Public-sector pay 2013/14: Government pay policy sees awards at 1%

Author: Rachel Sharp

Most public-sector workforces saw an end to the pay freeze in 2013, with the median pay award in the sector standing at 1%, up from nil over the previous year. The 1% award reflects government policy, which will see public-sector pay restraint continue until at least the end of the current Parliament.

Key points

  • The median basic pay award in the public sector over the year to the end of December 2013 is 1%, up from nil for the previous year.
  • Government restraint on public-sector pay is to continue, with pay limits set for at least a further two years and probably into the next Parliament.
  • Progression pay is the new focus for public-sector pay reform, which will mean changes for groups including schoolteachers in England and Wales in 2014.

In 2013, most workforces in the public sector saw an end to the pay freeze, instead moving into the first year of the next phase of the Government's policy of pay restraint, which restricts increases to an average of 1%. This approach, described by Chancellor George Osborne as "tough but fair" when it was originally announced in the 2011 Autumn Statement, was set to last for the two years following the two-year pay freeze.

However, in the March 2013 Budget, the Chancellor announced that this would continue beyond the two-year period, saying: "The Government will extend the restraint on public-sector pay for a further year by limiting increases to an average of up to 1% in 2015/16." Those civil service departments that entered the pay freeze in 2010, a year ahead of most of the public sector, will now see their 2014/15 pay awards averaging 1%.

This policy applies to the civil service and workforces with pay review bodies, with the Chancellor stating that local government and devolved administration budgets would be adjusted accordingly in the spending round.

The Scottish Government pay policy for 2013/14 - which covers the Scottish Government and its associated departments, agencies and public corporations - also included a 1% cap on the cost of the increase in basic pay for staff earning less than £80,000, while freezing pay for staff on higher salaries. It had specific support for lower-paid staff, requiring employers operating under the policy to ensure that staff were paid the Scottish living wage (£7.45 an hour from 1 April 2013) and stating that all staff earning a full-time-equivalent salary of less than £21,000 a year should receive a minimum basic increase of £250. It also has a policy of no compulsory redundancies. For 2014/15 and 2015/16, the Scottish Government will maintain the 1% cap on the cost of the increase in basic pay for those earning more than £21,000 a year, with staff on lower earnings receiving a minimum increase of £300 each year.

2013 was another tough year for public-sector workers. Successive years of pay freezes and caps have meant that the average public-sector worker is now more than £2,000 a year worse off compared with 2010.

Frances O'Grady, TUC general secretary

For the pay review body groups, 2013 was the first year of awards limited to an average of 1%, and Danny Alexander, Chief Secretary to the Treasury, had written to the chairs of the review bodies detailing how they should approach their pay recommendations. He said that given the limit of an average of 1% in each workforce, the review bodies should "focus on considering how the 1% will be divided within their remit group. When considering their recommendations, review bodies may additionally want to consider the level of progression pay provided to the workforce and the potential for payments to be more generous for certain groups of staff."

The review bodies largely followed the Government's pay policy of limiting increases to an average of 1%, despite the review body chairs expressing their concern about the effect of the Government's approach on the independence of the review body system. The reports of five of the review bodies - the Armed Forces' Pay Review Body (AFPRB), the Prison Service Pay Review Body (PSPRB) covering England and Wales, the NHS Pay Review Body (NHSPRB), the Review Body on Doctors' and Dentists' Remuneration (DDRB) and the Review Body on Senior Salaries (SSRB) - were published on 14 March 2013.

The School Teachers' Review Body (STRB) report was published on 27 June 2013. This also recommended a 1% pay increase for teachers in England and Wales in line with government policy from the 1 September 2013 review date.

In the civil service, by 2013 all departments had exited the pay freeze and were covered by the policy of restricting pay awards to an average of 1% - some for a second year.

Outside the pay review body groups and the civil service, many pay offers for those groups not directly covered by government policy nevertheless followed the 1% limit, with most final offers set at this level for groups in local government and in education. TUC general secretary Frances O'Grady says: "2013 was another tough year for public-sector workers. Successive years of pay freezes and caps have meant that the average public-sector worker is now more than £2,000 per year worse off compared with 2010."

