HMT Pay Remit 2007/8 – New requirements bring new challenges for Civil Service pay practitioners

In a snapshot, this year's pay remit guidance issued by HM Treasury has the following key features:

• Specific inclusion of the Civil Service Reward Principles;
• The introduction of a ‘basic award' limit – an additional control to ensure that pay reference points do not increase by more than 2% in line with the chancellor's CPI guideline;
• An adjustment to the affordability range, measured by the ISP and seeking a Civil Service wide average of below 3.5%;
• An increased focus on workforce groups, encouraging clearer internal ‘segmentation' alongside truer reflection of external markets;
• Following from this an increased emphasis on local pay;
• Changes in the treatment of recyclables – with encouragement to use efficiency or other savings to fund variable pay.

The introduction of the basic award as a new control element and the requirement to address the tricky issue of local pay will be particularly challenging features for the coming year. There are, however, other features which allow a little more flexibility in putting together bespoke arrangements that meet an individual department, agency or NDPB's business needs.

The issues covered by the new remit guidance have been at the heart of our client work over the last year or so. We have always focused on bespoke solutions to meet our clients' specific needs and in particular have been working on driving greater focus in the use of pay costs to improve performance using novel solutions . For example, we have been working over the last year on the design and implementation of pay solutions that reflect more accurately the pressures of the market, including both local pay and pay premia for specialists and professionals – and modelling and brokering the proposals to ensure a successful remit outcome!

If you thought it would be helpful to have a discussion with any one of our team members about how you might respond to this year's guidance, please do not hesitate to give us a call.