Committee for Finance and Personnel

Senior Civil Service Pay Review

Submission to the Review of Pay Arrangements for Senior Civil Servants
in the Northern Ireland Civil Service

Alison Witchell
Senior Salaries Review Body Secretariat
Office of Manpower Economics/
Department for Business, Innovation and Skills
Bay 617
Kingsgate House
66-74 Victoria Street
London
SW1E 6SW

15 April 2010

Dear Alison

The Committee for Finance and Personnel has undertaken an initial scrutiny of the arrangements for awarding pay and bonuses to senior civil servants (SCS) in the Northern Ireland Civil Service (NICS) since June 2008. The Committee commenced its investigation after it learned that the amount awarded in bonuses had doubled in a five-year period, reaching in excess of £1.2m in 2008. This was set against concerns with the performance of Departments in key areas such as financial management, sick absence management and the achievement of key business targets.

As part of its investigation, the Committee took evidence from the Department of Finance and Personnel (DFP) on the criteria for awarding bonuses to SCS and the implications for NI of the Whitehall review (the Normington review) of pay and bonuses to SCS. The issue was also discussed with the Minister of Finance and Personnel during an evidence session on NICS pay issues. Transcripts of these evidence sessions can be found at the following web link:

http://archive.niassembly.gov.uk/record/hansard_finance_personnel.htm

During these evidence sessions and in correspondence with DFP and the Minister, the Committee identified a range of issues and concerns, and I have attached a number of items of correspondence for your information (see attached letters dated 10 December 2008 and 28 January 2009. Other correspondence is also available at http://archive.niassembly.gov.uk/finance/2007mandate/finmotion_07.htm). In particular, the Committee questioned the effectiveness of the arrangements in driving high performance and identified a lack of clear linkage between the achievement of personal and business performance targets. Furthermore, members considered that there was a shortcoming in managing poor performance in the NICS, and few, if any, SCS are sanctioned for underperformance when necessary.

The Committee was also concerned that the pay and bonus arrangements for SCS staff in the NICS simply mirrored that of Whitehall departments, and did not take account of local economic conditions. In this regard, the Committee highlighted DFP figures which showed that senior public servants are paid over 22% more than their private sector equivalents in NI, whilst those in GB receive 8% less. Other issues which members discussed included the apparent lower levels of risk facing SCS as compared to their peers in the private sector, including in terms of added job security, and the attractiveness of public sector pension arrangements. The Committee noted that in the Review of the Competitiveness of NI, Sir David Varney concluded that there should be a focus on the wage differential at SCS level as this is inefficient and stymies the growth of the local private sector by making the public sector more attractive to senior managers. In short, the Committee considers that the pay arrangements for SCS should be efficient and effective and should be tailored to our local circumstances.

On the basis of the evidence received and the clear issues arising in this regard, the Committee recommended that the Minister commission a review to evaluate the efficiency and effectiveness of the existing SCS pay and bonus arrangements in the NICS, and which should, importantly, consider the suitability of these arrangements in the context of NI. The Committee welcomed the then-Minister’s announcement of an independent review on 11 June 2009. Following this, the Committee led a debate in the Assembly on this issue, to offer all Assembly Members the opportunity to inform and influence the scope and terms of reference for this review. The motion (see Annex A) was approved by the Assembly on 29 June 2009, and the transcript of the debate is available at the following web link: http://archive.niassembly.gov.uk/record/reports2008/090629.htm#11

At its meeting on 17 February 2010, the Committee considered the draft terms of reference for the review and the main review outputs and, in noting that many of the Committee’s concerns were reflected therein, agreed it was content. The Committee looks forward to having an opportunity to assess the review report and, if necessary, making further representations to the Minister, in advance of any final decisions being taken on the future pay arrangements for SCS in the NICS.

Yours sincerely

Jennifer McCann MLA
Chairperson
Committee for Finance and Personnel

Annex A

Committee for Finance and Personnel Motion ‘Senior Civil Servants’ Pay and Bonuses’ – Monday 29 June 2009

That this Assembly expresses concern at the current arrangements for awarding pay and bonuses to senior civil servants in the NICS, in the context of the Executive’s focus on public-sector performance and efficiency; welcomes the decision by the Minister of Finance and Personnel to commission a local and independent review of the pay arrangements for the senior civil servants in the NICS; and calls on the Minister of Finance and Personnel to ensure that the review is comprehensive, in that it includes the grades at pay band 1 (assistant secretary), pay band 2 (deputy secretary), pay band 3 (permanent secretary) and head of Civil Service, and that it assesses the effectiveness, efficiency and appropriateness of the pay arrangements, having regard to the local economic conditions, and recommends reforms as necessary.