Guidance from the Cabinet Office said that organisations would have the flexibility to spend a further 1% on pay awards on top of the 1% average provided for within the current spending review, as long as the award was affordable and would not impact on the safe delivery of public services.
“This is to enable organisations to have the flexibility to implement pay awards that are consistent with their individual employer affordability and workforce and business needs,” the guidance said.
However, departments struggling to recruit and retain staff, or which are undergoing transformational reform, will be allowed to submit a business case justifying higher awards than those set out in the guidance.
These business cases would be subject to Cabinet Office approval and subsequent sign-off by the Treasury.
The guidance stressed that affordability was a matter for individual organisations, with each department responsible for making pay decisions based on their own workforce and business needs.
“Government wants to ensure that it is attracting the best and brightest to work for the civil service, and rewarding hard working staff fairly,” it said.
“Pay must be fair to civil servants while ensuring value for money for the taxpayer and this is what the government believes this guidance achieves.”
It added that pay awards could be partially funded by “recyclable” savings generated when staff leave an organisation and are replaced by employees on a lower salary.
The guidance – which does not apply to departments that have already struck separate multiyear deals with employees – also allows organisations to continue to move staff progressively through pay bands without seeking additional approval.
However, trade union Prospect said its civil service members would be disappointed with another rise that failed to match inflation and fell well below the award of 2.7% given to MPs this year, especially given the additional workload generated by Brexit.
“It is extremely disappointing that the prime minister has not taken the opportunity to show her appreciation to her civil servants for keeping government going amid political turmoil,” said deputy general secretary Garry Graham.
He welcomed the freedom to use recycled money, and the recognition of structural issues such as lack of pay progression, but said the onus would be on departments to take advantage of their new flexibility.
“It is now up to civil service leaders to be ambitious and make the case for higher increases for their staff. Prospect will be negotiating and campaigning for this in the weeks and months ahead,” he said.
