COMMITTEE FOR FINANCE AND PERSONNEL
COMMITTEE MOTIONS
Senior Civil Service Pay and Bonuses
DFP Information on Bonuses to Senior Civil Servants in 2008
Assembly SectionCraigantlet Buildings |
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Mr Shane McAteer
Clerk
Committee for Finance and Personnel
Room 419
Parliament Buildings
STORMONT
12 January 2009
Dear Shane
I refer to your letter dated 7 November in which you requested further information relating to bonus payments paid to senior civil servants in the Northern Ireland Civil Service (NICS). My response of 19 November set out this information for the 2007 Senior Civil Service (SCS) award; at that time similar figures were not available for the 2008 pay award. This information has now been compiled and is attached at Annex A.
As in previous years, the Senior Salaries Review Body (SSRB) made recommendations on the total increase in the SCS paybill and, within that, what proportion of the paybill should be paid as non-consolidated bonuses as opposed to consolidated pay rises. In 2008 the SSRB recommended that the SCS paybill should increase by 2.5% and that the non-consolidated bonus pot should amount to 8.6% of the total paybill. The Cabinet Office accepted these recommendations and the 2008 NICS Senior Civil Service pay strategy, which was constructed within the parameters recommended by the SSRB, was approved by the Minister of Finance and Personnel in September 2008.
As part of the 2008 pay award, a total of 190 members of the SCS below Permanet Secretary level were eligible to be considered for a bonus award. Of these, 75.79% (144) were paid a bonus - 46 staff received a Level 1 bonus, 53 staff received a Level 2 bonus, 45 staff received a Level 3 bonus and 46 staff received no bonus. I enclose a copy of the 2008 Senior Civil Service Pay Strategy which explains how decisions on the allocation of basic pay awards and non-consolidated bonus awards were made, the criteria used to make such decisions and the percentage of staff which received each category of basic pay and non-consolidated bonus award.
As in my previous response, totals by Pay Band 1 (Assistant Secretary) level have been provided for all Departments, except in the case of DCAL and DETI where the numbers involved were too small – the Pay Band 1 totals for these two Departments are presented together in order to avoid a breach of the Data Protection Act.
Information on bonuses awarded at Pay Band 2 (Deputy Secretary) level has been given by Department for OFMDFM, DFP and DHSS&PS. Again, in order to comply with Data Protection principles, and to avoid identifying any individual concerned, bonuses awarded at Grade 3 level for the remaining eight Departments have been grouped together into two tables. For completeness, information regarding bonuses paid to Permanent Secretaries as part of the 2008 pay award is also included in Annex A.
At the Assembly’s Finance and Personnel Committee meeting of 3 December members requested information on the bonus payments made to the Head of the Civil Service and also whether bonuses were paid to members of Land and Property Services. I can advise that the Head of Civil Service received bonus payments in both 2007 and 2008. Information on bonuses paid to senior staff in Land and Property Services is available at Annex B attached.
Yours sincerely
NORMAN IRWIN
ANNEX A
1. 2008 BONUS PAYMENTS TO PERMANENT SECRETARIES
In 2008, 13 Permanent Secretaries were eligible to receive bonus payments (including the Head of Government Legal Services and the Head of the Civil Service). In order to avoid releasing personal information and breaching the Data Protection Act, a breakdown of bonuses awarded is not possible. However the total amount of bonuses awarded was £123, 250.
2. 2008 Bonus Payments to Senior Civil Service members (excluding Permanent Secretaries)
190 Senior Civil Service staff at Pay Band 1 (Assistant Secretary) and Pay Band 2 (Deputy Secretary) level were eligible to receive a non-consolidated bonus payment as part of the 2008 pay award of which 144 staff received a bonus payment.
As requested, a breakdown of bonuses awarded is set out in the tables below by Departmentand grade.
For the larger three Departments the bonus information can be presented by grade. For the remaining eight smaller Departments the information is still given individually at Pay Band 1 level, where there is a greater number of staff, except in the case of DCAL and DETI where the numbers involved were too small so the totals are presented together. For the same reason, bonus information for Pay Band 2 staff is amalgamated into two tables to avoid breaching the Data Protection Act by identifying any individuals concerned.
