Civil Service overview (see note ii)

The Civil Service comprises some 486,000 staff working in central Government Departments and Executive Agencies.  It covers most of the broad types of staff found within the Hong Kong Civil Service (HKSC), including Prison Services, Custom & Excise and Immigration staff.  It however excludes police and fire officers and staff in the equivalent of a number of specific HKCS grades involved with local community service delivery eg teachers, medical staff, social workers, etc.  There is no direct equivalent at central or local level to the Government Flying Service.

　

Executive Agencies, and some Departments operating on Agency lines, comprise 77% of the Civil Service (effectively those carrying out programmes and delivering services at national level). These bodies have no separate legal status and are part of their parent Departments, but have a substantial degree of administrative delegation extending to separate pay and rank/grading structures.  Some are designated at self-financing trading funds, similar to those in Hong Kong.

The top 3,300 posts  (0.7% of the Civil Service) form the Senior Civil Service (SCS), including both general administrator/managers and top professionals. They are required to work across the Service to support a unified administration. Unlike all other groups, they are paid within a single unified pay structure.

The Civil Service is still seen as a career system and so relatively little use is made of fixed term contracts (FTC), probably no more than 5-10% of senior civil servants and/or specialist staff. The general trend appears to be away from the use of FTCs. Except where otherwise provided, FTC staff have a salary in the contract (with a bonus or performance element usually linked to their Agency’s target), which is revalorised broadly in line with the revalorisation element of any general pay award, however they do not typically become part of the main pay progression mechanism.

The Civil Service generally enjoys a justified reputation for a high level of honesty, integrity and lack of corruption. This reflects the Service’s driving ethics, which include:

· Political neutrality and continuity

· Appointment and promotion on merit (ensured by the independence of the recruitment process)

· Fairness and lack of bias or favour to all citizens.

　

Recent Public Sector Reform (see note iii)

The UK Civil Service has undergone major reform over the course of the past 20 years.

Under the Conservative Government 1979-1997, the impetus was largely a politically driven programme to reduce the size of Government, and to retain in public hands only an irreducible core. Under the post-1997 Labour Government, the thrust has been one of efficiency and pragmatism. 

Key reforms have included:

· Financial Management Initiative (early 1980s) aimed to introduce a focus on the ‘cost of an output’ as a lever to improve productivity and service quality.  As a result, management information and costing systems were installed throughout the Government machine, albeit slowly.

· Next Steps (1988) is considered the most significant change in the structure of the civil service since the Northcote-Trevelyan reforms of the 19th century:

-        The 1988 report recommended that the executive functions of government be carried out by distinct units within Departments, called Executive Agencies, with the aim of delivering better quality of service to the public.

-        Executive Agencies have defined responsibilities, a sense of ownership and clear objectives set out in a published framework documents.  Ministers set key performance targets covering quality of service, financial performance and efficiency, and allocate resources. Chief Executives, the Agency heads, who remain civil servants, are responsible to their respective ministers for their performance and expenditure.

-        140 Agencies and 4 Departments are running on Next Step lines, covering about 77% of the Civil Service.  Some Agencies operate as self-financing trading funds similar to those in the Hong Kong Government.

-        The initiative has resulted in major productivity and quality improvements.

· Competing for Quality (1991) aimed at enhancing the competitiveness of the public services by comparing and potentially outsourcing services to the private sector, through benchmarking and market testing. This has now been replaced by a policy called “Best Value” in local government, and a similar discipline in central Government, which is less presumptive about outsourcing and allows a competitive internal provider to carry on. 

·          Citizen’s Charter Programme(1991), launched as a ten-year programme that aimed to improve the quality of public services and make the Civil Service answer better to the wishes of their users, through the establishment of charters:

-        Now all central Government Departments and Agencies are required to publish information, set standards and have complaints procedures in place

-        It has had a significant effect on the attitudes of front-line public servants in local and central Government, and has reinforced the cultural ethic of public servants in favour of working in the interests of users and not just for the profit and loss account.  There is evidence of improving quality of service standards achieved in parallel with the productivity improvements

·          Civil Service White Papers: Continuity and Change (1994) and Taking Forward Continuity and Change (1995) set out the Government’s expectation of further improvements in performance within tightly controlled running costs. From 1995, Departments were to prepare Efficiency Plans each Spring setting out how they intended to deliver the savings required by running costs constraints. In addition, all Departments with 12 or more senior staff were to complete a Senior Management Review by April 1996 to eliminate unnecessary layers of management and to inform the creation of the Senior Civil Service (SCS). The subsequent Senior Management Review produced a reduction of 23% in the SCS over the period 1994 to 1996.

