Memorandum submitted by the Ministry of
Justice
MINISTRY OF JUSTICE POLICY ON NATIONAL PAY
SCALES AND PERMITTED VARIATIONS ACCORDING TO REGION
BACKGROUND
1. At present staff in the Ministry of Justice
are not on common terms and conditions. Different arrangements
apply for:
— staff formerly employed by the Department
for Constitutional Affairs;
— staff formerly employed by the Home
Office, including those working in the National Offender Management
Service and the Office of Criminal Justice Reform;
— the Prison Service; and
— probation officers employed by Probation
Boards.
2. This paper summarises the approach to
regional pay taken by each constituent part of the Ministry.
3. Work is underway within the Ministry's
Reward Strategy Team to establish the feasibility of introducing
consistent reward structures across the organisation.
STAFF FORMERLY
EMPLOYED BY
THE DEPARTMENT
FOR CONSTITUTIONAL
AFFAIRS (DCA)
4. Staff in the former DCA were employed
on over 50 sets of terms and conditions following the integration
of the former Magistrates' Court Committees into Her Majesty's
Court Service and the creation of the Tribunals Service, along
with other legacy pay arrangements. As a result the organisation
was vulnerable to an equal pay claim. In addition salaries in
some locations were uncompetitive, leaving the organisation at
risk of not being able to recruit staff with the skills required
to deliver a high standard of public service where these skills
were needed.
5. Before the Ministry of Justice was established
on 9 May 2007 work was well underway within the former DCA to
implement a common set of terms and conditions for all staff in
that organisation. The aim was to deliver fair, consistent and
competitive pay and address the significant pay disparities the
organisation had inherited.
6. The four year Deal being implemented
this year is:
— addressing low and unequal pay;
— ensuring we are better able to recruit
and retain staff with the skills we need where we need them;
— offering better rewards for high
performers; and
— improving the overall reward package
for staff eg improved annual leave and child care vouchers.
7. In particular, our approach to regional
pay under the Deal, set out in paragraphs 9-15 below, has been
an integral part of enabling us to deliver these objectives within
departmental spending plans and the remit set by the Treasury.
The remit provides for average annual pay increases of 3.7% over
the four years of the Deal—not to exceed 4% in any one year.
8. All staff within scope have been given
the option to take up the Deal or remain on their existing terms
and conditions. This process is not yet complete, but about 95%
of staff who have made their decision to date have chosen to opt
into the Deal and most are being paid under the new terms and
conditions from this month. This equates to nearly 85% of the
total population of former DCA staff opting in so far.
Approach to regional pay under the Deal
9. Under the Deal, we are implementing a
regional pay system by introducing five regional pay ranges for
the majority of staff:
— National (covering most locations
in the country).
— National Plus (covering locations
with higher local pay. Examples include locations in the West
Midlands and conurbations such as Newcastle).
— Hotspots (covering specific
centres where local pay rates are higher and there are specific
recruitment and retention issues. Examples are locations immediately
beyond Outer London, along with Birmingham, Liverpool, Manchester,
Bristol, Glasgow and Edinburgh).
10. For Bands A and B (the more senior grades)
there are three regional pay ranges (the salary figures are the
same for the Hotspots, National Plus and National pay ranges).
Our research suggests that competition for staff at these grades
is more likely to be based on technical and management skills
rather than geographical location.
11. An illustration of the differences between
the minimum rates in each of the pay ranges in 2007 is given in
the table below.
Band
| National | Hotspots
| Inner London |
| F (lowest band in former DCA part of MoJ) |
£11,726 | £12,382 |
£14,432 |
| E (most populated band with about 40% of staff
| £13,430 | £14,615
| £16,590 |
| A (highest band in the Deal) | £35,295
| £35,295 | £41,250
|
| |
| |
Basis for introduction of regional pay
12. The introduction of regional pay enables us to offer
competitive salaries to attract staff with the skills we need,
where we need them, while making most effective use of our paybill.
As a department we need to be able to compete more effectively
in labour markets where average salaries are higher. Jobs of all
types in the service sector can attract 40% to 50% higher salaries
in Inner London than in less "heated" areas. These differences
are not just between London and the rest of the country but also
between regions and between metropolitan and more rural areas.
