Pay and pension cuts 'making Whitehall unattractive'

19 Jun 13
Pay deals for top civil servants are becoming so ‘financially unattractive’ that it is increasingly difficult to retain talented people in Whitehall, the National Audit Office warned today.

By Richard Johnstone | 19 June 2013

Pay deals for top civil servants are becoming so ‘financially unattractive’ that it is increasingly difficult to retain talented people in Whitehall, the National Audit Office warned today.

Payslip local government

Examining the government’s Civil service reform plan, auditors said that there was an ‘urgent need’ to improve the skills of civil servants to ensure they were value for money.

However, the report warned there was evidence that the two-year pay freeze for central government workers, alongside changes to pensions, were beginning to put talented people off joining the senior civil service.

The report calculated that the total reward for top posts had been reduced by around 17% in real terms over the past four years. This had led to problems in recruiting and retaining the right people for the 3,600 most senior Whitehall jobs, including those running entire departments.

Although there was currently a low rate of resignations, the auditors added, any economic recovery could lead to an ‘exodus of the most talented and marketable senior people’.

The Civil service reform plan itself was‘coherent, innovative and ambitious’, the NAO said, but implementing it faced ‘challenges’.

For example, the 24 networks for professions in the civil service, such as the finance function, lacked influence across departments and might not be the right groups to meet the needs of the modern service. Although the government accepted the need for the civil service to be led by a group that could properly cross departmental boundaries, there was ‘still a long way to go’ for this to be put in place.

The report also highlighted that the finance profession now had a ‘greater senior presence in Whitehall’ following the government’s Finance Transformation Programme, founded to develop the capabilities of staff. There was also better use of financial management principles within strategic decision-making across government.

However, the government still needed to improve its data and assessment of its own financial skills, according to the report, Building capability in the senior civil service to meet today’s challenges.

Auditor general Amyas Morse said it was a ‘challenge’ to create a leadership group in the civil service that had the full range of skills needed for success, today and in the future.

He added: ‘This is far easier said than done. The case for a corporate approach is now inescapable but achieving full buy-in from departments will take time. Progress will need to be rapid and involve all senior civil servants, not just those on corporate talent programmes.’

Responding to the report, the First Division Association said that government must take action on pay and reward or ‘risk an exodus of key staff’.

General secretary Dave Penman said it was ‘becoming increasingly clear that lack of action to address the issue of pay and reward for senior civil servants could have serious consequences for delivering reform’.

He added: ‘We need to ensure that the government has the capability that it needs to be able to successfully respond to the challenges that it will face in the coming years.’

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