In some instances, pay awards have been weighted towards the lower paid. For example, a Scottish local government living wage of £7.50 per hour was applied for 2013/14, while in local government in England, Wales and Northern Ireland the lowest point on the pay scale was removed from 1 October to coincide with the uprating of the national minimum wage in order to maintain the differential between the lowest local government rate and the statutory minimum.

Despite this, O'Grady says: "The squeeze on pay has pushed more staff into poverty, with over half a million local government employees now earning less than the living wage. Pay restraint is set to continue this year and beyond. By 2015 it is estimated that average pay across the public sector will have been cut by 13%.

"The TUC and unions will continue to press for fair pay rewards so that workers start sharing in the benefits of growth. This should apply to public-sector workers as much as those in the private sector."

Reform focuses on progression pay

As well as the continuing restraint on pay awards, the 2013 Budget included an announcement of the Government's intention to seek savings through reform of progression pay in the public sector, although the armed forces are to be exempt from these changes. Osborne said of progression pay increases: "I think that they are difficult to justify when others in the public sector, and millions more in the private sector, have seen pay frozen or even cut. I know that is tough, but it is fair."

The biggest reform we make on pay is to automatic progression pay. This is the practice whereby many employees not only get a pay rise every year, but also automatically move up a pay grade every single year - regardless of performance.

George Osborne, Chancellor of the Exchequer

Further detail was set out in the Spending Round speech in June 2013, with Osborne confirming: "The biggest reform we make on pay is to automatic progression pay. This is the practice whereby many employees not only get a pay rise every year, but also automatically move up a pay grade every single year - regardless of performance."

He said the Government wanted to see the "antiquated" and "deeply unfair" system brought to an end in the civil service by 2015/16. He went on to say that it was "working to remove automatic pay rises simply for time served in our schools, NHS, prisons and police".

Sue Ferns, director of communications and research at Prospect union, defends progression. She said: "Ill-informed ministerial attacks on pay progression ignore the fact that the majority of civil servants no longer benefit from such arrangements. They also ignore the fact that without progression opportunities, highly skilled and talented civil servants will choose alternative employment, leaving Government without the skills and capacity it needs to operate effectively."

Norina O'Hare, head of equality, pay and policy at the Public and Commercial Services (PCS) union, agrees: "Pay progression is not just a public-sector issue. All pay systems need to have some mechanism to enable people to move up through the pay scales, whether this be performance, competencies or acquisition of skills or experience. We have had various hybrid systems in civil service departments for years, with progression linked to them and not just based on time served."

The unions are concerned about the effect of restricting pay progression on the gender pay gap in the civil service, with Ferns pointing out: "The failure to address future progression arrangements also stores up future equal pay problems."

The TUC's O'Grady also sees this reform as bad for employers: "The Government's plans for performance-related pay, particularly in education, will create a new headache for employers as they contend with another time-consuming, bureaucratic overhaul of pay."

The Scottish Government has said that it rejects the Chancellor's approach to pay progression, and pay progression in Scotland will remain a matter for individual employers.

In July 2013, Alexander outlined the approach that the review bodies should take for the 2014/15 pay round, when these groups will be covered by a second year of the 1% average pay award. His letter stated the Government's view that the case for continued pay restraint remains strong, adding: "The review bodies will want to consider the evidence carefully in producing their report. In particular, what award is justified and whether there is a case for a higher award to particular groups of staff, relative to the rest of the workforce, due to particular recruitment and retention difficulties."

The letter also emphasised the approach to progression pay, where the reform will apply to all the review body groups with the exception of the armed forces. The letter to the NHSPRB and other review bodies said: "In the 2013 spending review, the Government announced that substantial reforms to progression pay will be taken forward or are already under way across the public sector. The review body is therefore invited to consider the impact of their remit group's progression structure and its distribution among staff in recommending annual pay awards."