· Comprehensive Spending Review (2000) was first conducted in 1997 in two tiers at the departmental level feeding into the wider overall review conducted by a Cabinet committee of senior ministers looking across Government. It allowed the Government to bring public spending programmes into lines with its own priorities as a coherent set of objectives. It led to the introduction of public service agreements (PSA) between each Department and the Treasury, setting out measurable efficiency and effectiveness targets against which progress would be monitored.

· Review of the Cabinet Office(1998) by the Cabinet Secretary and Head of the Home Civil Service identified and proposed organisational responses to a number of perceived weaknesses at the centre of the government concerning:

-        Linkage between policy formulation and implementation

-        Dealing with cross-cutting issues of policy and service delivery

-        Looking ahead to future opportunities and threats

-        Reviewing the outcomes of government policies and the achievement of objectives.

　

· Modernising Government (1999) set out the vision and the package of reforms for the modernisation of the government. It aimed at:

-        Ensuring that policy making was more joined up and strategic

-        Making sure that public service users were the focus in policy delivery

-        Delivering public services of high quality and efficiency.

It led to a strong government focus on the management of cross-cutting issues and subsequently the building of a framework conducive to better development and delivery of cross cutting issues.

· Post-Election Changes (2001):after the 2001 General Election, a number of new co-ordinating and monitoring units were established in the Prime Minister’s Office and the Cabinet Office to champion ‘delivery’ of the Government’s programmes (ie ensure key programmes were actually carried through), to modernise public services, and to review future strategy. Monitoring of PSAs was to be intensified by the Cabinet Office and the Treasury acting jointly.

Impact of the reforms

The various reforms have led to a significant drop in the size of the Civil Service: 4% annually over the 1990s. Of this, 1% was “boundary change” with privatisation and outsourcing, and 3% from increased productivity and cutting inessential services.

In addition to these productivity gains, the measurable quality-of-service standards have increased as a result of the targets set to the Executive Agencies combined with the management freedoms given to them to achieve their targets. Quality of service includes processing times for issue of licences, passports etc; improved waiting times at counters in social security offices and in phone-answering; improved complaints mechanisms which have focussed attention on meeting the expectations of ‘customers’; and improved levels of accuracy in tax handling; etc.

On the economic side, an important driver has been not only cost-saving but transfer of risk through privatisation, the aim being to eliminate large publicly-funded deficits, and force price increases and efficiency improvements. This has generally been successful, with the employment conditions of Civil Service staff transferring to the private sector protected through European Union based regulations, specifically Transfer of Undertaking (Protection of Employment Regulations) 1981 (TUPE). More recently, however, privatisation of the railways has been highly unsuccessful and as a consequence, political and public enthusiasm for privatisation has waned, at least temporarily.

In recent years there has been a much stronger emphasis on efficiency; an obligation to the taxpayer to provide more for less; and to provide a high standard of service to meet the convenience of the citizen, ie away from a producer-led culture.

Pay specific reforms

Reform on pay arrangements has been progressive and far-reaching over the last ten years. Three key developments in the Civil Service (note these developments are not applicable to the police, fire or other Local Authority staff), have been:

· Delegation of pay administration authority to all departments and agencies.  Each Department/Agency can now negotiate their pay system, pay levels and rank/grade structure for staff below the Senior Civil Service, replacing national pay negotiations. These arrangements apply equally to the ‘disciplined’ parts of the Civil Service as to the rest, ie Customs and Excise Officers, Prison staff and Immigration Officers (though none of these is ‘disciplined’ in the Hong Kong sense).

· Replacement of Senior Civil Service ranks/grades by a ‘job-weight’ rating system with a series of 4/5 pay bands each linked to part of a job-weight scale.  The Permanent Secretary of their Department, on the basis of their performance and the available pay budget, judges individual progress within a pay band.  The reform has aimed to allow the senior structure within different Departments/Agencies to develop appropriately within their means.

· Abolition of automatic annual increments (with the exception of the Prison Service), in favour of a variety of performance based systems.  This usually allows variable rates of progression up a rank/grade/job-weight scale according to performance against targets, contained by an available pay budget.

The result of introducing this delegated, performance based system has been a complete fragmentation of the old rank/grade structure.  It has provided individual Departments and Agencies with a much greater flexibility to set pay arrangements to meet their particular local circumstances and performance requirements.  

