Public sector pay review bodies (1): discontent rumbles on
This feature examines the latest pay awards for the police, school teachers, the armed forces and the prison service; the awards for other groups, including staff in the NHS, will be covered in future issues.
On this
page:
Public sector pay policy
Speak up for public services
School teachers
Armed forces
X-factor
Prison service
Northern Ireland prison service
Police
Table 1: Summary of pay review body awards
Table 2: Pay scales for qualified teachers: England and Wales
Table 3: Armed forces pay examples
Table 4: Prison service pay examples
Table 5: Police pay ranges.
Key points
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The pay review body recommendations for 2008 have been made
against a background of continuing discontent about the government's
determination to control public sector pay. Some problems from the 2007 pay round
are still outstanding.
The 2007 Pre-Budget Report and Comprehensive Spending Review (on the Treasury website), published in October 2007, made clear that the government intended to keep a tight rein on inflation, and stressed the importance of public sector pay in achieving this aim.
The report said that the government had delivered overall headline pay awards for the pay review body groups averaging 1.9% in 2007/08. It went on to explain that this stance would be maintained: "There remains a risk of second-round effects of higher inflation feeding into inflation expectations and higher average earnings growth. It is therefore important that public sector pay settlements continue to be consistent with the achievement of the government's inflation target of 2%."
The pay review bodies were asked to take the government's pay policy and inflation target into account in their recommendations for 2008.
The government's insistence on linking public sector pay with consumer prices index (CPI) inflation has been called into question by some economists. In the January 2008 issue of the National Institute Economic Review (external website), the National Institute of Economic and Social Research said: "Pay awards below the rate of inflation, as measured by the [retail prices index], have little to do with combating inflation. The retail and consumer price indices are dominated by goods and services from the private sector. It is the case that pay awards can have second-round effects. However, the latest official estimates suggest that the private sector accounts for over 80% of employment. Clearly an incomes policy that ignores the private sector is significantly hindered in its ability to 'combat' inflation."
In January 2008, Prime Minister Gordon Brown suggested that long-term pay settlements for public sector workers would help to maintain stability in the economy. He claimed that establishing fixed pay deals over three years with groups of workers such as teachers and nurses would help control inflation. "We must control inflation," Brown said. "There is no point in a big salary rise that is wiped out by a big inflation rise."
Speak up for public services
The government's approach to public sector pay has brought angry reactions from many trade unions.
In December, the TUC and the public service unions launched the Speak Up for Public Services campaign (on the TUC website). It calls for:
- an end to below-inflation pay awards and staging of awards;
- a real commitment to equal pay; and
- retention of, and respect for, the independence of pay review bodies and other pay mechanisms.
In January 2008, the TUC and unions held a meeting with the chancellor, where they expressed the view that it was "utterly unfair for public servants to be expected to accept pay settlements that fall short of matching inflation". The TUC team emphasised that most pay negotiators refer to the retail prices index, which puts inflation considerably higher than the CPI measure used by the government.
It also said: "Unions are prepared to consider long-term deals where appropriate, but a rigid centrally imposed policy that ignores recommendations from independent review bodies will not be acceptable."
In January 2008, Unite (external website) said it wanted the pay review bodies to be able to agree pay settlements without government interference. Gail Cartmail, Unite's head of the public sector, said: "We are not, in principle, opposed to three-year pay settlements that would give greater certainty to our members, but our members must be protected against substantial increases in inflation within this period."
There were also problems outstanding with several of the 2007 pay awards, in particular with the police, who held a rally in London in January in protest at the staging of their award.
It is into this difficult industrial relations situation that the review body reports for 2008 (on the Office of Manpower Economics website) are being published.
School teachers
The first report to be published was part one of the report from the School Teachers' Review Body (STRB), recommending a three-year award for school teachers in England and Wales.
It proposed a pay increase of 2.45% from 1 September 2008, with additional increases for some London teachers. It also recommended "indicative" increases of 2.3% from September 2009 and 2.3% from September 2010. The government accepted the STRB’s 2008 recommendations.
Although it recommended a multi-year deal, the STRB emphasised the importance of ensuring that a "robust" review mechanism was in place to give "reasonable risk-sharing between employers and employees". The review body emphasised that a review of this nature was a condition of its endorsement of a three-year award.