Most of the review bodies are due to submit their recommendations for the April 2014 pay award in February.

"Tough decisions" and "continuing reform"

Although the trade unions have highlighted problems that the Government's policies have caused for their workforces, it seems that there will be no relief from the focus on public-sector pay even after the end of this Parliament.

It is clear following the Autumn Statement that prospects for civil service pay and employment will remain very difficult. Many members have not had even a nominal pay rise for several years.

Sue Ferns, director of communications and research, Prospect

The Autumn Statement on 5 December 2013 set out the Government's view that there is an ongoing need for reform. The document says: "The next Government will need to continue to reform and take tough decisions on public-sector pay and workforce beyond 2015/16. Therefore, HM Treasury will consider how continuing reform of public-sector pay policy can best contribute to consolidation beyond 2015/16, including how to get the best value for money from the paybill."

Ferns says: "It is clear following the Autumn Statement that prospects for civil service pay and employment will remain very difficult. Many members have not had even a nominal pay rise for several years, while facing increases in their pension contributions and the cost of living. While we don't yet know the details of the pay remit guidance for 2014/15, it is already clear that 1% is nowhere near sufficient to address the problems and frustrations that are building up."

The document also revealed that from 2014 the Government intends to pilot what it called "paybill control" in a small number of government organisations. This would involve setting a "new financial control" to keep the organisation's paybill within a pre-determined budget agreed with the Treasury, and would replace the 1% cap on awards for those organisations involved.

It is not yet clear what this will involve or which departments will participate in the pilot. Responding to the announcement, Ferns said: "Further details of the pay pilots are eagerly awaited. If they are to be of any value, they will need to provide a realistic budget to address emerging skills gaps and shortages."

Dean Royles, chief executive of the NHS Employers organisation, said: "I'm keen to understand the potential implications for the Government's plan to pilot paybill control. What we really need now is to agree how we can move out of a period of pay restraint in a sensible way."

The 2013 pay round

XpertHR has collected details of 89 pay awards made to bargaining groups in the public sector with effective dates in the year to the end of December 2013. Together, these cover more than five million employees. Of these pay settlements, 80 provide for a basic, across-the-board increase, while eight are based on individual performance. The final award recorded is too complex to translate to a single figure to include on the XpertHR pay databank.

Among the 80 basic settlements included in the analysis, the median award is 1%, up from the pay freeze recorded in the 2012 pay round. The median award lifted to 1% in the year to April 2013 and has remained at the same level in each rolling year since. In the year to December 2013, the middle half of deals are worth between 1% (the lower quartile, at or below which the bottom quarter of deals lies) and 1.6% (the upper quartile, at or above which the top quarter of deals lies). See chart 1, below, for details.

Public-sector pay awards remain well below the level in the private sector, where settlements over the year to the end of December 2013 are worth 2% at the median. This is also the figure for pay settlements across the whole economy for the 12-month rolling period. For our latest analysis of pay awards in the whole economy to the end of December 2013, see Pay trends January 2014: new year sees modest boost to pay deals

Chart 1: Pay review pattern - public sector, December 2012 to December 2013

Chart 1: Pay review pattern - public sector, December 2012 to December 2013e

Source: XpertHR pay databank.

Among a matched sample of 73 pay awards (both basic and performance based), almost two-thirds (63%) are higher than the group received the previous year; almost a quarter (23.3%) are lower; and the remaining 13.7% are the same.

It may appear at odds with the picture of a sector emerging from a pay freeze that around a quarter of groups have received a lower award in 2013 than in 2012. However, for some groups this is a result of the Government's pay freeze policy providing for an increase of at least £250 for those on full-time-equivalent salaries of £21,000 a year or less. Due to how XpertHR measures pay awards - recording the increase applied on the lowest-paid adult grade - these increases were worth a higher percentage at the bottom points on some pay scales than awards made under the policy of limiting awards to an average of 1%.