Overview of Current Pay and Administration Arrangements

Pay administration policies and principles

For the majority of staff the guiding principle until the early 1990s was comparability with the private sector and there were regular formal comparability reviews sponsored jointly by management and staff unions.  By the early 1990s, pay inflation was a diminishing problem and pay comparison was replaced (to the chagrin of the staff unions) by three new principles:

· Pay should be enough to recruit, retain and motivate; a principle mainly of use to management, though the unions could build on the need to motivate. This is underpinned by a test of affordability

· National pay negotiations should be replaced by delegated pay systems (and rank/grade structures) at the level of each Department and Agency

· Abolition (now complete apart from the Prison Service) of automatic annual increments related to length of service, and replacement by a variety of systems linked to performance.

Pay arrangements for all civil servants except the SCS, are highly devolved, though with control maintained through Treasury approval.  The single centrally-controlled pay system for the SCS which is not negotiated but laid down by the Government acts as a cap and unifying influence on the delegated arrangements for all other staff. Recommendations for the SCS come from an independent Senior Salaries Review Body (SSRB).

Pay structure and components

Grading and base pay structures

There is no longer a universal job grading system, with central grades/ranks abolished progressively from 1995.  Every Department/Agency has its own system within which there are a series of levels of jobs. In a big Department there will typically be 4 levels in the SCS and 5 or 6 below. Grades for specific jobs are determined under a Civil Service-wide job-weight rating scale called JEGS  (Job Evaluation Grading Scale, similar to the Hay system but unique to the Civil Service. When assigning which ‘grade’ applies to which job JEGS considers financial responsibilities, staff numbers, professional skills and competencies etc.).

To each of these job weight bands a pay band is attached.  Details of these vary between Departments/Agencies. Some have fixed pay points; all will have fixed minimum and maximum.  This pay band may also have ‘target levels’ for average performers after a given number of years. The pay band will be revalorised each year as part of the negotiations.  Most posts are now competitive so people already at a given level will have to compete with those seeking advancement or with external candidates if the post is open to the market. Education qualifications are not generally relevant although professional qualifications, current pay and previous related experience may influence entry pay.

Local Authority pay, including Police and Fire, has not yet fragmented to the same extent as the Civil Service pay.  For Local Authorities, national bargaining systems are available as a framework, however some Authorities vary or do not use national terms.  National bargaining systems determine annual increases in base rates of pay, changes to the position of minimum and maximum points on pay spines and changes to certain benefits and conditions of service.  For some negotiating groups, Local Authorities are free to place different jobs anywhere on the pay spine that they see fit.  Authorities may also choose to pay market supplements or other additions to basic pay.  If conditions change within an Authority's labour market, it may choose to regrade the job or change the components of non-basic pay.  For other negotiating groups Local Authorities may also choose whether to pay a spot salary for particular jobs or allow progression through a band linked to the national spine.  Authorities may also choose the size of bands within their pay structure and what factors influence progression through a band such as length of service, performance or competencies, but in general performance pay has not developed far in Local Government and annual increments remain the norm (c.f. "Pay in Local Government 2001" by the Local Government Employers Organisation - www.lg-employers.gov.uk).

Pay components

Apart from a few Departments/Agencies with one-off bonus elements, all Civil Service pay is ‘basic pay’.  There are relatively few bonus schemes in operation although some Departments/ Agencies have started to experiment with non-consolidated (non-pensionable) one-off bonuses in order to leverage a limited pay budget. But this approach remains to some extent unpopular and counter-culture in the UK Civil Service.

Generally most Civil Service allowances have been eradicated (through consolidation into base pay or buy-out arrangements), apart from overtime for most grades below SCS. It is still open to Departments to negotiate such allowances as part of their settlements, eg clothing allowances for certain jobs, but it is very limited. The Prison Service retains allowances for special skills and special jobs and they may also have low rent accommodation provided. Outside the Civil Service, Police and Fire also still include some cash allowances. Many systems have a locality adjustment, whether as an explicit allowance or by placing people in some areas higher in a pay-band than others, but these are not usually a significant proportion of basic pay.

Equally non-financial rewards do not figure heavily although there is some freedom, within the usual budgetary constraints, to use these. Forms of performance recognition awards, such as dinners, coupons or certificates for either the individual or the team, intended to supplement the motivational effect of the pay system are not a major part of any system, although many staff claim this to be a motivating factor. One example is a scheme operated by the Prison Service (c.f. www.hmprisonservice.gov.uk/corporate)that includes official commendations, certificates, flowers and gifts or recommendation for a Queen’s Honour.