It therefore proposed to review the 2009 and 2010 recommendations "without reference to a trigger or the secretary of state’s discretion".
The STRB acknowledged that the review mechanism in the current pay award, which runs from September 2006 to August 2008, has proved "less satisfactory than we originally hoped".
The current pay award contains an inflation "reopener" clause, and the conditions for a review were met in April 2007. However, the then education secretary Alan Johnson refused the STRB’s request to review the award. He wrote: "…the best course would be for the STRB to consider these concerns - alongside other evidence about retention and recruitment and the impacts on budgets - when making recommendations for the next pay award."
Commenting on the STRB's proposal for a review to be included in the new agreement, Ed Balls, secretary of state for children, schools and families, said: "I propose to set the STRB a remit in the course of 2008 to enable them to ensure that the increases they have proposed for 2009 and 2010 continue to be appropriate in the light of latest recruitment and retention data, and wider economic and labour market conditions. I should, however, make clear that it is my firm view at this stage that the increases set out in the recommendations in relation to 2009-11 are the right ones. There would need to be clear evidence of a significant and material change in these factors to justify any change to these figures."
In making its recommendations for 2008, the STRB considered factors including: the economic situation; inflation and earnings forecasts; recruitment and retention among teachers; and teachers’ earnings in comparison with average earnings.
It found that, at national level, the minimum starting salaries for teachers match other graduate starting salaries and vacancy rates are generally low. However, in London, and particularly inner London, recruitment and retention is more difficult and this area has the highest vacancy rates. The STRB therefore targeted pay measures at this area, proposing a minimum starting salary of £25,000 for teachers in inner London (band A) and £24,000 for those in outer London (band B) from September 2008. The main pay scale in these bands will also be adjusted to take account of the increases (see table 2).
The latest increase will bring the starting salary for a qualified teacher in band D (England and Wales, excluding London and the fringe) to £20,627 from 1 September 2008.
To address problems of recruiting and retaining experienced teachers in London, the upper pay scale in bands A and B will also be enhanced from September 2008.
An additional recommendation was that the Department for Children, Schools and Families should review the structure of the four geographical pay bands to ensure they are effective in those areas with the most significant labour market challenges.
The announcement of the pay increase was met with disappointment by some of the teachers’ unions. The NUT staged a one-day strike on 24 April in protest at the award, which it says is "in effect a pay cut".
Following the release of the inflation figure for March 2008, the reopener clause was triggered again, in relation to the pay-period starting September 2007. The teachers' unions made representations to the STRB to request a remit to undertake a review of teachers' pay. At the time of writing, the STRB had not given its response.
In April 2008 the second part of the STRB report was published. It included recommendations to change the framework of pay and conditions for the "leadership group" - assistant head, deputy head and head teachers - and to "give consideration to what changes there should be to pay arrangements for this group". Responding to part two of the report, Balls agreed that the STRB should consider changes to the pay and conditions of the leadership group in the course of its next remit.
Armed forces
The Armed Forces Pay Review Body (AFPRB) recommended a 2.6% increase in basic pay for service personnel from 1 April 2008. This brings the salary for a new recruit to the armed forces to £13,013, including the X-factor (see table 3).
In his evidence to the AFPRB, the secretary of state for defence, Des Browne, emphasised that he wanted to send a message of value to service personnel and said that their pay award should be towards the top end of public sector pay awards.
The government accepted the recommendations of the AFPRB and implemented them in full from 1 April 2008. The AFPRB report endorsed Ministry of Defence (MoD) proposals for the introduction of new financial retention incentives for personnel, including submarine nuclear watchkeepers, RAF regiment gunners, RAF firefighters and the Royal Artillery. These payments range from £4,500 to £25,000. It also endorsed a new category of specialist pay for explosive ordnance disposal operators.
These targeted measures are aimed to alleviate recruitment and retention problems. The AFPRB found that the staffing deficit had doubled to 3.2% by April 2007, the largest deficit since April 2003, and had widened to 3.7% by October 2007. The measures are used particularly where shortages in specialist groups affect operational capability.
