Permanent Secretaries: Pay (Hansard, 9 February 1995)

Viscount Cranborne

The Government announced in Command 2748 presented to Parliament on 26 January that they intended to introduce new arrangements for the pay of Permanent Secretaries from 1 April, and that they would make a further announcement in conjunction with their response to the report of the Senior Salaries Review Body. The Government have now considered the recommendations of the Review Body.

As foreshadowed in the Command Paper, a remuneration committee will be established to advise Ministers on where individual Permanent Secretaries should be placed within the pay range. The full terms of reference are below. The final decisions on the pay of individual Permanent Secretaries will be for the Government, who expect normally to accept the recommendations of the committee.

There will be five members of the committee, three members of the Review Body, the Head of the Civil Service and the Head of the Treasury. The chairman of the Review Body will normally chair the committee. The three external members will, sitting alone, make recommendations to the Government on the salaries of the Heads of the Civil Service, the Treasury and the Diplomatic Service.

Sir Michael Perry, who will succeed Lord Nickson as chairman of the Review Body in April, has agreed to chair the committee. Mr. Gordon Hourston and Ms Yve Newbold, both members of the Review Body, have agreed to serve on it. I am grateful to all of them for undertaking this important and additional task.

The Review Body proposed a pay range of £90,000–£150,000. The Government accepts this recommendation. The salaries of individual posts will be published in £5,000 bands once each year in the following annual report of the Review Body.

Parallel arrangements will be made for the most senior ambassadors.

Terms of Reference of the Remuneration Committee Membership

1. There shall be a committee on the pay of Permanent Secretaries of whom the members will be:

three members of the Senior Salaries Review Body (SSRB);

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the Heads of the Home Civil Service and the Treasury.

2. The Chairman of the committee will be one of the members, normally the Chairman, of the SSRB.

Remit: Permanent Secretaries other than the Heads of the Home Civil Service, the Diplomatic Service and the Treasury.

3. The purpose of the committee is for the three SSRB members to make proposals to Ministers on the pay of individual Permanent Secretaries save in so far as their pay is determined by the terms of an individual appointment.

4. The pay of Permanent Secretaries will be accommodated within the pay range to be determined from time to time by the Government. The committee may not propose other forms of remuneration or benefit than pay falling within this range.

5. In making proposals the committee shall take the following factors into account in relation to individuals:

the relative level of responsibility of the post occupied;

the performance of the department in executing the policy of Ministers and the personal contribution the individual has made in terms of policy advice and efficient management, including where appropriate meeting the measured objectives of the department;

the experience of the individual in the present post or in others occupied at Permanent Secretary/Head of Department Level;

in the case of those newly promoted, the level of pay in their previous post;

any views which the Minister, to whom the Permanent Secretary is principally responsible, may wish to offer to the committee;

the individual's own assessment of his/her achievements and the main requirements of the job.

6. The committee should also take into account these wider factors:

the pay levels of other staff in the Senior Civil Service, and in particular those immediately below Permanent Secretary;

the increases recently given to, or likely to be given, in the period ahead, to civil servants generally, and the pay progression available to them;

the extent of the change for any individual as well as the absolute level of pay, and the presentation of both;

any movement in the pay range as a whole;

the nature and terms of the Civil Service pension scheme;

any statements made by the Government on public sector pay;

the maintenance of the confidence of the individual that recommendations have been properly and fairly determined;

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the need to ensure recommendations are consistent with the Government's equal opportunities policy.

Remit: Pay of Civil Service members of the Remuneration Committee and Head of the Diplomatic Service

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7. The SSRB members of the committee will, sitting alone, make proposals to Ministers on the pay of the Heads of the Home Civil Service, of the Diplomatic Service and of the Treasury. For this purpose they will take account of all the factors noted in paragraphs 4–6 above as relevant to the pay of Permanent Secretaries.