Of course, during the pay freeze many with salaries above the threshold received no cost-of-living increase, although those with a contractual entitlement to pay progression would have continued to receive these increases. In addition, not all groups in the public sector are covered by the Government's policy of freezing pay, so some negotiated settlements may have resulted in a different pattern of awards over this time period.

The distribution of pay awards is shown in chart 2, below, which illustrates that almost half (47.5%) of the pay awards recorded are set at 1%, in line with government policy. Unlike the picture in 2012 when more than half of pay awards resulted in a pay freeze, just six bargaining groups have seen basic pay frozen in 2013. These are concentrated in local authority groups, including some opted-out councils and senior staff groups in local government. Some of the pay awards are examined in more detail in the sections below.

Chart 2: Distribution of public-sector pay awards effective in 2013

Chart 2: Distribution of public-sector pay awards effective in 2013

n = 80 basic awards recorded on the XpertHR pay databank.

Source: XpertHR.

Local government

Local government services, England, Wales and Northern Ireland

Local government employees in England, Wales and Northern Ireland, whose pay is determined by the National Joint Council (NJC) for Local Government Services, had not received a pay increase since 2009 when the trade union side (Unison, Unite and the GMB) submitted the pay claim for 2013. The claim was for: "A substantial flat-rate increase on all scale points as a step towards the longer-term objective of restoring pay levels and achieving the living wage at the bottom NJC spinal column point."

The squeeze on pay has pushed more staff into poverty, with over half a million local government employees now earning less than the living wage.

Frances O'Grady, TUC general secretary

The employers' side response made clear that it wanted to avoid the situation of not being able to make a pay offer for a fourth year, but wanted negotiations to cover not only pay, but also changes to terms and conditions, including car mileage allowance and the sick pay scheme. The employers' original offer of either a 1% increase linked to changes to terms and conditions, or the same increase for the lowest pay points and a lower award for higher-paid staff with no other changes, were rejected by the trade union side. The final offer, of a 1% increase on all pay points and deletion of the lowest pay point from 1 October, was accepted in July 2013, and backdated to the 1 April 2013 review date. However, the employers' side expressed doubts about the ability of the national negotiating machinery to achieve reform of terms and conditions, and said it would concentrate on assisting councils to achieve local reforms instead.

The trade union side has submitted a pay claim for 2014 calling for a minimum increase of £1 on all scale points, which at the time the claim was set out would have raised the lowest point to the level of the national living wage, £7.45 per hour. The living wage was subsequently increased in November 2013 to £7.65. The employers' side has estimated that meeting the claim in full would increase the paybill by 8.3%.

Opted-out councils

Although around 1.6 million local government employees are covered by the national pay agreement, a number of local authorities have opted out of this arrangement and negotiate their own pay increases.

In 2013, the median basic pay award among the 30 bargaining groups in local councils for which XpertHR has gathered information is 1.6%. These pay settlements are summarised in the Pay awards by industry: Local government archives. Several of the councils - including Dartford Borough Council - raised the lowest pay levels to match the living wage, which is an ambition for the trade union side of the national agreement.

Oxford City Council broke away from following the national agreement for the first time in 2013, with a five-year pay award giving an increase of 1.5% in each year of the agreement. During this period, changes will also be made to reduce the number of points in the pay scales.

Scotland

In November 2012, public-services staff covered by the Scottish Joint Council for Local Government Employees were offered a 1% increase from 1 April 2013. Following protracted negotiations, the offer was extended to cover two years from 1 April 2013, with the increase set at 1% each year. The offer included the introduction of a living wage set at £7.50 per hour for 2013/14, with agreement to match from 1 April 2014 the uplifted figure for the national living wage when it was announced. Having reluctantly accepted the original one-year offer, Unison rejected the two-year offer while the other two unions, Unite and the GMB, accepted it. In October, the employers' side announced that the offer would be imposed. The same increase was also implemented for craftworkers and chief officials.

Public safety

Fire and rescue service

Brigade managers did not make a claim for a national pay award from their review date of 1 January 2013 until November 2013. However, under the twin-track approach set out for this group, increases can be applied at a local level. Brigade managers last had a national pay increase in 2009.