The review body said its recommendations aimed to deliver a package that would "support recruitment, retention and motivation at a time of particularly high operational pressure". It sought to balance the government’s clearly set out approach to public sector pay with the demands faced by the armed forces.
The AFPRB did not review the commitment bonuses, which are designed to extend the service of forces personnel, in its report because the MoD was conducting a strategic remuneration review. However, it noted that bonus rates had not been increased since 1997/98.
In March 2008, Browne announced (on the MoD website) an increase in the commitment bonus to a maximum of £15,000. Personnel below officer level with more than four years’ service will have access to the commitment bonus scheme from 2009/10.
The MoD said: "The new scheme is designed to reward past service and to encourage further retention in the critical four- to eight-year period, where we face the greatest retention challenge." The scheme has graduated payments of up to £15,000 for those serving a further five years.
The problems of staffing levels that affect the armed forces also affect reserves. The AFPRB therefore recommended increases to bounties and the call-out gratuity in line with the main pay recommendation.
X-factor
The AFPRB usually reviews the X-factor every five years; since its last review in 2003 it noted that defence has seen significant changes. The X-factor is an additional element of pay that recognises the relative disadvantage of conditions of service experienced by members of the armed forces, compared with civilians. It takes account of disadvantages such as danger, dislocation to family and social life and stress at work. It also considers advantages, such as healthcare and education, opportunities for promotion and training.
The AFPRB considered that there had been an increase in the disadvantages for service personnel across a range of X-factor components. It therefore recommended an increase in the level of the X-factor from 13% to 14% of basic pay from 1 April 2008. The pay scales shown in table 3 include the X-factor.
The X-factor is tapered to recognise the reduced impact of its components on higher ranks. On the evidence presented to the AFPRB, it concluded that the taper should be adjusted to cover more ranks and to increase the proportion paid to higher ranks. As a result, the pay scales for OF-5 (colonel and equivalent ranks) and OF-6 (brigadier and equivalent) have been restructured.
The AFPRB estimates that its package of recommendations will add 3.9% to the paybill from 1 April 2008.
Prison service
The Prison Service Pay Review Body (PSPRB) advises on the pay of governors, operational managers, prison officers and support staff in England and Wales, and governor and prison officer grades in Northern Ireland.
The PSPRB acknowledged that it was preparing its 2008 report in a "difficult industrial relations climate". As was the case with other pay review body recommendations in 2007, the increase it proposed was paid in stages, reducing the overall value of the award.
In its 2008 report, the review body expressed disappointment that its recommendations for 2007 had not been implemented in full. It said that it was clear that this move had damaged confidence in the review body process and affected morale and motivation.
The government’s decision to stage the 2007 award resulted in a walkout by prison staff in August 2007; this led to the government obtaining an injunction to prevent further strike action. Secretary of state for justice, Jack Straw, also announced plans to reintroduce powers to ban strikes by prison officers if a voluntary deal could not be reached. The statutory ban on industrial action by prison officers was reinstated when the Criminal Justice and Immigration Bill received royal assent on 8 May 2008.
In the letter to the review body chair setting out the remit for the PSPRB for 2008, minister of state David Hanson said that "the primary considerations are for appropriate levels of pay, in order for the public sector prison service in England and Wales to recruit and retain staff of the quality it needs."
The PSPRB found no generalised recruitment or retention problems. Labour turnover rates in the prison service are low; in the year to 31 March 2007, the turnover rate for the remit group was 7.1% and for all officer grades it was 5.1%. Rates are higher in the first three years of service.
To meet the expanded prison capacity (external website) that is planned, the prison service will need to increase recruitment; the review body targeted its recommendations at entry-level prison officer salaries to support this.
To motivate staff who do not have access to earnings growth through incremental progression, the PSPRB also targeted the pay scale maximum. The PSPRB therefore recommended a 2.2% uprating to the minimum and maximum of the prison officer scale and to the maximum of the principal officer scale (see table 4).
This increase brings the minimum salary for a prison officer to £18,135 a year from 1 April 2008.
The PSPRB remit also asked it to look at the salary incentives for staff to move into line management posts. As a result, it recommended an increase of 2.7% to the senior officer salary, and to the minimum of the principal officer scale to maintain this differential.