Pay system and administration

Until the mid-1990s, pay for staff below the Senior Civil Service was negotiated at national level between the Treasury and the staff unions, within a national rank/grade structure.  Starting with some Executive Agencies, delegated powers were then given eventually to each Department and Agency; there are now around 170 separate pay negotiating units, each free (subject to constraints) to negotiate their own pay systems and levels and their rank/grade structure appropriate to their circumstances and strategic imperatives. The result is thus highly complex and fragmented. These arrangements apply equally to the ‘disciplined’ parts of the Civil Service as to the rest, ie Customs and Excise Officers and Immigration Officers (though neither of these is ‘disciplined’ in the Hong Kong sense). The Prison Service is the only significant exception (see below).

A ‘lid’ is kept on this system through a single centrally-controlled pay system for the 3,300 members of the Senior Civil Service. The SCS system is not negotiated but laid down by the Government in the light of an annual report by an independent Senior Salaries Review Body (which also recommends pay levels for the judiciary and for the Armed Forces at levels equivalent to the SCS, ie Brigadier and above), and for MPs and Ministers. The SSRB is one of six Pay Review Bodies for professional groups in the public sector who are not allowed, or at least not expected, to resort to industrial action – doctors and dentists; nurses and other para-medical professionals; the Armed Services; one for teachers which, following a period of militancy by them, was placed on a statutory basis some years ago; and now the Prison Service Pay Review Body set up in 2001 following prison officer militancy and the withdrawal by statute of their right to strike.

Movement within the pay band

In the United Kingdom, a key change in pay arrangements was the abolition (now complete apart from the Prison Service) of automatic annual increments, with replacement by a variety of systems linked to performance, usually by variable rates of progression up a rank/grade/job-weight scale according to performance against targets, but contained by an available budget.

As part of the Public Service Agreements, each Department aligns one-year targets with Departmental objectives, which cascade down each level of the organisation in the Department and its Agencies, ending with Personal Performance Plans for each member of staff.  These provide specific quantified and time constrained personal objectives to be achieved by each individual, which are monitored at least twice-yearly for each staff member to allow review and corrective action if necessary - much training is being devoted to making personal targets/ objectives more precise and quantifiable.A formal performance appraisal process is undertaken with predefined descriptions, and open-ended comments by both the appraiser and appraisee, and 360-degree feedback is being actively experimented with.

Progression through a pay band will be influenced by length of service, performance and competencies, and achievement of objectives.  Negotiation determines what percentage increase, or how many points up the band, an individual will receive for a given performance rating on a 3 or 5 point scale (sometimes called an ‘equity share scheme’ or a ‘fair share of the pay pot’).  For example, the Inland Revenue has a 3-box performance assessment system directly related to achievements of personal targets – Exceeded Targets, Achieved Targets and Failed to Achieve Targets.  Most other Departments still have a traditional 5-box qualitative assessment, though rooted in measurable achievement.  Typically on a 5 point scale and with 2.5% inflation, an average performer might get 3%, the top performers 7%, and poor performers nothing.  Management of the spread of these awards is generally done through a process of forced distribution. Generally bonus performance pay is not available, however a few Departments/ Agencies are experimenting to provide one-off bonus elements for special achievements or people at the top of their pay band.

System and mechanism for determining pay level and pay adjustment

Pay in the public sector as a whole has broadly matched that in the private sector, though often moving in counter-cyclical jerks – first led by the private sector and then vice versa. This was particularly true in the 1970s and 1980s when pay inflation was a major economic problem and public sector pay freezes led to subsequent anomalies. Comparison to the private sector is now not an explicit part of the process. 

Noticeably, however, pay of professionals, specialists and senior staff generally lags behind that of their private sector equivalents.  Currently, mechanisms used by SSRB and other Review Bodies to assess pay adjustments vary depending especially on the degree to which reasonable comparators exist. Surveys are used to inform, but not lead, the SSRB’s recommendations as other criteria such as recruitment and retention, performance management, affordability, and recognition of a “public sector discount” will also influence their decision. The SSRB has been influential in recent years in advice on developing systems for performance pay at these levels (c.f. www.cabinet-office.gov.uk/civilservice/scs/index.htm).

Other Review Bodies commission similar studies where appropriate but there is no general pattern.  They will also receive representations from staff associations etc, but not in ‘negotiating mode’. 

