Most civil servants are set to receive a pay rise of around 5% this year, the Cabinet Office has said.
The Department this afternoon published the 2024-25 pay guidance for civil servants below the senior civil service level. The guidance confirms that departments will be able to offer an average pay rise of up to 5%, relative to a 2% inflation rate.
Senior civil servants are also set to receive a 5% pay rise, after the Chancellor announced in a speech to the House of Commons today that the government had accepted the recommendations of all public sector pay review bodies for this year’s pay rises.
The government has yet to confirm details of the recommendations made by the Senior Salaries Review Body, the SCS’s pay review body. However, the FDA union, which represents senior civil servants, said the government had accepted a recommended 5% pay rise for senior civil servants.
Reeves said the decision to accept all of the pay review body’s recommendations was “the right decision for working people and, importantly, for the people who use our public services, giving hard-working staff the pay rises they deserve, while ensuring we can recruit and retain the people we need”.
The pay rises will cost £9.4bn more than the previous government had budgeted for pay rises, the Treasury said.
Reeves said Rishi Sunak’s government “gave no guidance on what could or could not be awarded to pay review bodies” ahead of their reviews. “That’s almost unheard of, but that’s exactly what they did,” she said.
The Chancellor also placed the pay decision in the context of last year’s public sector strikes, which affected all civil servants. “The last government presided over the worst series of strikes in a generation,” she said. “It caused chaos and misery for the British public, and wreaked havoc on the public purse. NHS strikes alone cost taxpayers £1.7 billion last year.”
Alongside confirming pay decisions for 2024-25, Reeves announced that departments will have to find £3bn of savings this year by cutting back-office spending by 2%, as well as reducing spending on consultants and communications.
The Treasury has confirmed that it will remove the previous government’s cap on civil service staff numbers in favour of “an approach that ensures departments take into account overall value for money in their resourcing decisions”.
In a document setting out how the government plans to address budget pressures, he also said the government will “develop a strategic plan for a more effective and efficient public service, including bold options to improve skills, harness digital technology and deliver better outcomes for public services”.
More flexibility for departments
The guidelines on the remuneration of delegated civil servants provide that departments will be able to grant average pay increases of up to 5%. Unlike last year’s pay agreement, this year’s mandate gives departments the flexibility to decide how to target pay increases.
The guidance states: “This 2024-25 salary year is the final year of a three-year period for departments. It is essential that departments consider which priorities are best addressed in the final year of the current spending review, and how these link to longer-term objectives and broader workforce priorities, without limiting the options available in the next spending review.
“This year, departments have the flexibility to target their pay increases in a way that best suits their needs. This will allow departments (and other affected organisations) to offer their workforce a meaningful consolidated increase, while providing the flexibility to address pay anomalies or broader workforce issues, such as recruitment and retention challenges.
“Ministries should pay particular attention to issues such as the reduction in salaries due to increases in the national minimum wage.”
Last year, for 2023-24, departments also had the option to offer up to 5%, but this consisted of a maximum of 4.5% for all delegated grades plus 0.5% for lower pay bands. Civil servants were also given a one-off £1,500 cost of living allowance to break a strike deadlock after inflation soared to 11%.
The previous year, the mandate had set an average pay increase of 2%, plus an additional 1% where departments could successfully argue that the additional increase would help staff retention, productivity or other priorities.
“A step in the right direction”: the unions’ response
Public sector unions welcomed the news but expressed a mixture of satisfaction and disappointment in their reactions.
FDA union general secretary Dave Penman said: “This pay rise for civil servants is clearly the right decision.
“For too long we have seen wage erosion due to short-term decision-making, with a broken pay system leading to record turnover in the civil service and causing a recruitment and retention crisis across the public sector.
“I recognise that this announcement comes in a difficult economic climate and that some departments may have to make difficult decisions to meet the efficiency targets outlined by the Chancellor, but I am pleased that the Government has recognised that public sector pay must be a priority. If we want world-class public services, we need to invest in the civil servants who deliver them, and this announcement is a first step in the right direction.”
Penman added that there was “still much work to do and the FDA will continue to work with government to improve the pay system so that it properly rewards hard work, attracts the skills and expertise we need and provides the progression needed to attract and retain talent.”
Mike Clancy, general secretary of the Prospect union, which represents public sector specialists, said the pay rise, along with the government’s decision to remove Jeremy Hunt’s staffing cap, was a “welcome first step” but also raised the need to reform the process by which salaries are paid.
Clancy said: “While we welcome the significant improvement in real value and relative position compared to other public sector workers in recent years, we remain of the view that the process for paying wages is flawed and irreparably broken.
“We have already indicated our willingness to work constructively with ministers and officials to put in place a process that is fit for purpose and delivers fair rewards and progress.”
Fran Heathcote, general secretary of the PCS, the largest public sector union, agreed the pay rise was “a step in the right direction” but questioned the decision to give civil servants a lower pay rise than other public sector employees.
“Our national campaign continues to win concessions for our members,” she said. “Having doubled the mission guidelines last year, secured a £1,500 lump sum and forced the abandonment of cuts to redundancy conditions, we have now secured a 5% pay rise – 3% above the current rate of inflation.
“However, while we see this as a step in the right direction, there is no justification for civil servants receiving less than other public sector workers.
“Our hard-working members are the lifeblood of the country and they face the same cost of living pressures as everyone else, so why should they be rewarded any less?”
Like Penman and Clancy, Heathcote also expressed concerns about the pay system.
She said the government “missed the opportunity to adopt our proposals to immediately address low wages and structural problems.”
Heathcote added: “While we welcome the new government’s change in tone and atmosphere towards the public service, we want immediate discussions to address all of our members’ concerns.”
