Whitehall focus - Pay plan to halt mandarin exodus

24 Feb 05
Top civil servants could receive pay rises of between 9% and 15% over the next 14 months, under new plans to prevent a Whitehall brain drain.

25 February 2005

Top civil servants could receive pay rises of between 9% and 15% over the next 14 months, under new plans to prevent a Whitehall brain drain.

Ministers will also investigate why senior staff across all departments leave, following advice from the Senior Salaries Review Body.

The SSRB this week published its annual report on Whitehall pay, and many of its recommendations highlight growing concerns that senior civil servants in key departments are being lured to the private sector.

The SSRB, chaired by former mandarin John Baker, advises ministers on the remuneration of the judiciary and senior Whitehall and armed forces personnel. Its recommendations inform departments' pay strategies.

The latest report, published on February 22, recommends that:

  • The government should introduce new pay bands for senior staff from April, including revised minimum salaries and progression target rates.
  • Departments should award individual pay increases in 2005 ranging from 0%-9%, with an average pay award of 4.2%.
  • Permanent secretaries should receive pay increases of 5% in April 2005 and 2006, 'on top of the normal uplift' [progression], and a new pay range of between £130,350 and £264,250.

  • Departments should collect information on why senior civil servants leave their posts.

The changes would increase the civil service pay bill by 2.7%. But Whitehall sources told Public Finance the rises were necessary to prevent a 'brain drain' from departments where skills could be easily transferred to the private sector.

The 'leaving rate' for Whitehall staff during 2003/04 was 9.1%, of whom 5.4% left following retirement and 2.4% resigned.

'The government commented that although these rates varied little from previous years, there was concern that they masked a retention risk among specific groups or skill areas, particularly where the external market offered high salaries,' the SSRB reported.

A Cabinet Office spokeswoman said: 'The measures being considered are preventative, rather than reactionary'.

However, pay rises for senior staff contrast with those earmarked for middle and lower-grade civil servants.

The Treasury this week published its annual guidance on broader civil service pay, recommending a limit on earnings growth of 3.5% for 2005/06.

Paul Noon, general secretary of the union Prospect, said that would drag Whitehall further behind the private sector, where the average earnings growth was 4.5%.

'If ministers insist on driving down... pay they will end up driving out the very people they depend upon to put their plans into effect,' he said. 'Our members are highly skilled workers who can easily find employment in the private sector.'

Home Office signing strengthens finance team

Home Office permanent secretary Sir John Gieve has boosted the department's financial expertise with the appointment of a new director.

Helen Kilpatrick will join Gieve's team as director general of finance and commerce on April 25. She is currently the deputy chief executive of West Sussex County Council and has a wealth of experience in public sector finance. A qualified accountant, she has also been treasurer of Sussex Police Authority – a role that will stand her in good stead when she arrives at Marsham Street – and has chaired CIPFA's pensions panel.

Kilpatrick will be responsible for the department's finance strategy, 'establishing clear lines of financial accountability, corporate business planning, improving efficiency and value for money', the Home Office announced on February 22. She will also monitor procurement functions.

Chancellor Gordon Brown and Cabinet Secretary Sir Andrew Turnbull have been keen to appoint finance experts to the boards of all Whitehall departments to improve financial planning and to control costs in a co-ordinated manner.

MoD Skynet man is new expert on PUK board

Partnerships UK, the organisation tasked with developing public-private partnerships, has appointed a senior investment banker specialising in infrastructure projects to its board.

Andrew Rose, the managing director of US-based CIBC World Markets' infrastructure team, has worked on several major UK public sector projects, including the Ministry of Defence's £2bn Private Finance Initiative Skynet project to deliver new satellite systems.

This was the largest PFI at the MoD when it was undertaken in 2002.

He was also part of the CIBC team that raised finance for the Metronet deal for London Underground's PPP.

Rose will lead PUK's work on all finance-related activities and have specific responsibility for major PFI and PPP deals.

He will also be responsible for monitoring PUK's own financial activities.

James Stewart, PUK's chief executive, said: 'Andrew's global experience in the field of infrastructure financing and his experience with closing major transactions will be a great asset to us and the public sector.'


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