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Senior Salaries Review Body

My right honourable friend the Prime Minister (Gordon Brown) has made the following Written Ministerial Statement in the House of Commons today. The 31st report of the Review Body on Senior Salaries is being published today. In addition the Government intend to reform Civil Service severance and early retirement terms. The Government are determined to reduce the costs of the Civil Service. Having achieved 86,700 workforce reductions and £26.5 billion of efficiency savings as part of the Gershon efficiency programme, the Government are going further to ensure that resources are focused on improving key front-line public services. As well as delivering £35 billion of value for money gains by 2010-11, the Government will bear down on the cost of running Government, with -5 per cent reductions in real terms in the cost of running Government in each of the next three years. Over the next few years the Government will continue to ensure that value for money is driven throughout all aspects of the public sector to support our drive to continue to improve key public services. The Government therefore intend fundamentally to reform the severance and early retirement terms for all civil servants in order to control costs. The current arrangements have been in place since 1987 and are inflexible and expensive. The new terms require departments to reduce costs and will improve accountability and value for money for the taxpayer, saving up to £500 million over the next three years. The report of the Senior Salaries Review Body makes recommendations about the pay of the senior Civil Service (SCS), senior military personnel, the judiciary and very senior NHS managers. Copies have been laid in the Vote Office and the Library of the House. I am grateful to the chairman and members of the review body for their work. The Government have decided to accept some but not all of its recommendations. It is important in the present economic climate that senior staff in the public sector show leadership in the exercise of pay restraint. Senior Civil Service For 2009-10, the review body recommended a 2.1 per cent increase in base pay and no increase to the size of the non-consolidated performance-related pay pot. The review body has recommended that the maxima and minima for each pay band should be increased by approximately 2.1 per cent. The Government have decided that base pay and the minima and maxima of each pay band will increase by 1.5 per cent. They have accepted the recommendation of no increase to the size of the non-consolidated performance-related pay pot. Permanent secretaries have already announced that they will forgo such payments in 2009. Senior Military Personnel On senior military pay the review body has recommended that base pay for all senior military officers should increase by 2.8 per cent from 1 April 2009. The review body has recommended that the X-factor (a supplement to base pay in recognition of the differences between military and civilian life) should be paid at a rate of 25 per cent of the full cash value to 2- and 3-star officers and that an appropriate differential should be re-established between 1- and 2-star medical and dental officers. The Government have decided to accept the review body’s recommendations on senior military pay. Judiciary The review body’s main recommendation for the judiciary is an increase of approximately 2.6 per cent for almost all judicial salaries. The Government have decided that judicial salaries will increase by 1.5 per cent. Very Senior NHS Managers The review body has recommended an increase in base pay of 2.4 per cent and no increase to the size of the non-consolidated pay pot. The Government have decided that base pay will increase by 1.5 per cent and have accepted the recommendation of no increase to the size of the non- consolidated pay pot. Ministers The changes to senior Civil Service pay mean that ministerial pay, which is linked by legislation to the average increase in the midpoint of senior Civil Service pay ranges, will increase by 1.5 per cent. However, given the importance of public sector pay restraint at a time of economic uncertainty, salaried Ministers will not be accepting any pay rise in 2009-10, either in their ministerial pay or in their parliamentary pay.