OFMDFM, DFP & DHSSPS
| OFFICE OF THE FIRST & DEPUTY FIRST MINISTER | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 11 |
79,750 |
| PAY BAND 2 | 6 |
54,750 |
| DEPARTMENT OF FINANCE & PERSONNEL | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 26 |
193,250 |
| PAY BAND 2 | 8 |
64,750 |
| DEPARTMENT OF HEALTH, SOCIAL SERVICES & PUBLIC SAFETY | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 16 |
126,750 |
| PAY BAND 2 | 3 |
26,000 |
DSD, DARD, DRD, DOE, DE, DEL, DETI & DCAL
| DEPARTMENT FOR SOCIAL DEVELOPMENT (incl CSA and SSA) | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 8 |
56,500 |
| DEPARTMENT OF AGRICULTURE & RURAL DEVELOPMENT | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 10 |
74,750 |
| DEPARTMENT OF REGIONAL DEVELOPMENT | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 8 |
64,750 |
| DEPARTMENT OF ENVIRONMENT | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 8 |
59,250 |
| DEPARTMENT OF EDUCATION | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 9 |
72,500 |
| DEPARTMENT FOR EMPLOYMENT & LEARNING | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 5 |
38,750 |
| DEPT OF ENTERPRISE, TRADE & INVESTMENT AND DEPT OF CULTURE ARTS & LEISURE | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 1 | 7 |
37,750 |
AMALGAMATED PAY BAND 2 INFORMATION
| DSD, DARD, DRD, DOE | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 2 | 20 |
109,500 |
| DE, DETI, DCAL & DEL | TOTAL STAFF | TOTAL £000’s |
|---|---|---|
| PAY BAND 2 | 7 |
59,750 |
ANNEX B
SENIOR CIVIL SERVICE PAY AWARD – BONUS PAYMENTS TO LAND AND PROPERTY SERVICES STAFF 2007 AND 2008
- In 2007 4 members of LPS staff were eligible to receive non-consolidated bonus payments as part of the pay award. Bonuses were awarded as follows:
3 x £6,500
1 x £4,000
_________
4 staff received bonuses totaling £23,500. - In 2008 7 members of LPS staff were eligible to receive non- consolidated bonus payments as part of the pay award. Bonuses were awarded as follows:
1 x £10,500
3 x £7,750
1 x £5,000
2 x nil
________
5 staff received bonuses totaling £38,750 - Due to obligations under Data Protection, this information has not been broken down into grade/pay band to avoid identifying individuals within LPS.
NORTHERN IRELAND CIVIL SERVICE SENIOR CIVIL SERVICE PAY STRATEGY 2008
- This pay strategy provides the basis for the Senior Civil Service (SCS) pay award in the Northern Ireland Civil Service for 2008. It reflects the recommendations of the Senior Salaries Review Body (SSRB) and the accompanying Cabinet Office guidelines where those guidelines are consistent with the business needs of the Northern Ireland Departments.
- The aims of the Northern Ireland Civil Service SCS pay strategy are:
- to provide better incentives for delivering key results;
- to give significant rewards to best performers;
- to encourage continuous improvement;
- to enable the service to compete in the market for high quality staff;
- to achieve a simple, transparent and efficient pay system
- The Northern Ireland Civil Service generally shadows the broad framework of the pay arrangements in place for SCS staff in the Home Civil Service. In practice this means that the Northern Ireland Civil Service adopts the overall cost envelope and size of bonus pot as recommended by the SSRB and endorsed by Cabinet Office, as well as the pay band minima and maxima for SCS staff. The NICS will, however, determine for itself all other variables such as the base pay matrices, percentage of staff eligible for bonus payment and the level of bonus payments, reflecting local considerations.
- The SCS pay award is effective from 1 April 2008 and payable to staff in post at that date. It rewards performance over the year 1 April 2007 to 31 March 2008. There will be no staging of any part of the award.
- There are two core elements to the SCS pay award – a base pay award and a non-consolidated bonus. The base pay award is determined on an assessment of performance, growth in competence, job challenge relative to peers and an assessment of confidence in future performance. The award of a non-consolidated bonus is based on in-year delivery relative to objectives or other short-term personal contributions, as measured against specified criteria. Non-consolidated bonuses are not dependent on tranche allocation for the base pay award.
