05 August 2005
Civil servants this week urged the Cabinet Office to take swift action to correct problems with senior salaries that have distorted pay settlements for lower grade staff.
The FDA union wants the Cabinet Office to break an effective cap on the salaries of staff who fall into pay brackets below the Senior Civil Service (pay bands one, two, three and permanent secretaries).
In an interview with Public Finance, FDA general secretary Jonathan Baume said that Whitehall's successful drive to recruit skilled personnel from outside the core civil service had led to 'distortions in pay settlements along the pay chain'. He called for a revised SCS remuneration system to ease pressures on lower grade settlements.
In recruiting professionally skilled staff, such as IT workers and finance directors, from outside, departments are often forced to pay salaries equivalent to those enjoyed by permanent secretaries (£130,000–£264,000), although the posts are on lower grades.
In the meantime, many qualified staff recruited internally have remained on lower salaries.
Other skilled external recruits enter the civil service at pay grades immediately below the SCS (six and seven or equivalent). But Baume said, these new recruits are often paid the official maximum rate for their band, which almost always overlaps with the Cabinet Office's formal 'target rate' for SCS staff in band one, Baume said.
'It's a confusing picture. We could end up with a situation where a lot of staff in some departments are managing people that are being paid more than them,' he added.
Baume claimed the anomaly had emerged from the use of two parallel pay systems across the civil service – one for senior staff set by a pay review body and the other determined by the traditional bargaining process across departments.
The Senior Salaries Review Body has commissioned the Hay Group consultancy to study pay issues and report back later this autumn.
Hay's findings could then inform the SSRB's pay recommendations, published in January or February 2006.
But the moderate FDA has also called for the 'political will' to introduce the required changes as quickly as possible because the uncertain situation is acting as a cap on some pay settlements.
In Sir Andrew Turnbull's final speech as Cabinet secretary last week, he identified pay problems at 'senior level' as one of the key 'unresolved issues' bequeathed to his successor, Sir Gus O'Donnell.
A Cabinet Office source said that 'the department would await the SSRB's findings before deciding on any course of action.'
Macpherson takes the helm at the Treasury
Prime Minister Tony Blair has confirmed Nicholas Macpherson as the new permanent secretary to the Treasury, succeeding new Cabinet secretary Sir Gus O'Donnell.
Macpherson had been managing director for the budget and public finance directorate at the Treasury where, like O'Donnell, he enjoyed a close working relationship with Chancellor Gordon Brown. He is believed to have fought off stiff competition for the Treasury post from Home Office permanent secretary Sir John Gieve.
The promotion of both O'Donnell and Macpherson has been viewed by some Whitehall observers as evidence that Brown has strengthened his Whitehall power base in advance of his possible elevation to prime minister should Blair stand down before the next election.
Macpherson has been closely associated with some of Brown's flagship policies, notably the introduction of tax credits for low earners. One senior Whitehall source told Public Finance that Macpherson was 'someone in whom the chancellor places a deep amount of trust'. But the source added that it was 'too simplistic to 'assume that Macpherson was simply Brown's man'.
'It rather belittles what Nick has achieved as a senior civil servant. His CV is exceptional – it must be to have been considered for the posts he has held.'
Brown himself described Macpherson as an 'outstanding' managing director.
Several permanent secretaries are now expected to move posts as O'Donnell, head of the home civil service, fills top positions at a number of departments, including the Ministry of Defence and the Northern Ireland Office.
Acas staff threaten to go on strike
Acas, the dispute conciliation and arbitration service, is facing an embarrassing walk-out by its own staff over plans to axe jobs and close regional offices.
More than 400 Acas staff signed a petition demanding further negotiations over plans to shed 120 posts and close regional sites.
The Public and Commercial Services union accused Acas of failing to negotiate adequately over 'huge decisions'. It has approached the organisation's central arbitration council to discuss whether government information and consultation regulations have been met.
The PCS has not committed staff to a strike, but sources said that a walk-out was possible.
PCS national officer Steve Farley said the union passed a motion of no confidence in Acas chief executive John Taylor and chair Rita Donaghy after 'morale plummeted'.
A spokeswoman for Acas countered that the union was consulted over the proposals 'at monthly meetings'.
'We have also made it clear… that we're looking at achieving the job cuts through voluntary redundancies and early retirements and that staff at some regional offices could work from home,' she said.
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