They are consistent with Estimates voted by Parliament and broadly consistent with departmental Resource Accounts, which are based on commercial International Financial Reporting Standards (IFRS) adapted for the public sector. This will be the increase in the cost over 12 months from the date of the 2022/23 pay award. Well send you a link to a feedback form. This publication is available at https://www.gov.uk/government/statistics/public-spending-statistics-release-february-2023/public-spending-statistics-february-2023, This release presents updated Public Spending data for the years 2017-18 to 2021-22. 1 Horse Guards Road Chief Secretary to the Treasury, John Glen, made a written statement to the House of Commons on public service pensions increase. Budgets are divided into Departmental Expenditure Limits (DEL), which are firm plans for three or four years, and Annually Managed Expenditure (AME), covering spending which is demand-led, less predictable and more difficult to control. News stories, speeches, letters and notices, Reports, analysis and official statistics, Data, Freedom of Information releases and corporate reports. London Public sector organisations are encouraged to target their funds to ensure there are enough staff to deliver vital public services. Senior civil servants (SCS) and NDPB equivalents are not included within the scope of this Civil Service pay guidance. The deadline to submit a case for the 2022/23 remit year is no later than 1 December 2022. Exceptionally, aggregate data may be entered for NDPBs with prior HM Treasury agreement. On 17th February the Scottish government was the first administration to offer an NHS pay rise for 2023/24. Average total pay growth for the private sector was 7.2% in March to May 2022, and for the public sector it was 1.5%. Published by D. Clark , Feb 14, 2023. He must make good on this latest pledge to drive up pay for those who kept this country on its feet throughout the pandemic.". Departments may seek to undergo transformational pay reform to address structural issues or support delivery of workforce reform. UK households warned of year of the squeeze as cost of living soars, earnings growth in the year to October was 4.9%. Meanwhile, pay growth in the public sector has lagged that for private sector workers, averaging just 1.5% over the past year compared with 8.0% in the private sector, where it has been bolstered by one-off bonuses. Consultants/interim/agency staff costs not included in the paybill: Enter the total cost of all staff who are not on the formal Civil Service payroll, including for example, consultants, interim and agency staff. These include any benefits to an individual, in the form of pay, pension or other remuneration, when leaving service (through either compulsory redundancy or other agreed departures) other than entitlements accrued in the normal course of employment up to and including the exit date. Public-sector employees are generally those paid directly by the state such as teachers and members of the armed forces. This calculation may include regular overtime, including using a 52 week period on that calculation, and organisations should ensure that they are fully compliant with their legal obligations. Campaigning and protecting the value of the Civil Service pension. The government has already agreed to finance a 3% rise, so the extra cost is only 18bn, he says. As such, in return for higher pay awards, cases should be cost-neutral by delivering cashable savings and/or demonstrating frontloaded, tangible productivity gains within the business case lifecycle and over the Spending Review period. This includes doctors and nurses and other NHS staff, civil servants, police and fire services, state school staff and social care workers. The projected remuneration cost is calculated by adding the increase in remuneration cost arising from the remit proposals to the baseline remuneration cost. Patrick Roach, general secretary of the NASUWT teachers' union, said: "If the government hopes that teachers' anger will dissipate over the course of the summer break, they are wrong. Public-sector pay was frozen from 2011-13 and then capped at a 1% annual increase until 2018. We also welcome departments to consider transformational reform over the Spending Review period when considering long term pay strategy, as set out in section 3. Annual pay reviews for almost half of public sector workers - including teachers, nurses, police, prison staff, civil servants and the armed forces - are due shortly. "A pay award that is below inflation will be yet another pay cut for hardworking teachers.". Failure by a department to provide appropriate data, or provide it in good time, may result in re-imposing the requirement for approval of remits for that department in future years or other action to encourage better compliance. The increase covers over one million NHS staff, as well as school teachers, police officers, prison. The TUC general secretary, Frances OGrady, said workers were suffering a reduction in their living standards before a recession that could cut living standards further. A below-inflation public sector pay rise will not increase inflation, especially if lower-paid staff are the biggest beneficiaries of a deal. So 2022 is set to be yet another tough year for public sector employees. This figure should not include vacant posts that will be removed as part of organisational restructuring or planned workforce reductions. British consumer price inflation hit a 40-year high of 9.1% in May and the Bank of England forecasts it will exceed 11% in October. Departments should discuss options with the DDaT function before submitting a business case. The Treasury had said public sector average weekly earnings rose by 4.5 percent in 2020/21. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. With the agreement of HMT and the Cabinet Office, departments have the option of transferring money between their consolidated and non-consolidated pots as set out below in section 3.2. They have offered a one off payment of 387 to 939 (dependent on band), plus an average salary increase of 6.5%. Direct wages and salaries: The template calculates direct wages and salaries from the sum of pay, allowances, non-consolidated performance (e.g. As a result, the difference between public and private-sector pay has narrowed since 2011, such that in 2019-20, there was no gap once you took into account their characteristics. Employers in several sectors, including the manufacturing industry, have begun to dismiss workers, pushing up the unemployment rate to 3.7% from 3.6%. Should public sector workers get bigger pay rises? The figures do not include distortions caused by the. This is in comparison to private sector wage increases being a third lower than they were pre-crisis, at 1.8 percent. UK public sector wages increased by 2.7% in the year to October, according to official figures that will fuel the anger of rail and health sector workers preparing to go on strike in the run-up to Christmas. The Office for National Statistics (ONS) says that private sector pay grew 6.9% between August and October 2022 while public sector pay grew 2.7%, and that this was among the largest differences ever seen between the two. Percentage increase in remuneration cost (IRC) (%): Enter the percentage change in the IRC. Following the ministerial statement, HM Treasury published a covering note and multiplier tables for public service pensions for 2023. This is due to higher levels of expenditure in health for 2020-21, which was largely related to covid-19 measures. Paybill per head (headcount) is total paybill divided by headcount. Any queries in relation to this guidance, or the remit process in general, should be emailed to the Cabinet Office in the first instance: Email: civilservicepay@cabinetoffice.gov.uk, Reward, TUPE and the Employment Framework team However, if during subsequent negotiations with Trade Unions there are any significant deviations from those proposals, then these need to be reported to the Secretary of State and, as appropriate, Cabinet Office or HM Treasury before any final agreement is reached. The CIPD surveyed 1,006. We are a strong voice for civil servants and those in later life. Furious Speaker loses patience as Sunak punished for Budget leaks, Michael Gove attacks SNP for taking power away from councils, Sunak slammed over 'very frustrating' economic masterplan, Rishi Sunak expected to axe fuel duty hikes, but FairFuel warn drivers. How much public-sector pay goes up usually depends on the recommendations of the Pay Review Bodies. The Treasurys sums dont add up, says the Institute of Fiscal Studies. Regular pay is still higher in the public sector, but whether that is fair is a tricky question. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. The Chancellor must do more than win a day's headlines. In 2022/23, because of staff reductions, the consolidated baseline paybill is reduced to 19 million. If departments are looking for a longer term approach to individual pay that delivers sustainable savings, they should contact Civil Service HR Expert Services, contact.cshres@cabinetoffice.gov.uk, for further advice on the options which could apply. Vacant posts do not generate recyclable savings, because until the post is filled the salary cost to the paybill cannot be determined. More than a million NHS staff in England will get a pay rise of at least 1,400, with . in real terms, spending in eight of the ten functions (excluding EU transactions) for 2021-22 increased whilst spending in two functions fell, compared to 2020-21. the largest real terms percentage increase was in general public services (53.2 per cent), mainly as a result of an increase in public sector debt interest. Rachel Harrison, GMB national officer, said lifting the freeze "must be accompanied by real action - otherwise, this will be nothing more than empty gesture politics". This does not include on-costs, such as pensions contributions and National Insurance contributions. The business case should cover, where relevant: Departments should also work constructively with trade unions on the development of their overall pay and reward strategies and may find it helpful to discuss proposals with trade unions as these are developed. The finance and business services sector and construction sector. Public sector . On the other hand, the figures do not reflect the fact that public sector workers tend to have considerably better pension provision than private sector workers. On Tuesday, the government will publish its recommendations, covering around 100bn of public sector salaries. Pay for senior staff in NDPBs is not covered by the SSRBs remit, nevertheless NDPBs have an important leadership role in following public sector pay policy, therefore, any annual pay increase or decision to award performance-related pay to such staff must be considered alongside and according to the same principles that apply to SCS. It includes the total cost of all staff that are not on the formal Civil Service payroll, including for example, consultants, interim and agency staff. Departments should have removed automatic progression pay based on time-served from their workforces and it should not be reintroduced. Measurable: timelines and milestones must be provided to enable the tracking of the pay reform to ensure savings and impacts are being achieved. A full explanation of this decision can be found in PESA 2016 Annex E. Changes to Total Managed Expenditure (TME) and public sector debt interest in all years are due to updated ONS data. While the non-consolidated pot as a proportion of consolidated paybill remains unchanged at 3%, the cash value is reduced to 570,000 (3% of 19 million). Where reference is made to civil servants, it also includes references to other workers employed in an organisation covered by this guidance. In the accompanying excel tables, table 1 shows the aggregate position for all departments and all types of spending, with some of the main types of spending shown separately. Sponsor departments are responsible for enforcing this. Proposals must also demonstrate clear evidence that the pay discrepancy will have a front line impact on business delivery, outcomes, and productivity. Average earnings per head (FTE) is direct wages