Public and Commercial Services Union

PCS parliamentary brief on regional pay

The MoJ has introduced a new pay system, known as the Deal, which seeks to link pay to the local labour market. The new pay system has five regional pay ranges.

Pay range 5 (National) has the lowest starting pay of any government department and its introduction is an attempt to reduce civil service pay in areas of relative social deprivation.

It is usual within a pay system to reflect long standing and significant pay differences, for example London, the south east and major urban centres. However this is the first pay system to divide workplaces outside those areas into a higher and lower national pay scale.

The major criticisms of regional pay

• Public sector earnings provide a significant stimulus to regional economic performance. If extended to other parts of the public sector (Treasury remit for public sector in 2007 recommends this) then it would have a significant negative effect on regeneration within the English and national regions. Consequently the policy runs counter to the stated regional regeneration policy of the Department for Communities and Local Government (DCLG); “we aim to narrow disparities in growth rates between different regions by boosting the economic performance of all regions and helping English cities to compete in the international market. This will help us to create vibrant, diverse and attractive places where people want to live, work and play”. (DCLG website).
• Pay range 5 covers many areas of social deprivation. Lowering pay in these areas will mean that it will be difficult to attract high calibre staff to work in these areas and service to the poorest communities will suffer.
• The MoJ claim this system is based on sound economic data. However there is no regional inflation data published and there is no accurate data set that reflects regional or local pay variations. The MoJ system is not objective, using hard economic analysis; subjective management judgements were used to allocate workplaces to regional pay zones.
• Outside London and the Southeast there is only a small regional variation in average earnings between regions. This difference is too small to embed in a pay system.
• 75% of the MoJ staff affected by regional pay are women. The variations in female average earnings is even small than that of men. The lack of variation in average earnings for women is because of the influence of the national minimum wage and is important element in delivering government priorities on reducing child poverty.
• What has happened so far in the MoJ?
• The new pay system was introduced during August 2007. However the lowest pay range (National) was only introduced for new employees and is subject to a review which will commence shortly. PCS would like MPs to lobby the Rt Hon Maria Eagle MP for the withdrawal of the lowest regional pay range for all employees.
• The costs associated with this would currently be minimal. If the MoJ could afford to pay all of its employees on 1 August 2008 the National+ rate then it can afford to continue to pay staff at this level.
• The additional costs transferring new starters in the National pay range to the National+ pay range will not take effect for 5-6 years. The turnover rates for staff (MoJ currently 10-15%) mean that a significant proportion of employees do not reach the maximum of their pay band in any event.
• Retaining new starters on the lower pay range than current employees may also indirectly discriminate on grounds of race. New employees in many urban areas of the north are more likely to be from ethnic minorities than existing staff. Therefore any pay system which pays new staff less than existing staff may have a discriminatory effect.

Write to your MP

On 10 June 2008 in response to questions in the House, the Parliamentary under secretary of state for justice,  Maria Eagle MP stated that she was happy to receive representations from MPs on this issue. Therefore, PCS is asking you to: