PAY 2018 - GEC agrees offers are unacceptable

03 Sep 2018

DWP has today published its pay offers for 2018. There are three offers covering three specific groups of staff

  • The 2018 review of the employee deal covers AA to HEO grades, including all who opted in or opted out of the employee deal
  • The 2018 pay offer for all SEO to grade 6 grades
  • The 2018 pay offer for members not on DWP terms and conditions.

PCS response

The DWP GEC met last week and agreed the following statement:

“This meeting notes the contents of the final pay offers from DWP for 2018.

 The PCS DWP GEC believes the pay offers are unacceptable for all grades, whether in or out of the employee deal, because:

  • the DWP has chosen not to make a business case to ask the Treasury for more money
  • the DWP has decided not to meaningfully review the Employee Deal despite a significant increase in inflation
  • the DWP has decided to distribute an underspend of the non-consolidated pot, which equates to £1.5 million, in a way that we believe is not fair or equitable

As a result these pay offers have:

  • Provided a below inflation increase for a large number of members
  • Provided no more money for opted-out members getting only 0.25%
  • Restricted the pay rise for most SEO to Grade 6 members to 1%
  • Provided a further pay freeze for most members not on DWP terms and conditions

Furthermore we welcome the opportunity, agreed by the DWP, to allow us to consult our members more widely and agree to hold a meeting in every workplace to consult every member and gather their views before giving a full and final response to the DWP.”

The 2018 review of the employee deal

Consolidated pay

There are only two changes to consolidated pay for staff covered by the Employee Deal from the payments outlined in 2016.

  1. HEOs in the SLPZ pay zone will receive the same consolidated pay increase as HEOs in the national pay zone. This continues to address the anomaly from the 2016 pay offer that disadvantaged HEOs in the SLPZs.
  2. Pay will be uplifted to ensure no employee will fall below the National Living Wage of £7.83 per hour. (This is required by law)

Allowances

Allowances that are fixed cash rates will increase by 1.5%.

EWHA

There is a restatement of the commitment to a final review of EWHA to review the options available, to ensure that that staff who continue to claim EWHA will not be worse off when EWHA ceases in July 2019. There is a commitment to ensure that this review takes place in advance of the 2019 pay negotiations.

Non-consolidated pay

These payments have been made in August salaries as explained in the members' briefing. 

Grade              Box 1              Box 2

AA                   £550                £450

AO                   £625                £500

EO                   £750                £500

HEO                £800                £500

Non-consolidated underspend

After paying the same non-consolidated payments as in 2017 for all DWP grades there was a significant underspend of £1.5 million from the non-consolidated pot. All of this money has been diverted by DWP to topping up SEO to grade 6 pay and none of it has gone to AA to HEO grades despite the underspend accruing from all grades.

The underspend arose from a combination of a reduction in staffing from 2017 and DWP’s paybill increasing due to the higher employee deal payments.

 DWP could, as PCS argued, have diverted some, or all, of the £1.5 million non-consolidated underspend to top up the pay of opted out staff. But they refused to do so.

Other areas

There were a number of areas where the negotiators pressed DWP to improve the consolidated payments on the employee deal.

No additional money

The key problem in the 2018 review of the employee deal is that there was no additional money available to increase consolidated pay other than small amounts in the two areas mentioned above. DWP has made no business case to the Treasury to seek additional money to increase consolidated payments to staff covered by the employee deal.

DWP also says its current budget is too tight to be able to release any funds for pay yet they are constantly spending huge sums on overtime. Money that could be spent on members’ pay.

Without additional money being available it makes it impossible to use the annual review of the employee deal to secure improvements to consolidated pay to, for example, address changing external factors like inflation as was agreed when the deal was signed in 2016.

Inflation

CPI was 2.4% during the negotiations. Despite a significant number of staff covered by the employee deal set to receive a below inflation increase, there is no increase to reflect the increase in inflation over the last 12 months, only an acknowledgement from DWP that inflation has increased.

Opted-out staff

There is no increase to the 0.25% paid to opted out staff. Many opted out staff are now paid far below the employee deal minimum of their grade creating a long term structural pay problem for the department.

For example, an opted out AO in the national pay zone, who was on the minimum in 2016, is now paid £2,516 ayear less than a new entrant AO joining DWP today and is even paid below the £8.75 an hour rate recommended by the Living Wage Foundation.

Opted out amnesty

PCS has been pressing DWP to use the review to allow staff who opted out to review their decision and opt in to the employee deal if they now wish to do so. DWP refused to agree to allow this in 2018.