and salaries divided by FTE workforce. HM Treasury will issue a commission directly to departments to formally begin the WPR process. In particular business cases are encouraged to look at where historic divergence between departments makes reward systems more complex, less agile, less fair to employees and less value overall to the taxpayer. Evidence-based: proposals should demonstrate low levels of pay that are below relevant comparators and how this has translated into significant recruitment and retention problems (including relevant statistics) that severely risk service delivery, and the degree to which any turnover problems are associated with pay rather than other wider organisational factors. Going forward, departments should ensure that pay arrangements they put in place do not involve automatic time-served progression pay, or create an entitlement for employees to receive automatic increments. spending on health shows a nominal and real terms decrease in 2021-22 (1.1 per cent in nominal terms and 0.3 per cent in real terms). The average regular pay growth for the UK private sector was 6.9% in August to October 2022, and only 2.7% for the public sector, according to the Office for National Statistics ( ONS ). The Government has announced a pay rise for around 2.5 million public sector workers. Number of employees on the NLW: The number of eligible employees that are on (or are within 5 pence of) the NLW from April in the pay remit year. HM Treasury will provide guidance in due course with regards to Senior Civil Service or Senior Civil Service equivalent grades. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. We also use cookies set by other sites to help us deliver content from their services. Average earnings growth (%): The template calculates this as the change in average earnings per head (FTE) from the previous year, as a % of average earnings per head in the previous year. Evidence-based: proposals should demonstrate robust evidence in the form of data to back up the proposals. Nurses have rejected the offer and plan to go ahead with a series of strikes in England, Wales and Northern Ireland in favour of a deal that adds 5% to the retail prices index (RPI) measure of inflation, taking their claim to 19%. associated with machinery of government changes or repositioning staff within the pay range), transformational pay and workforce reform (including introducing Capability-based pay frameworks), to address recruitment and retention issues (including adopting the Digital, Data, Technology and Cyber pay framework), transfer of funds from the non-consolidated pay pot to consolidated pay. The cost of raising individuals to the new rates can be met outside departments pay remit. In his spending review in November 2020, Mr Sunak claimed he could not justify an across-the-board increase for the public sector when many in the private sector were subject to cut hours and pay due to the pandemic. Remits apply for one year but the settlement dates, i.e. bonuses) and overtime entered in the OSCAR template. This ended the one-year public sector pay freeze, that had been put in place in the 2020/21 Spending . Departments should also consider delivery of Spending Review priorities when considering a business case. , Organisations should contact their parent or sponsorship department to seek guidance from the Cabinet Office (contact details found in section 6 if unsure whether they are in scope of the guidance. Progression pay systems are those under which pay to individuals in a specific grade or post increases periodically. It therefore has wider coverage than the budgeting framework and is also more stable over time. HM Treasury will continue to keep the use of paybill control under review. So how much would it cost to give public sector workers a pay rise? This covers consultants/interim/agency staff costs not included in the paybill. The information below summarises the data that departments are expected to report to HM Treasury for the 2022/23 remit year: Each department should submit data covering the department itself, each non-ministerial department falling within the area of responsibility of their Secretary of State, each agency that they sponsor and each NDPB. [1] From 1 April 2022, departments must ensure that they apply the legislative increase to the National Living Wage (NLW) and National Minimum Wage (NMW). Equality: Compliance with age discrimination and equal pay legislation, and ensuring an equality impact assessment has been undertaken when developing proposals. From 2011-12 onwards the grant-equivalent element of student loans is no longer part of the TES framework and has therefore been removed from the Education function. Civil Service HR Expert Services To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk. Wed like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services. The cost of such changes should be calculated and included in the IRC calculation. Such proposals will be considered where there is a clear case that reforms will generate transformation in departmental and public service delivery, and must be entirely offset by real and cashable savings, and a demonstration of tangible productivity and efficiency gains. So 2022 is set to be yet another tough year for public sector employees. They cover departments own spending as well as support to local government and public corporations. Mr Glen stated that public service pensions will be increased from 10 April 2023 by 10.1 per cent, in line with the annual increase in the Consumer Prices Index up to September 2022, except for those public service pensions which have been in payment for less than a year, which will receive a pro-rata increase. He noted that this was because Legislation governing public service pensions in payment requires them to be increased annually by the same percentage as additional pensions (State Earnings Related Pension and State Second Pension)., CSPA General Secretary, Lisa Ray welcomes the increase: We are pleased to see at last the confirmation of public sector pensions increases of 10.1% from the Treasury. 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