In 2012, the two sides of the National Joint Council for Local Authority Fire and Rescue Services, which covers around 59,000 firefighters and control staff across the UK, agreed to joint discussions on terms and conditions and a pay framework that reflected the current and future demands on the service. This work was due to conclude by June 2013, but it was decided that it would continue and be expanded to "encompass a more wide-ranging and strategic look to the future".

At the same time, it was announced that an across-the-board increase of 1% would be applied to basic pay from 1 July 2013 and that a change to mileage rates would be phased in from the same date, with a link to approved HM Revenue & Customs rates.

Although agreement was reached on pay, the Fire Brigades Union in England and Wales has held a series of strikes over the Government's proposed changes to pensions, with increases in contribution levels and pension age particular points of contention.

Police officers

For police officers, 2013 was the first year following the two-year pay freeze. Separate agreements, each confirming a 1% increase in salaries, were reached by the Police Negotiating Board (PNB) covering England, Wales and Northern Ireland and the PNB Scotland Standing Committee covering Scotland. The increases were effective from the review date of 1 September 2013.

As a result of the Winsor recommendations (see box below), changes have already been made to the pay, terms and conditions of police officers in England and Wales that do not apply elsewhere. In England and Wales, a separate pay scale with a lower starting salary has been introduced for new-entrant constables from 1 April 2013 and progression has been frozen for two years from 1 April 2012 for all but the first three points on the constables' pay scale.

The new constables' pay scale has not been adopted in Northern Ireland or Scotland, and some police forces - for example, Surrey - have announced that they will set an entry salary for newly recruited constables at the higher end of the stipulated salary range.

Police officers - review of pay and conditions

Currently, the pay of police officers across the UK is negotiated by the Police Negotiating Board (PNB). However, following the recommendations of the Winsor review of police pay and conditions in England and Wales, the Government announced its intention to replace the PNB with a pay review body for police officers. The new Police Remuneration Review Body (PRRB) - which is expected to be introduced in autumn 2014 and make recommendations on pay from 2015 - will make recommendations on matters including police officer pay, allowances and hours of duty for ranks up to and including chief superintendent. Although originally intended to cover police officers in England and Wales, the remit of the review body will also now include Northern Ireland. The pay of senior police officers will be included in the remit of the SSRB. The changes are contained in the Antisocial Behaviour, Crime and Policing Bill currently going through Parliament.

The Scottish Government has said it will not follow the Winsor recommendations and has consulted on establishing a PNB for Scotland to negotiate the pay and conditions of service of constables in Scotland. This body will be created as part of the Criminal Justice (Scotland) Bill, which is currently going through the Scottish Parliament. In November 2012, a standing committee of the PNB was established to consider matters relating only to Scotland. In April 2013, the eight police forces in Scotland were merged to form a single body, Police Scotland.

Some of the recommendations of the second part of the Winsor review were subject to ongoing negotiation in 2013, including the significant issue of introducing compulsory severance for police officers. The PNB was asked to conclude its considerations by July 2013. Although agreement was reached on some of the recommendations, including making pay progression for federated ranks subject to a satisfactory appraisal marking, the recommendations on compulsory severance and managing police officers on restricted duties were rejected by the staff side and referred to the Police Arbitration Tribunal (PAT). The tribunal hearing was held in November 2013, and on 20 December the PAT published its decision. It rejected the recommendation on introducing compulsory severance, but accepted the official side's view on police officers on restricted duty. The PAT's award is binding on both sides of the PNB, but is subject to a final decision of Home Secretary Theresa May.

Police staff

In England and Wales, police support staff and police community support officers (PCSOs) covered by the Police Staff Council (all except for those in the Metropolitan, City of London, Kent and Surrey forces) were covered by a two-year pay freeze in 2011 and 2012, with only those on pay points worth £21,000 or less receiving an increase. In 2013, in line with the offer made to police officers, police staff were offered an increase of 1% on all pay points from their review date of 1 September, which was agreed by the Police Staff Council.