For operational managers, the PSPRB found no evidence of recruitment difficulties that would require an increase to starting salaries. It did, however, recommend that, in the interest of morale and motivation, the maxima of pay ranges B to G be increased by 2.2%. The pay of managers in the most challenging jobs, at the top of pay range A, was found to be significantly behind that of directors in private prisons. The PSPRB recommended an increase of 2.7% to the maximum of this range.
The PSPRB recommended that the pay scale for the operational support grades should be restructured to comply with age discrimination legislation. It therefore reduced the scale from eight points to six, with even incremental values. It applied an increase of 2.2% to the existing minimum and maximum of the scale, and proposed a common effective date of 1 April for incremental increases.
The PSPRB calculates that the overall paybill increase as a result of its recommendations will be 3.2%, of which 1.4% is the result of incremental progression.
The Prison Officers Association described this as "disgraceful".
Northern Ireland prison service
The PSPRB produces a separate report covering the staff in the Northern Ireland prison service. Its 2007 report recommended a three-year deal, with basic increases of 2% in 2007, 2008 and 2009. It also recommended an additional consolidated efficiency award of 1.5% each year, providing the terms of the efficiency deal are met.
Payment of the efficiency element of the award for 2008 was recommended by the review body in February 2008.
Police
Pay for police officers in the UK is negotiated by the Police Negotiating Board (PNB), which makes recommendations to the home secretary, the secretary of state for Northern Ireland and Scottish ministers.
In 2007 the method of calculating police pay was changed from the formula used in previous years. This was a result of a review carried out by Sir Clive Booth (on the Home Office website) of police pay arrangements. The first part of Booth’s review, "Fair pay for police officers" was published in February 2007. This looked at arrangements for determining police pay for 2007.
It suggested using indexation based on the most recent basic pay settlements for 10 public sector groups. The staff and official sides could not agree on the increases produced using this new formula, and for the second successive year the issue of pay was referred to the Police Arbitration Tribunal (PAT).
In November 2007 the PAT determined that the pay award for police officers should be 2.5% with effect from 1 September 2007, based on an expanded index of pay deals.
However, although Home Secretary Jacqui Smith accepted the tribunal’s finding, she announced that the payment would be made from 1 December 2007, rather than backdating it to September. This reduced the overall value to 1.9% over the year. Police in Scotland had their pay backdated to September.
The decision not to backdate the award in England, Wales and Northern Ireland prompted a furious reaction. The Police Federation of England and Wales said: "This is nothing less than deplorable and pours scorn on the bitter disappointment we already felt at the 2.5% award."
On 23 January 2008, police officers staged a day of action, with thousands of officers marching in London. The Police Federation was given permission to challenge the decision not to backdate the award and a hearing was held in the High Court on 15 and 16 April 2008. The Police Federation was expecting a decision within a month of the hearing.
In the meantime, at the PNB meeting in February 2008, the official side indicated that they would be seeking a multi-year deal with the staff side. The Police Federation general secretary, John Francis, responded by saying: "We consider 2007 unfinished business. We will not discuss 2008 until 2007 is finished. We want to hear from the official side how you intend to rebuild trust to enable the PNB to work effectively."
The second part of Booth’s review, "Determining pay in the police service", was published in December 2007. It examined the effectiveness of the negotiating machinery for the police. Booth recommended that a pay review body should be created for police officers, also covering chief officers, and that pay for police staff should continue to be determined separately.
The government accepted this recommendation and is due to consult on proposals for implementing the changes. In the interim, the government suggested that the index used by the PAT in determining the 2007 pay award should be used in negotiating the award for 2008.
This article was written by Rachel Sharp, researcher/writer, Pay and Benefits Bulletin.