Pay Band Structure
- The NICS operates a pay band structure for the SCS below Permanent Secretary as indicated below. Pay Band 1 covers Assistant Secretary (Grade 5) level posts. Pay Band 2 covers Deputy Secretary (Grade 3) posts. The pay bands effective from 1 April 2007 were:
| 1 April 2007 | |||
|---|---|---|---|
| Pay Band |
Minimum £ |
Progression Target Rate (PTR) £ |
Recruitment & Performance Ceiling (RPC) £ |
| 1 | 56,100 | 78,540 | 116,000 |
| 2 | 81,600 | N/A | 160,000 |
- With effect from 1 April 2008 the minimum to Pay Band 1 will be increased to £57,300 in line with SSRB recommendations. In line with Cabinet Office guidance, the Progression Target Rate (PTR) for Pay Band 1 will be abolished. There will be no uplift to the other elements of the Pay Bands. From 1 April 2008 the Pay Bands will therefore be as follows - .
| 1 April 2008 | ||
|---|---|---|
| Pay Band |
Minimum £ |
Recruitment & Performance Ceiling (RPC) £ |
| 1 | 57,300 | 116,000 |
| 2 | 81,600 | 160,000 |
Base Pay Award
- From April 2004 the Cabinet Office introduced greater flexibility in order to allow Departments more clearly to differentiate between levels of performance and reward within an overall cost envelope. In 2008 the cost envelope is 2.5% for base pay, which limits the scope for significant differentiation. This represents year one of a three year pay settlement with an indicative cost envelope of 7% growth in SCS paybill for the three year period 2008 -2011 as recommended by the SSRB. For the 2008 award, the aim has been to get the majority of SCS staff as close as possible to the headline increase in the SCS paybill of 2.5%, while allowing for some limited differentiation for Tranche 1 and Tranche 3 performers. Accordingly the following pay arrangements for Pay Bands 1 and 2 will apply for the 2008 SCS pay award.
PAY BANDS 1 & 2
Performance Tranche |
Award |
|---|---|
| TRANCHE 1 | 2.75% |
| TRANCHE 2 | 2.5% |
| TRANCHE 3 | 1% |
- Any SCS member in Tranche 3 whose performance is deemed unsatisfactory will receive no base pay award.
- Base pay awards will be based on the individual’s value or contribution to the Department and more widely, marked by:
- an assessment of the individual’s performance;
- the individual’s overall growth in competence;
- the challenge associated with the job relative to peers; and
- confidence in the individual’s future performance, based on sustained past performan
- All base pay awards will be paid as a percentage of the individual’s salary. The overall targets for performance tranche distribution for SCS staff are:
Tranche 1 : 25%
Tranche 2 : 65-70%
Tranche 3 : 5-10% - The Progression Target Rate for Pay Band 2 was removed with effect from 1 April 2006 and it has been removed for Pay Band 1 from 1 April 2008. In practice this means that there will no longer be capping arrangements in place on consolidated pay progression for those staff who are not Tranche 1 performers.
Pay Decisions
- Pay recommendations on tranche allocation for Grade 5 level will be considered at Departmental Pay Conferences comprised of the Permanent Secretary and line managers of SCS Grade 5 staff. The tranche allocation for staff at Grade 3 level will be determined by the Permanent Secretary. Each Permanent Secretary will then bring to the NICS SCS Pay Committee his or her proposed Tranche 1, 2 and 3 awards for both Grade 5 and Grade 3 level staff (in line with the distribution at paragraph 11 above).
NICS SCS Pay Committee
- The role of the NICS Pay Committee is to ensure consistency of outcome with the terms of the agreed pay strategy and to provide a moderation role if required. The Committee will consist of all NICS Permanent Secretaries and will be chaired by the Permanent Secretary of the Department of Finance and Personnel. The Head of the Civil Service will not participate in moderation discussion.
