 'potentially significant' breakthrough on negotiation frameworks following meetings with senior Whitehall figures.
PCS general secretary Mark Serwotka said: 'The Cabinet Office and Treasury, along with the support of the head of the civil service [Sir Andrew Turnbull] and prime minister, have authorised talks about a national dimension to civil service pay.
'There is a recognition that there needs to be greater coherence and a move to bring more commonality to civil service pay.'
Serwotka recently launched the union's campaign for a return to a national system, claiming that the 229 different sets of current negotiations hindered progress on low pay and 'distorted' regional pay.
But, as Serwotka expected, the Cabinet Office moved swiftly to play down talk of a return to national bargaining.
A spokeswoman said: 'The government wants to improve the operation of pay delegation working in partnership with the unions, but there is no question of turning the clock back to national bargaining.
'Cabinet Office and Treasury officials are taking this work forward through meetings with the civil service unions. The objective of this work is to improve the coherence of pay and conditions… within a delegated pay and conditions framework.'
At this stage of civil service reform, national bargaining would inhibit Chancellor Gordon Brown's ability to make the sort of efficiency savings he has committed Whitehall to in recent months. Flexible working and regional pay contain costs.
Brown is, for example, committed to redeploying thousands of staff away from London, where wages are highest, to low-cost areas such as Sheffield and Liverpool.
Serwotka, whose union does not oppose those redeployments in principle, acknowledged any future talks would be 'difficult'.
Whitehall insiders said the best the unions could expect would be the sort of pay regime used by the Office of the Deputy Prime Minister and education employers – a national 'spine' adjusted according to regional differences.
Shareholder Executive takes the helm of publicly owned companies
Responsibility for Whitehall's interest in publicly owned companies – some of which have come under fire for poor performance – was passed to a single body working out of the Department of Trade and Industry this week.
The move is significant because much-criticised companies such as Royal Mail and British Nuclear Fuels Ltd will now be monitored by a team of 15 civil servants, advisers and business executives – the Shareholder Executive – with direct influence over strategy, objectives, pay policy and appointments.
Richard Gillingwater, a senior investment banker from Credit Suisse First Boston, will lead the unit.
DTI permanent secretary Sir Robin Young said the switch would allow the government to 'present a more coherent front to the companies concerned'.
Royal Mail has been heavily criticised for failing to meet its major operations targets this year, despite making a small profit. Meanwhile, financial losses at BNFL increased last year to £303m after the firm was forced to buy fuel from Belgium because of problems at its plant.
Ministers have scrapped plans to part-privatise BNFL, but they continue to come under fire over problems at both companies.
The Cabinet Office denied the change was down to past failings. A spokeswoman said the decision was 'taken to use government experts in a more productive way.'
SE will also have responsibility for the UK Atomic Energy Agency, Partnerships UK, Royal Mint and Actis. Currently, nine Whitehall departments have responsibility for more than 20 government-owned businesses.
Cabinet secretary Sir Andrew Turnbull said: 'These changes represent part of the programme of civil service reform. They will create a strong and highly experienced professional group that has a strong mix of commercial, financial and civil service skills.'
Whitehall is slow to blow the whistle
Whitehall chiefs have been warned they must do more to promote whistle-blowing if they want to continue their crackdown on fraud.
Public Concern at Work, the whistle-blowers charity, told the Commons' select committee on standards and privileges on June 15 that awareness of whistle-blowing procedures is lower across Whitehall than in other parts of the public sector.
However, figures released this week show that the introduction of the Public Interest Disclosure Act five years ago has increased cases by 30%, saving the public purse £12m.
Guy Dehn, the charity's director, said more could be done, adding that managers should highlight how staff can pursue recourse outside their departments if senior staff are involved in wrongdoing.
But unions warned there is a fear of whistle-blowing. This week, the Foreign Office penalised the British Embassy official in Romania who exposed the immigration scandal that led Home Office minister Beverley Hughes to resign.
James Cameron, who sent information to MPs after his whistle-blowing attempts were ignored, was banned from returning to his post, given a final warning and told he would not be promoted for three years.
PFjun2004
