Civil Service Compensation Scheme/Work of the Cabinet Office - Public Administration Committee Contents

Examination of Witnesses (Question Numbers 20-26)


27 JULY 2010

  Q20  Kevin Brennan: You are still committed to the course of action that the PCS is currently on?

  Mr Lanning: No is the answer to that. The course of action that we have said always has been we want to have negotiations to reach a collective agreement about a new compensation scheme. That is the course that we are on. We have never met somebody who has wanted to join us on that course. Legal action, if it is for the future around the Money Bill, will only be if we fail to reach agreement.

  Q21  Robert Halfon: What effect do you think that the Superannuation Bill will have on deterring high-calibre individuals from entering public service?

  Mr Lanning: There are not going to be that many opportunities to come in. There is not that much recruitment at the moment and I do not think there is going to be a lot for the future. Where it will deter people is in the morale of people who are there about whether they think they are being treated fairly or not in terms of how they have been treated in the run-up to now and also whether it is a fair system going forward.

  Mr Baume: I think there is an issue here but it is not specifically around the compensation scheme, the redundancies. I think the Civil Service and the Government will need to look ahead about how they shape the reward package for people. We do still recruit at senior levels and although there is not a blanket freeze there is a very tight clamp-down, and you will need to do two things: one to retain people who are moving up the organisation—we recruit some very bright and capable graduates—and also some people who may come in from outside, but it will be the package in the round. What are we doing on pay? What are we going to do in terms of future pension provision? That is obviously still a very big issue. There is also the tax regime around pensions. It is the standing and respect of the Civil Service as well which I think ministers have been very proper and very appropriate in terms of the relationship but there is still a lot of media criticism and I think that is often very misplaced. We do need to keep sight of what is the overall reward package. I think the pensions is far more important in this and far more iconic than the redundancy terms. You do need to have the facility to offer people decent packages that will retain them when the economy recovers fully and there are lots of jobs out there. You cannot lose sight of that as a factor around a lot of these decisions about people that will need to be taken over the next five years.

  Mr Noon: My union represents professional grades, engineers and other specialists, some of whom are in quite short supply and some of whom the departments find difficult to recruit or retain, including particularly nuclear specialists. Those people will take their own decisions. They are not people who will be particularly worried about redundancy in this case because they have got very marketable skills. They will look, as Jonathan said, at issues particularly in relation to the pension arrangements and whether they think it is a fair employer to work for. We are concerned that the trend which is there already of people not wanting to come to the Civil Service will continue, and it will make life very difficult for some departments.

  Q22  Robert Halfon: Many of those individuals are prepared to work in the private sector with less generous packages?

  Mr Noon: They are not less generous packages actually for most of my members and that is why areas like the Nuclear Installations Inspectorate have had the devil's own job in recruiting people because they can earn far more in either the civil nuclear industry or in industry more generally. The idea that all terms and conditions are poor in the private sector (we have twice as many members in the private sector as in the Civil Service) is not my experience at all. Many professional specialist grades do far better in the private sector.

  Q23  Chair: Is there enough flexibility? It is a more general question than compensation or redundancy. Is there enough flexibility to address that?

  Mr Noon: On pay it has been an issue and it has been very difficult. I would just use the example of nuclear specialists. Even where what they are paid is charged to the nuclear industry, even then getting the Treasury and Cabinet Office to agree to increases (which are crucial to the civil nuclear new build) it took a tremendous amount of time to do that. More recently there have been some signs of flexibility although quite how the general pay freeze will pan out and whether that will have similar effects is too early to say.

  Q24  Nick de Bois: You are concerned about recruitment and staff morale as you have expressed. Would the Government not then be right to consider the proposed bill as a Money Bill which would speed it up and give employees certainty, because one thing all current and prospective employees would like is clarity and certainty for the future? I suspect you would agree with. Secondly, I also noted, Mr Noon, your comment that you think that the Bill would be "an abuse of House of Commons rules" by using this Money Bill. Is not that at the discretion of the Speaker and not for anyone else to make a judgment on and therefore why would it be an abuse?

  Mr Noon: Obviously it would be a question for the Speaker to decide but I am still entitled to an opinion on behalf of my members about what we see as a parliamentary process. We have not seen a situation where a Money Bill has been used in this way. Previously our understanding of these issues, based on legal advice, is that a Money Bill has been used to protect revenue or to raise tax. In this case it seems to have been used to interfere with the contractual relationship between individual civil servants and their employer. Obviously this is not going to be decided by me, it is going it be decided by the Speaker, but certainly that is our view and that is based on legal advice as well.

  Q25  Nick de Bois: But do you not welcome attempts to get speedy resolution to this? You talked about perhaps not using legal channels and actually going to negotiation, surely that must be a key priority for you so you get clarity for your employees regardless of grade?

  Mr Noon: We do want to get to a position where the uncertainty is ended but the main priority for most of my members is to get to a fair deal. They recognise there is going to be change. As a union on their behalf we have been prepared to negotiate change and agree to changes and we want to get to that, but it has got to be fair, and the imposition as a background to negotiations of something which is based on one year and 15 months for either compulsory or voluntary terms does not seem to us to be reasonable.

  Mr Lanning: Just on the certainty point, I do not think the 12 and 15-month parameters of the Money Bill will produce the management results that they want in terms of people volunteering to come forward or them being able to cope with the large-scale reductions they want. The best way to do that is through voluntary and natural wastage which we did for 100,000 people over three or four years. There were only 87 people who were made compulsorily redundant in that period. So this focus on the terms is not actually the issue; it is how you manage the process of change, and that is where the focus should be rather than on the redundancy terms.

  Q26  Chair: Gentlemen, thank you very much indeed for a brisk and informative evidence session. We are very grateful to you. We will now put some of the points you have raised with us to the Ministers. Do stay and listen to the evidence.

  Mr Lanning: Thank you very much for the opportunity.

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