- Pay recommendations are not final until after any SCS Pay Committee moderation, and pay recommendations should therefore not be divulged to individuals until the Committee’s task is complete and each Permanent Secretary has been informed in writing by the Secretary of the Pay Committee (the Director of Central Personnel Group).
Bonuses
- Eligibility for non-consolidated bonuses is distinct from the considerations for the base pay award. Permanent Secretaries have responsibility for determining the award of non-consolidated bonuses for both Grade 5 and Grade 3 level staff. In considering bonus allocations for Grade 5 level staff, Permanent Secretaries should take the views of the line managers of Grade 5s at the Departmental Pay Conference.
- The SSRB Report 2008 recommended that the bonus pot for the SCS pay award should be increased by 1% to 8.6% of the SCS paybill. It has been determined that approximately 75% of NICS SCS staff should be eligible to receive a non-consolidated bonus, split equally across the three levels.
There will be 3levels of Non- Consolidated Bonus Payments for SCS staff at Grade 5 and Grade 3 level.
| Level |
Amount |
Distribution |
|---|---|---|
| Level 1 |
£10,500 | 25% |
| Level 2 |
£7,750 | 25% |
| Level 3 |
£5,000 | 25% |
| No Bonus | 25% | |
| Total |
£1,103,250 99.59% of Bonus Pot | |
- Eligibility for a non-consolidated bonus should reflect achievements against performance objectives and the leadership and professional skills demonstrated in meeting these objectives. Specifically, the criteria to be used in considering the award of non-consolidated bonuses are:
- Whether corporate, business and capacity related objectives have been met or not and to what degree;
- Judgements about how the objectives were achieved and in particular whether the leadership behaviours and professional skills part of the Professional Skills for Government framework have been demonstrated or not and to what degree;
- Additional consideration may also be given to the degree of difficulty or ease in meeting the objectives in the light of actual events.
- The following definitions will determine the level of bonus to be paid to those who meet the eligibility criteria:
| BONUS LEVEL |
DEFINITION |
|---|---|
| LEVEL 1 |
Achieved objectives despite the most difficult political, operational and economic environment, displaying exceptional leadership in the business area and more widely. |
| LEVEL 2 |
Achieved objectives despite moderately difficult political, operational and economic environment, displaying a high level of leadership in the business area and more widely. |
| LEVEL 3 |
Achieved objectives encountering only some political, operational and economic obstacles, displaying leadership in the business area and more widely. |
Pay Progression
- It has been agreed that a special feature of the 2008 SCS pay award should be an attempt to address some structural issues with the SCS pay system which have resulted in a lack of pay progression for those at or near the bottom of Pay Band 1 and the fact that some staff in this category are paid less than staff in the grade below. Restrictions on the size of the SCS pay award mean that measures to address this issue will have to be tightly targeted.
- For the purposes of this exercise the following rules will apply:
- The base pay element of the 2008 pay award will first of all be effected.
- Following the application of increases to the base pay award, SCS staff within the following parameters will be identified
- Staff in Pay Band 1 in the grade for 5 years or more on 1 April 2008; and
- Staff with a salary of £ 62,407 (max of Grade 6) or less on 1 April 2008 (following award of 2008 pay increases);
- Each officer identified will receive an additional £1,000 increase to their base pay on a consolidated basis.
- Officers with a salary between £62,408 and £63,407 and 5 years or more in the grade will be considered for a payment on a consolidated basis of a value up to £999 to ensure that their pay has not been surpassed by that of an officer benefiting from this special exercise
Promotion Increases
- Promotion shall be defined as a permanent move to a post in a higher pay band. On promotion an individual’s base pay will either increase to the minimum of the higher band or he/she will receive a 10% rise, whichever is the greater. The same principles will apply to staff on temporary promotion.
Pay Communication
- Pay decisions by the Pay Committee will be communicated in writing to each member of the SCS by their Permanent Secretary.
Appeals
- Staff can appeal against the outcome of the Pay Committee within 10 days of the date of their pay notification by the Permanent Secretary, using the NICS Grievance Procedures. The Pay Committee’s decision cannot be challenged on the basis that an individual simply disagrees with the assessment of their contribution in relation to that of their peers. The grounds for appeal must be made on the following issues:
- information that was not considered; and/or
- failure to apply due process.