01 October 2004
Whitehall's senior managers need to take drastic action to improve the rewards for top civil servants if they want to attract high-calibre applicants from the private sector.
A leaked strategy paper, Senior reward strategy, suggested this week that senior civil servants' salaries needed to rise by up to 90% to compete with those on offer outside Whitehall.
The paper, a joint effort from the Cabinet Office and the Treasury, compared the pay of the senior civil service with equivalent jobs in the private sector and found it wanting.
A Cabinet Office source told Public Finance that the document was not policy but 'merely a draft discussion paper' outlining some key issues.
However, the review is part of what the Treasury hopes will be a revolution in the way Whitehall is organised following the outcome of Sir Peter Gershon's review into government waste.
He recommended the culling of more than 80,000 low and middle-ranking posts.
Some 3,500 senior civil servants, out of a Whitehall payroll of 530,000, would be eligible for the higher pay rates if the strategy is followed through.
But the changes would come at some cost. Cabinet secretary Sir Andrew Turnbull has already introduced more performance-focused appraisal. Senior mandarins are slowly realising that Whitehall does not mean a job for life and, instead, there is more emphasis on performance.
Turnbull aims to have up to 30% of senior civil servants entering directly from other sectors by 2012. This is unattainable at the moment, according to one source, because: 'There is a huge gap between what is paid in Whitehall and the pay of the kind of people we are currently trying to attract. At the moment, we have a brain drain, because the best people get the experience and then move on to more lucrative posts elsewhere. We cannot compete with that.'
However, pay increases for senior managers will not go down well with the unions, whose members are facing unprecedented job cuts in the coming year. The PCS union is preparing to ballot its members this week on a one-day strike in November over job losses.
Tax credit IT 'teething problems' cost Revenue £1m
The Inland Revenue has blamed computer teething problems for the delays and errors that forced it to pay out almost £1m in compensation this week.
In the chaotic introduction of the Child Tax Credit and the Working Tax Credit, many people suffered late payments between April 2003 and August 2004.
About 6 million families are eligible for the payments, and this week the Revenue paid compensation to 10,800 people for the 'worry and distress' caused.
A Revenue spokesman blamed the complaints on teething problems in the computer system as the regime was implemented last year. He said: 'Those problems have been resolved. It was a huge project and things do go wrong.'
More than 11,000 complaints were received and only 3% were turned down, the Revenue admitted.
Earlier this year, the Commons' Public Accounts Committee criticised the government's introduction of the tax credits as 'nothing short of disastrous'.
A Revenue source told Public Finance: 'It was a difficult time and we are aware that many people suffered as a result. The compensation payout recognises that. This was caused by teething problems and will not happen again.'
Many people received too little or too much money because their entitlement to credit in 2003/04 was based on outdated information on their income in 2001/02.
Conservative work and pensions spokesman David Willetts said: 'The Revenue is programmed to extract money from us. Perhaps it is not surprising that it has had difficulty getting its head around the idea of paying it out.'
DWP to cut pension credit hotline staff
The Department for Work and Pensions is preparing to cut the number of people staffing its pension credit hotline by 40%, leaving the unions in uproar.
Staff are angry that, although more than 4 million pensioners are eligible for the credits, only 2 million have applied so far.
With only two weeks left to apply for back-dated means-tested benefits, pensioners who miss the October 5 deadline will lose their entitlement.
Liberal Democrat work and pensions spokesman Steve Webb said the move was 'astonishing'.
He added: 'You would have thought that the people being redeployed could be used to trace the millions of people who are still not getting what they are due.'
A source at the DWP said: 'We are weary about the number of cuts being made across the department. This is a job that is half done. There are a huge number of people who can still apply and when they do, the staff will not be there to deal with the inquiries.'