Table 1: Summary of pay review body awards covered in this feature |
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Group (nos. covered) |
Latest pay award |
Previous increase |
Armed forces (174,780) |
2.6% increase in basic pay, allowances and specialist pay from 1 April 2008. |
3.3% increase in basic pay for the majority of service personnel covered by the pay review body from 1 April 2007. Personnel on pay level 1 received 9.2% and those on pay level 2 received 6.2%. |
Police service: England, Wales and Northern Ireland (151,123) |
2.5% increase paid from 1 December 2007, three months later than the anniversary date and therefore reducing the value to 1.9%. |
3% basic increase from 1 September 2006. |
Police service: Scotland (16,267) |
2.5% increase paid from 1 September 2007. |
3% basic increase from 1 September 2006. |
Prison service: England and Wales (35,081) |
Pay scales increased by between nil and 2.7% from 1 April 2008. Overall paybill increase of 3.2%, of which 1.4% is the result of incremental progression. |
Increases for prison officers delivered through shortening of pay scale from 1 April 2007. Those not benefiting from restructuring received a 2.5% basic increase, with 1.5% paid from 1 April 2007 and 1% paid from 1 November 2007. |
School teachers: England and Wales (525,590) |
2.45% from 1 September 2008 in first year of three-year deal. |
In the second year of a two-year award, basic pay increased by 2.5% from 1 September 2007. |
Table 2: Pay scales for qualified teachers1: England and Wales, 1.9.08 |
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Pay scale point |
Pay band D: England and Wales2, £pa |
Pay band C: fringe, £pa |
Pay band B: outer London, £pa |
Pay band A: inner London, £pa |
MAIN PAY SCALE |
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M1 |
20,627 |
21,619 |
24,000 |
25,000 |
M2 |
22,259 |
23,248 |
25,487 |
26,581 |
M3 |
24,048 |
25,037 |
27,065 |
28,261 |
M4 |
25,898 |
26,894 |
28,741 |
30,047 |
M5 |
27,939 |
28,931 |
31,178 |
32,358 |
M6 |
30,148 |
31,138 |
33,554 |
34,768 |
UPPER PAY SCALE |
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U1 |
32,660 |
33,652 |
35,926 |
39,114 |
U2 |
33,870 |
34,860 |
37,257 |
41,035 |
U3 |
35,121 |
36,114 |
38,634 |
42,419 |
1. Other than leadership group, advanced skills teachers and Excellent Teachers. |
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Table 3: Armed forces pay examples, 1.4.081 |
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Rank2 |
Min, £pa |
Max, £pa |
New recruits |
13,013 |
- |
OTHER RANKS |
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Private and lance corporal |
16,227 |
27,599 |
Corporal |
25,182 |
31,645 |
Sergeant |
28,623 |
35,219 |
Warrant officer |
36,812 |
44,588 |
OFFICERS UP TO AND INCLUDING BRIGADIER |
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Lieutenant |
14,852 |
31,188 |
Captain |
36,160 |
43,002 |
Major |
45,549 |
54,550 |
Colonel |
77,545 |
85,268 |
Brigadier |
92,537 |
96,288 |
1. Including the X-factor - an element of pay designed to take into account the relative disadvantage of conditions of service experienced by members of the armed forces compared with civilians. |
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Table 4: Prison service pay examples, 1.4.08 |
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Category/band |
Min, £pa |
Max, £pa |
Senior manager A |
60,442 |
80,858 |
Senior manager B |
55,528 |
78,483 |
Senior manager C |
53,357 |
70,679 |
Senior manager D |
44,589 |
64,933 |
Manager E |
29,184 |
44,894 |
Manager F |
26,280 |
38,082 |
Manager G |
23,434 |
31,351 |
Principal officer |
31,762 |
32,616 |
Prison officer |
18,135 |
28,136 |
Operational support grades |
15,092 |
17,754 |
Storeman |
13,698 |
15,271 |
Prison auxiliary |
12,008 |
13,611 |
Table 5: Police pay ranges, 1.12.07 (1.9.07 in Scotland) |
|
Rank |
£pa |
Constable - starting salary |
21,534 |
Constable - on completion of initial training |
24,039 |
Constable - main pay scale |
25,4341-33,8102 |
Sergeant |
33,810-37,9982 |
Inspector |
43,320-46,9892 (45,222-48,9032 in London) |
Chief inspector3 |
47,989-49,9232 (49,863-51,8312 in London) |
Superindendent4 |
57,681-67,203 |
Chief superintendent |
68,880-72,807 |
1. Officers move to this salary point on completion of two years’ service as a constable. |
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