Police staff in Scotland also came out of a two-year pay freeze in 2013. Although not directly covered by it, the award for 2013/14 was made in line with Scottish Government policy: full-time salaries under £21,000 were increased by £250, salaries between £21,000 and £80,000 were increased by 1%, and higher salaries were frozen. From 2014/15, the Scottish Government pay policy will apply directly to this group.

Administration and support staff and PCSOs in the Metropolitan Police have had the same 1% increase imposed, resulting in industrial action by members of the PCS union on 31 December 2013.

Armed forces

Around 175,000 service personnel at and below the rank of brigadier and equivalent have their pay recommendations made by the AFPRB. As with the other pay review bodies, the AFPRB was restricted by the Government's public-sector pay policy and recommended a 1% increase in base pay from 1 April 2013, which was accepted.

However, the 2013 report coincided with the review body's five-year review of the X-factor - a supplement to pay that recognises the conditions of service experienced by members of the armed forces compared with civilian employment. The review body took the view that the X-factor should be distinguished from base pay, which the Government wished to constrain, and recommended an increase in the X-factor of 0.5 percentage points, to 14.5% of base pay. This recommendation was originally rejected, but this decision was overturned in the 2013 Budget announcement, although the increase was deferred from the review date and took effect from 1 May 2013.

Senior officers in the armed forces fall under the remit of the SSRB, which recommended an increase of 1% to base pay, which was accepted.

Prison service

The PSPRB makes recommendations on the pay of employees in the public-sector prison service in England and Wales, and produces a separate report on staff in the Northern Ireland Prison Service (NIPS).

While we don't yet know the details of the pay remit guidance for 2014/15, it is already clear that 1% is nowhere near sufficient to address the problems and frustrations that are building up.

Sue Ferns, director of communications and research, Prospect

The Northern Ireland Executive remit to the PSPRB confirmed that the executive would apply the same public-sector pay policy as the Westminster Government. The review body recommended consolidated increases of 1% for NIPS staff in open grades, with those in closed grades receiving contractual progression or - for those at the maximum - a non-consolidated payment of 1%.

With a new pay structure introduced into the prison service in England and Wales, the review body had to make recommendations on a variety of pay arrangements within the remit group. For details of the pay recommendations, see Public-sector pay review bodies 2013: 1% average awards follow government pay policy.

The increases for prison service staff outside the remit of the review body depended on whether or not they had transferred to the new pay and grading system, and are summarised in the Pay awards by industry: Public safety archives.

Central government

Government departments and agencies were covered by the Civil Service Pay Guidance 2013/14 on applying the 1% average pay award, which sets out the factors affecting pay setting. As was the case in the previous year, the guidance sets out elements that should be included in the 1% average award, including:

  • revalorisation;
  • progression increments;
  • increases in the non-consolidated performance pot above the existing proportion of the paybill;
  • non-consolidated payments (other than payments related to performance from departments' non-consolidated performance pots);
  • buyout of allowances;
  • incentive payments relating to the implementation of pay reforms; and
  • increases from pay restructuring.

In practice, departments have applied the 1% average increase in a number of ways. For example:

  • at the largest department, the Department for Work and Pensions, a 1% increase has been applied to pay scales and salaries;
  • at HM Passport Office pay awards were weighted to lower-paid staff, with spot rate increases on the lowest grades - for other grades, the 1% increase was distributed within each grade, with higher increases awarded to those nearer the bottom of the pay range; and
  • at the Department for the Environment, Food and Rural Affairs, pay awards were based on performance marking, with staff marked as "excellent" receiving 1.5% consolidated increase; those marked as "good" 1%; and "must improve" 0.5%.

The pay awards collected so far in government departments and agencies are summarised in the Pay awards by industry: Central government archives. At the time of writing, some departments were still in the process of settling their 2013 pay awards, including the Food Standards Agency, which had not received clearance for its remit.

Pay restraint is set to continue this year and beyond. By 2015 it is estimated that average pay across the public sector will have been cut by 13%.