Arrangements for the Disciplined Services

Pay settlements for Custom & Excise, Immigration, Police and Fire Services continue to be negotiated in the traditional way. The first two groups also use performance pay in much the same way as the rest of the Civil Service. As a result of previous militancy, and a resultant statutory ban on strike action, the Prison Service is the only one of the “disciplined services” to have a separate Review Body rather than a negotiated system

We have provided below some discussion of the pay administration systems for Prisons, Police and Fire Services (within the Local Government framework) to illustrate the differences in systems. 

·          The Prison Service Pay Review Body will provide advice on the pay of prison officers, although the Government is not bound to accept it.  The Prison Service have introduced performance related broad-banding for senior and administrative staff, but the rank and file still have time-based increments.  An extension of performance provisions to rank and file staff remains on the agenda, however, although significant progress in the short term is unlikely in the light of current militancy.

·          The pay of police staff is negotiated with staff unions within a statutory framework called the Police Negotiating Body (PNB).  The police also have a statutory ban on striking, which although seeming to reduce their negotiating position has not in practice due to the urgency of crime prevention and the need to raise recruitment.  These factors have combined to keep police pay relatively high.  Government is negotiating competency-based additions with the PNB (expected to be achieved by 75% of officers), or discretionary additions for officers undertaking the most demanding tasks.  This is the closest the Police Service has been yet to performance pay. 

·          Individual Local Authorities have the power to negotiate and set pay and terms for the Fire Services. A recent survey by the Local Authorities Employers Organisation indicates that many Local Authorities have rejected the concept of performance related pay.  However Local Authorities do support the provision of research guidance on performance management, and performance and competency pay.

The Experience of Changing Pay Administration Arrangements

Experience of replacing fixed pay scales

The process of changing fixed pay scales in the Civil Service is seen to be generally successful, however staff unions were initially resistant to the dismantling of the national bargaining system.  Consultation occurred on a case by case basis, and the move was progressive, first starting with Inland Revenue in 1990, then other agencies as part of the ‘next steps’ reform.  Training and exchange of experience was a strong part of the process.

While responsibility has been delegated to Departments/Agencies, in practice formal negotiating guidance was (and still is) given to all delegated units by the Treasury, setting out the economic background and stressing the need for performance systems to be strengthened (c.f. www.pcs.org.uk/pay/negotiations/paynews/05remit.htm).  Within this system, each unit is required not only to live within its budget, but also to seek prior approval from the Treasury of a ‘pay negotiating remit’ with a business case for any structural change. Although in practice this leads to something approaching a ‘going rate’ for annual awards, it has also over a period resulted in significant variations in pay and rank/grade structures – with the partially perverse effect that pay for similar jobs in different Departments can often differ by as much as 10%. (This causes serious problems when, as recently, Departments are merged.) The remit system also applies to Non-Departmental Bodies (NDPBs).

Experience of introducing performance based rewards

Pay for all within the central Civil Service, including the SCS and Permanent Secretaries, is broadly performance related (although time related, annual fixed increments are still in place for most of the Prison Service).  Many Departments used external consultants to advise and incorporate a private sector perspective into the design of their systems. This was supplemented by a good deal of exchange of experience between Departments or Agencies.

Performance pay is not funded as a distinct budget – indeed, nor is pay itself, as although assumptions are made by the Treasury and Departments/Agencies in setting overall budgets, Departments/ Agencies have the power to vire between pay and other items of current expenditure. Effectively an assumption is made that pay per average person will increase by x% (typically a little above inflation), but that there will be an off-setting reduction in staff numbers by increased productivity. The staff number production will also take account of any predicted increase or reduction in the volume of work. The pay element of the current budget will be a product of these factors. As explained already, the amount received by an individual will be above or below the average depending on performance – there is no automatic base pay increase.

In practice, pay budgets in the United Kingdom have limited the ability to award outstanding performers any significant motivating increases in pay.  Although Ministers and managers generally believe performance pay must have a beneficial effect, there is little compelling independent evidence that performance pay on its own does so (though some staff, especially younger staff, appear to regard it as ‘fairer’ than old systems which took no account of performance contribution or effort).  There is more consensus that performance pay, as a part of a wider performance management system including personal targets and assessment, does contribute to improvement.  Adjustments have been made in 2002 for the SCS that increase awards to outstanding performers, but effectiveness will still depend among other things, on the adequacy of funding. Staff and especially unions have consistently resisted performance pay, arguing that it does not in itself add to performance motivation.

Experience of simplification and decentralisation of pay administration

The result of the delegated system has been a complete fragmentation of the old rank/grade structure (and a certain amount of inter-Departmental confusion about comparability of levels), but also a considerable reduction in the power of the unions to hold the Government to ransom by industrial action (there have been no strikes or strike threats at national level in recent years).  Industrial action is still occasionally threatened in individual Agencies. There is no clear evidence whether the effect of delegation has been to hold general pay levels below what they would otherwise have been: many observers think that if anything the staff unions have ‘won’.  On the other hand the development of rank/grade structures and performance pay systems geared to the circumstances of each unit is generally thought to have contributed to the growth of productivity.

　

Points of Interest

The developments in pay arrangements in the UK Civil Service, outlined above, have evolved over the past 10 years to a large extent in response to, and as a direct result of, the creation of Executive Agencies. The focus has been on promoting flexibility and performance management and has been achieved through:

·          Significantly delegated powers to meet market needs and to ensure local relevance rather than bureaucratic rigidity

· Less rigid job classification process

· Setting clear targets at unit and personal level rather than generalised qualitative assessments of performance

· Extended use of performance related pay. 

The result of this has been to successfully curb inflationary increases, at the same time developing a performance culture that has demonstrably improved quality and productivity.  This has maintained a population of high calibre staff, with open competition for jobs and a flatter hierarchy that has meant greater freedom of movement across departments for staff to pursue their careers.

A number of key success factors can be identified in arriving at the current situation:

· In the mid-90s trade unions were generally weak, having been subjected to a rolling programme of power reducing reforms during the 1980s. This allowed Civil Service management to implement many pay-related changes with more ease than if there had been coherent national-level opposition

· The move to delegation involved an act of faith, and a careful balance between ‘letting go’ to trusted managers and retaining some central co-ordination.

· A significant investment in training and exchange of experience in managing performance and performance measures was made

· Adequate methods of assessing relative performance (against targets/objectives and/or against other staff) had to be developed over time.

Current arrangements have made a positive contribution to creation of a performance culture – although only when linked to other aspects of a performance management system such as targets and regular assessment against objectives or other staff.  However, there are now 170 separate negotiating units and recently issues of internal relativity have been raised as a result of the merging of a number of Departments. Examples of different terminology exist both within and between Departments, such as a ‘Deputy Director’ in the Cabinet Office is roughly equivalent in job-weight/pay terms to a ‘Director’ in the Department of Trade and Industry.  There are also those who question whether the cultural coherence of the Civil Service has been damaged through the fragmentation of pay systems, and thus its ability to work for a collectively responsible Cabinet.

Other concerns are emerging about retention, especially of the SCS and scarce skills groups. This may be fed by the general perception that one of the main causes is that performance pay schemes have not been adequately funded to have a real motivating effect. This has limited the spreading-out of actual pay between the best and the weakest performers, and has kept public sector pay for senior posts and scarce skills below what is needed to ensure adequate quality, especially where the intention is to attract new talent from outside the Civil Service. Some would argue that it needs to be accepted that that the "recruit, retain and motivate" principle requires the pay bill to increase in line with private sector earnings, not merely to match inflation.  There is a balance to be achieved through which the highest performers can be rewarded to a meaningful level without reducing expectations of average performers to a demotivating extent. On the other hand, advocates of performance pay would argue that promotion of performance through appropriate pay systems would allow smaller numbers of higher quality and higher-performing staff.

Notwithstanding the above issues, there is a general consensus that the development of devolved, performance based pay arrangements has created a fairer way of rewarding people, in that they emphasise merit rather than time served, and because they support a more flexible approach to managing the resource and performance needs of individual Departments and Agencies.

Key trends

· Continuing development of performance pay driven by Government pressure for modernisation of the Civil Service to improve service delivery

· Gradual expansion of performance pay schemes among the disciplined services

· Use of two year rather than annual negotiated agreements

· Higher tops of pay scales, implying the potential for much higher pay for higher grades (funding dependent).

End note:

Background reference sources

i.             The Civil Service in Liberal Democracies: An Introductory Survey”; OECD country profile; UK Adviser

ii.           Economic Trends’, Annual Supplement 2001: The Stationery Office; Civil Service Statistics,    www.civi-service.gov.uk/statistics/documents/pdf/css00.pdf

iii.          “Strategic Review and Reform – the UK Perspective”, OECD; “The Civil Service in Liberal Democracies: An Introductory Survey” Kingdom, J E, Routledge, 1990; “The State of the Higher Civil Service After Reform: Britain, Canada, and the United States”, OECD, February 1999; OECD country profile; UK Adviser)