13. We have made extensive use of available market information
and local circumstances in developing our proposals. For example
market survey data shows service sector salaries about 10% higher
in Leicestershire and Gloucestershire than in North Yorkshire,
Glamorgan and Shropshire. Areas such as Hertfordshire can be a
further 10% higher.
14. The allocation of courts and offices to a particular
regional pay range has been based on:
— Economic data, including activity rates.
— Information on earnings, including data from ONS
and salary surveys.
— Recruitment and retention figures.
Reviewing regional pay system
15. We have committed to a programme of regular reviews
to ensure that the allocation of locations to pay ranges is up
to date. We have agreed to review the criteria used for making
decisions and to consult the trade unions on the factors taken
into account. In addition, managers can make a business case to
review the allocation of an office to a pay range if recruitment
and retention problems develop.
HER MAJESTY'S
PRISON SERVICE
16. Local Pay Allowance (LPA) is paid in addition to
the national pay rates paid to all Prison Service staff. The Local
Pay scheme in its current format was introduced in 2000 to enable
designated sites to compete better in local labour markets across
a broad range of employee types and replaced the old system of
London Weighting. It provides for a common flat-rate locality
allowance to be paid to all relevant grades at a site in Local
Pay areas.
17. LPA sites are situated in areas with high living
costs and/or low unemployment where higher pay assists in solving
local recruitment and retention difficulties. There are six different
rates across the country ranging from £4,250 per annum in
Central London, £2,600 in the South East and £250 in
Birmingham.
18. The Prison Service is currently considering the implementation
of a new scheme, with greater flexibility to differentiate between
staff groups (LPA is currently paid to all staff members at a
LPA site), and to target paybill resources more effectively on
those areas and/or staff grades facing particular employment market
problems.
FORMER HOME
OFFICE,INCLUDING
THE NATIONAL
OFFENDER MANAGEMENT
SERVICE (NOMS) AND
THE OFFICE
OF CRIMINAL
JUSTICE REFORM
(OCJR)
19. Staff employed with NOMS and OCJR are on the Home
Office pay system that provides a different basic pay arrangement
between London, (covering the area within 18 miles of Charing
Cross), and the rest of England, Wales and Scotland. Staff employed
in the London pay area receive a higher starting pay and a higher
pay range maximum. The weighting differentiates between grades;
for the most junior Administrative Assistant grade it is 6% higher,
for the next grade Administrative Officer it is 7% higher and
for all other grades it is 4% higher.
20. The differential between the London and National
pay areas is subject to regular review based upon the employee
turnover rates and external market pay reviews. In addition, NOMS
and OCJR staff employed within the London pay area receive a London
Location Allowance. This allowance is divided into three zones:
Inner (£3,020), Intermediate (£1,710) and Outer (£1,240).
THE PROBATION
SERVICE
21. The National Probation Service for England &
Wales operates a national pay bargaining structure (National Negotiating
Council—NNC) that applies across 42 separate employers.
This structure is underpinned by a common equality proofed job
evaluation scheme.
22. In April 2006, a system of Geographical Supplements
was introduced whereby it was open to Probation Boards and/or
Trade Unions to apply to the NNC for an area or locality within
an area to be covered by a supplement. The NNC would consider
such submissions against cost of living data for the area, housing
costs, turnover analysis, general recruitment and retention data,
local labour market information and any other relevant information,
including affordability.
23. There are three levels of Geographical Supplement—level
one at £3,600 per annum, level two at £1,800 per annum
and level three at £900 per annum. At present, a Geographical
Supplement is payable in the London Area at £3,600 per annum.
There are no other Geographical Supplements currently being paid
to Probation Service staff.
ISSUES
24. As this paper demonstrates, the constituent parts
of the Ministry currently have a range of approaches to regional
pay. Permissible variations within Civil Service pay structures
are determined by guidance from Cabinet Office and employment
law.
25. Work is already underway within the Ministry of Justice
Reward Strategy Team to establish the feasibility of introducing
consistent reward structures across the Ministry.
November 2007
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