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Friday 01 April 2022

Pay Remit Guidance: Ministers have “their fingers in their ears” over cost of living crisis

By Dave Penman
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The government has today announced the details of the pay framework for the civil service for 2022/23. This framework, known as the Pay Remit Guidance, applies to departments, agencies and non-departmental public bodies, but doesn’t apply to the devolved administrations who have their own arrangements.

The framework sets out a basic level of increase that can be distributed by employers. That has been set at 2%, plus up to an additional 1% if a case can be made to the relevant minister and linked to workforce strategy.

This is essentially the approach that applied to last year’s pay pause, where those figures were 1.5% plus 1%. 

Government ignores cost of living crisis

The approach from the government is essentially to ignore the cost of living crisis, which is already eroding the spending power of civil servants. Inflation is expected to average 7.4% this year and may well peak at over 10%.

On Monday, the Governor of the Bank of England predicted that we will see a “historic shock” to incomes in the UK this year, unprecedented since the 1970s. The Office for Budget Responsibility last week suggested that UK household real income this year would contract at the sharpest rate since records began in the 1950s.

So faced with this unprecedented cost of living crisis, the government has decided to abandon its own workforce to face this alone. It is lamentable that in face of this crisis, no attempt has been made to soften the blow for those who have spent the last two years helping the country through the health and economic emergencies.

Ministers, with their fingers in their ears, are trying to pretend it is business as usual. Already faced with a decade of pay austerity that has seen the real incomes of civil servants fall by over 10%, the government’s refusal to even attempt to address this year’s crisis will see civil service salary levels fall further behind, as the private sector tries to address rising inflation.

The government knows that pay levels are already uncompetitive, and this decision means that not only are ministers content for salary levels to fall further behind, but they take no responsibility for supporting public servants through this unprecedented economic shock. 

There has never been a clearer example of how the current system for dealing with civil service pay is broken. Unreformed for a quarter of a century, it is essentially a cost control mechanism for the Chancellor, that may deliver a few scraps occasionally to employers if they can jump through the hoops placed in their way. Modern public services that need to recruit and retain the best talent need a reward system that supports their workforce plans and will ultimately help deliver more effective and efficient public services.

Instead, we have uncompetitive pay, an approach to flexible working that’s trying to turn back the clock by 20 years, and ministers who fail to see the damage that constantly trashing the reputation of its workforce will have on morale and attracting new talent.

FDA response

Over the next few weeks, we will be briefing reps on this year’s Pay Remit Guidance to support the negotiations on this year’s pay round.

In every employer, we will be consulting members on the comprehensive pay claims that we will be submitting, not only to seek to address this year’s cost of living crisis, but also to recognise the challenges in each of the employers where we have members. We want to ensure that every employer seeks to exploit the flexibilities that are there, however limited these are.

As a member-led union, we will consult and ballot members on the outcome of employer pay negotiations.

Dave Penman is General Secretary of the FDA
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