DWP have not completely ruled this out at some point in the future but are likely to only agree to do so if it helps them deliver what they call greater efficiencies and business transformation.

SEO to grade 6 2018 pay offer

Consolidated pay

The 2018 Treasury pay remit limited the amount of money that DWP could spend on SEO to Grade 6 pay to 1.5% of the SEO to Grade 6 paybill. Of this 1.5%, 1% had been funded in the SR15 spending review. The additional 0.5% was unfunded by Treasury. DWP will be spending the full 1.5% on SEO to Grade 6 consolidated pay.

DWP have not made a business case to Treasury for additional money to be spent on SEO to Grade 6 pay despite the structural problems they have with the HEO Maximum overtaking the SEO Minimum and the long pay ranges in these grades with no meaningful progression.

Within the 1.5% cap it is impossible to make a satisfactory offer. DWP have made slightly higher consolidated increase to the Minimums to address the HEO overlap and to begin to shorten the grade spans. This though is paid for by members not on the Min receiving less than a 1.5% increase.

SEO

  • SEO minimum to be increased by 2.2% (3.04% in Outer London).
  • SEO pay between the minimum and the maximum to be increased by 1% in all pay zones.
  • SEO maximum to be increased by 1% in all pay zones.

Grade 7 and grade 6

  • Minimums to be increased by 2.2% in all pay zones
  • Pay between the Minimum and the Maximum to be increased by 1% in all pay zones
  • Maximums to be increased by 1% in all pay zones.

Specialist pay

Increases of a percentage value similar to the above will be paid to all grades.

Non-consolidated pay

These payments have been made in August salaries as explained in the members' briefing on non-consolidated pay.  

Grade              Box 1              Box 2

SEO                £850                £600

Grade 7           £1,150             £600

Grade 6           £1,450             £600

Non-consolidated underspend

As explained above, after paying the same non-consolidated payments as in 2017 for all DWP grades, there was a significant underspend of £1.5 million from the non-consolidated pot. DWP has decided to use this money to top up the consolidated pay of the SEO to grade 6 staff with a non-consolidated payment as follows:

  • SEO minimum topped up to 3% (0.8% non-consolidated). Outer London excluded.
  • All other SEO to grade 6 staff, who receive a consolidated award of less than 2%, topped up to 2% (1% non-consolidated)
  • Top ups paid to staff with an ‘Exceptional’, ‘Good’ or ’Developing’ 2018 box mark.

DWP’s argument for spending the underspend in this way was a wish to reward the managers who had not benefitted from the higher consolidated increases that most staff on the Employee Deal had benefited from and to recognise the work they had done in implementing the employee deal.

Allowances

To be increased by 1.5%

Staff not on DWP terms and conditions

DWP have this year made a separate offer to staff not on DWP terms and conditions. Previously these staff had been covered by paragraph 19.17 of the employee deal, appendix one. This was contradictory as an earlier paragraph of the employee deal stated that these staff were not covered by the employee deal.

There are 969 staff not on DWP terms and conditions. Of these 479 are ex-local authority fraud staff and 426 are ex-HMRC staff.

Despite making a separate offer there is no change from what these staff received in 2017.

Consolidated pay

  • If staff retain a right to contractual pay progression, this will be paid until they reach their retained pay scale maximum.
  • Staff without a right to contractual pay progression will receive a 1% consolidated increase until they reach their retained pay scale maximum.
  • No increase to retained pay scale minimums or maximums
  • Staff with no retained pay scale receive 1% until they reach the maximum of their equivalent DWP grade.
  • No increase to staff who are above the DWP maximum for their grade.

Non-consolidated pay

This is the same as for staff on DWP terms and conditions.

A further briefing on pay for DWP staff not on DWP terms and conditions will be issued shortly.

2019 and beyond

DWP has given a commitment to early engagement with PCS on what a future, longer term, pay strategy may contain for all DWP grades.

Next steps

30 minutes flexi credit, plus reasonable travel time have been agreed for pay meetings with members on DWP premises to discuss and consult them on these pay offers. These meetings will take place from 3 September to mid-October. The GEC has agreed to ensure that a members’ meeting on pay is held with a GEC speaker in all DWP offices over this period.

Branches should ensure members meetings are arranged in all their offices during this period and email PCS DWP Group President Fran Heathcote - fran@pcs.org.uk - of when they are so a GEC speaker can be arranged. Meeting times should be agreed with local management to minimise disruption to the business.

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