Frances O'Grady, TUC general secretary

Although in many departments pay progression has been found not to be a contractual entitlement, some staff in a handful of departments still have this entitlement and have continued to receive progression increases during the pay freeze and into the phase of 1% average increases. In the 2013 pay round, before the Government's announcement on reform of progression pay, the Civil Service Pay Guidance 2013/14 document had hinted at a tougher approach. It stated: "Departments are encouraged to include contractual progression increments to which there is a legal entitlement as part of the 1% award." The previous guidance had suggested that departments could decide to include contractual progression increments within the 1%, but were not obliged to do so. The guidance went on to say that departments had the opportunity to submit proposals for removing contractual progression as part of their 2015/16 spending round proposals.

O'Hare says: "Although negotiations are delegated to departments, the Treasury guidance locks down their ability to innovate in their approach to pay." She believes that the change to the wording in the remit guidance has resulted in pressure on departments to include the cost of progression within the 1% paybill increase, noting: "As a result, many civil servants have seen increases worth less than 1% in practice."

As a result of the machinery of government changes, departments often have staff on different pay scales and with different terms and conditions, including the entitlement to progression pay. For example, in the Department for Business, Innovation and Skills (BIS), staff on former Department for Business, Enterprise and Regulatory Reform (BERR) pay arrangements have a contractual entitlement to pay progression, whereas those on former Department for Innovation, Universities and Skills (DIUS) terms do not. In a move towards harmonising pay arrangements for staff across the department, a new pay system was introduced in April 2013 that has no steps, spine points or target rates and no guarantee of future pay progression. This system applies to new entrants and those who are promoted.

As part of the BIS pay offer for 2013, the department offered an incentive payment for other staff to move to the new system, although there is no obligation on them to do so. Legacy pay systems will be frozen, with no future increases to the minima and maxima, although staff who decide to remain on former BERR terms retain the contractual right to pay progression and will continue to receive these increases.

The Home Office has introduced a new pay structure for all staff as part of the 2013 pay offer, which brings an end to contractual pay progression. The new structure has spot rates for the lower grades that are higher than the previous grade maxima, with staff receiving consolidated increases to move them to the new rates. For staff in higher grades who had contractual pay progression rights, a one-off, non-consolidated buyout payment has been made, worth two-and-a-half years of pay progression, in addition to consolidated increases for those below their grade maximum.

In the Department for Transport and the Department for Communities and Local Government, other departments with contractual pay progression, the outcome of the pay negotiations was not known at the time of writing.

MPs

The pay of MPs at Westminster is determined by the Independent Parliamentary Standards Authority (IPSA). In January 2013, IPSA announced that, in line with the rest of the public sector, the salary of MPs should increase by 1% in 2013 and in 2014. In December 2013, IPSA published its report on a new remuneration package for MPs that will apply after the next general election. It recommends that the pay of MPs should rise from the current level of £66,396 per year to £74,000. The increased cost would, according to IPSA, be offset by changes to allowances and the final-salary pension scheme, and will be subject to a further review at the start of the next Parliament.

Education

Schoolteachers, England and Wales

The STRB, which covers schoolteachers in England and Wales, recommended an increase of 1% on pay scales and pay points from the review date of 1 September 2013. Following recommendations made by the STRB in an earlier report, in September 2013 teachers received incremental progression pay increases for the last time; in future years, pay increases will be determined by schools on the basis of individual performance appraisals. The incremental points between the minimum and maximum of the main pay scale for classroom teachers were also increased by 1%, but these will be used only as reference points in future pay decisions.

The review body has been given a further remit by Secretary of State for Education Michael Gove to look at:

  • how to provide a simplified and flexible framework for leadership pay;
  • how the provisions for allowances, pay flexibilities and safeguarding could be reformed to allow a simpler and more flexible "School Teachers Pay and Conditions Document"; and
  • how the framework for the non-pay conditions of teachers could be reformed.

The review body was due to submit the report before 10 January 2014.

The STRB has also been asked to make recommendations on salaries and allowances for the 1 September 2014 review date, "to reflect the 1% pay award for public-sector workers", with the report due by May 2014.

The National Union of Teachers (NUT) and the National Association of Schoolmasters Union of Women Teachers (NASUWT) are in dispute with the Government over changes to pay, conditions and pensions, and have coordinated a campaign of industrial action, with strike action held in England. The unions have said that a joint national strike will be called unless the Government offers talks to resolve the disputes.

The TUC and unions will continue to press for fair pay rewards so that workers start sharing in the benefits of growth. This should apply to public-sector workers as much as those in the private sector.

Frances O'Grady, TUC general secretary

Schoolteachers, Scotland

In Scotland, pay for teachers is negotiated by the Scottish Negotiating Committee for Teachers (SNCT). A two-year offer in line with that made to other local authority employees in Scotland - of a pay increase of 1% in April 2013 and in April 2014 - was linked to improved pay for supply teachers and changes to terms and conditions as proposed by the McCormac review. These changes were rejected by the largest teaching union in Scotland, the Educational Institute of Scotland (EIS), along with the NASUWT, although they were accepted by Voice and the Scottish Secondary Teachers' Association (SSTA). At the time of writing talks were ongoing.

Further education, England

The employers' side of the National Joint Forum, the Association of Colleges, confirmed its final recommendation on pay following acceptance of the offer by a majority of the trade unions. The recommended minimum hourly rate was increased to £7.45 per hour, in recognition of the living wage at the time of the offer. Other pay points increased by 0.7% from the 1 August review date.

Further education, Wales

In Wales, the pay of staff in further education colleges is linked to that of teachers in schools, and was increased by 1% from August 2013.

Sixth-form colleges, England

Teaching and support staff accepted the employers' final offer of an increase of 1% on all scale points and allowances from September 2013.

Higher education

In November 2013, the Universities and Colleges Employers Association advised institutions to implement a 1% increase backdated to the effective date of 1 August 2013, despite most of the higher education trade unions being in dispute over the offer.

Public health

Three pay review bodies make recommendations on the pay of staff in the NHS: so-called "very senior managers" fall under the remit of the SSRB; doctors and dentists are covered by the DDRB; and staff on Agenda for Change (AfC) terms and conditions make up the remit group of the NHSPRB. In line with government policy, all the review bodies recommended an increase of 1% from the review date of 1 April 2013. For more detail on the recommendations, see Public-sector pay review bodies 2013: 1% average awards follow government pay policy.

In separate negotiations, the NHS Staff Council in England agreed changes to the AfC framework that came into effect from the same date. These include linking progression through the pay points to locally agreed performance requirements.

Despite this agreement, in its evidence to the NHSPRB for the 2014 award, the Department of Health (DH) covering staff in England has asked the review body to consider making any pay award dependent on agreement to further AfC reform - effectively, deferring the award. It has made a similar proposal for doctors and dentists, saying that the payment of increments in addition to a basic pay award was "out of step with our wider policy on public-sector pay and the ambitions the Chancellor set out in the Spending Round 2013". It wants NHS pay to have "stronger links to performance, quality and productivity".

On the award for very senior NHS managers, the DH says: "We believe the only justification for an increase in [very senior managers'] pay in 2014/15 would be clear and compelling evidence of issues with recruitment, retention and motivation."

2014 and beyond

Negotiations in the 2014 pay round will take place under ongoing pay restraint, with the 1% average increase in place for the pay review bodies and the civil service likely to extend to other sectors as budgets continue to be squeezed. With the Treasury now looking at reform beyond 2015/16, the trade unions have a long struggle ahead.

Gail Cartmail, Unite assistant general secretary for public services, says: "During 2013, millions of public-sector workers across the UK saw their already suppressed incomes ground further down by an austerity-obsessed government. George Osborne's blanket imposition of a 1% pay cap for the public sector extended to 2015/16 is blatantly unfair and it is the duty of Unite and other trade unions to campaign strongly in 2014 to ensure that public-sector workers receive decent pay increases to make up for years of pay drought."

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