Tuesday, 3 January 2012
Civil Service Bankers? The truth about MOD civil service bonuses and pay.
Civil Service Bankers? The truth about MOD civil service bonuses and pay.
Despite the impression given in the wonderful TV show 'Yes Minister', many civil servants (CS), including this author, are huge fans of the Freedom of Information Act. When used properly, it is an excellent means of encouraging people to think about what they are writing, doing or encouraging, and a way to ensure that governmental decisions are held to account. What does frustrate many CS, including this author, is the way that the FOI act has been used to instead become a means of lazy journalism, whereby journalists swamp the MOD with poorly written questions, looking for a vaguely meaningless statistic from which a story can be written ahead of the print deadline.
One such example is the story which appeared in the Daily Mail on 3 Jan (http://www.dailymail.co.uk/news/article-2081495/Ministry-Defence-workers-40m-bonuses-soldiers-getone-cent-rise.html#comments) which purported to show that while our brave boys shivered in dire conditions without any money, body armour or means of defending themselves, those vile CS fatcats sat in plush offices and were awarded a bonus for their efforts in doing nothing.
As a story goes, it meets the classic Daily Mail trick of inducing middle class outrage at something that is just plain wrong in UK society (a title to which the Daily Mail usually ascribes public sector workers, MPs, bankers, foreigners, chavs, benefit scroungers, or anyone born since the end of Empire...). It links the notion that CS will get bonuses (thus making them bankers), but British troops will only get a 1% pay rise, and that this is just wrong. Naturally the Daily Mail message board has been inundated by people who will surely need new keyboards having banged in angry messages about how wrong this must be.
The CS bonus was introduced under new Labour, by the then Chancellor, Gordon Brown MP. The bonus came about as a result of the need to reduce the long term public sector pension bill, which threatened to cause significant future financial issues, while at the same time ensuring that public sector workers did receive some form of payrise (in order to keep the Labour voters among them sweet?).
The result was the introduction of a 'performance bonus', which comprised a non consolidated award of varying amounts. The means of getting one varied, initially one had to be judged among ones peers, and only those truly deserving one got one (the criteria involved demonstable evidence that individuals were working far beyond their job description). Later, this became more farcical, with 50% of staff in any business area getting one (you try working out how of four admin clerks doing identical jobs with no scope for development, two get one and two don't). Eventually the system evolved into its current format, whereby if you are awarded a satisfactory marking on your performance review, you receive a standard bonus payment, while those going far beyond the call of duty get higher awards.
In theory its a good idea - it should encourage people to work harder to get higher payments. In reality, its merely served to demoralise the workforce - particularly junior administration grades who have little scope for development. Its the one thing that almost all CS are united in despising, and something that pretty much everyone would rather see abolished, and replaced with a proper pay award.
The sums involved are very small - you'll see headlines in some papers suggesting figures of up to £6,000 award. In reality, to get this one would have to be at one of the most senior levels of the MOD and receive an enhanced bonus, which would require a very impressive performance indeed. Its doubtful that more than one or two people on the whole MOD received such an award this year.
Most CS will get a taxable payment in the low couple of hundred pounds - this year Humphrey received the net sum of £350, which was very nice, but he'd rather have received the equivalent 1% payrise which is what this sum represents.
While all this is going on, the harsh reality remains that CS pay is in a pretty poor state. The last time the pay scales were revamped was in the mid 2000s, and what now exists is a so called series of 'spine points' which in theory ensure that each year, a CS will (subject to satisfactory performance) move up one point on the scale, gaining a 2.5% payrise.
This is exactly what happens in the Armed Forces, where they receive two payrises per year - an independent review not only puts forward a proposed payrise which is revalorised annually, but also they progress up one point on the internal payscales. Even during the current pay freeze, military personnel continue to progress up the pay scale, ensuring a 1-2% per year pay rise.
The MOD CS have no such luck - not only has the pay scale not been revamped in nearly 10 years, but progression through it has been frozen. Humphrey has been in his current grade for some time, but has yet to move off the bottom of the pay scale, and all indications are that when the pay freeze ends, salary levels will not be reallocated to reflect actual seniority in grade. (Oh how we all laughed when the Chancellor said in 2013 payrises will be limited to 1% as CS have been progressing up internal pay scales during the pay freeze).
Why does this matter?
Its easy to ask why this matters - after all, we're in an economic crisis, and CS have to take the pain along with everyone else. Humphrey agrees - a pay freeze was the right answer in 2010, and its only fair that the CS takes the pain along with everyone else. The issue is not that pay is frozen, but that the pay and benefits package which keep good CS in post is rapidly losing its lustre, and very good CS with irreplaceable knowledge are leaving, without replacement.
The harsh reality of the MOD CS is that its workforce is rapidly aging, with nearly 60% of the MOD workforce being aged over 40. At the same time, there has been a massive reduction in recruitment, and hardly any new blood has been brought in to begin the essential process of replacing people who are leaving. While this is going on, 33,000 MOD CS jobs (out of 86,000) are expected to be lost by 2015, with a target of 53,000 MOD CS by 2020. The MOD is busy creating an inverse pyramid, whereby few new joiners are entering the department, and many older members are leaving, taking their skills and experience with them.
The problem the MOD has is that while much of its work is admin related, and which staff receive a fair wage, in line with industry - usually £15-23,000 for the Admin Grades (or E2 & E1), which is a salary that reflects the menial nature of the work, and the fact that staff can easily be replaced. The real problem lies in the mid management grades, heading up to senior levels, where pay parity with industry no longer exist.
Many good mid range management staff (by this I mean the grades C2, C1, B2,) are paid a relatively low salary for occupying posts which traditionally have a lot of responsibility. Many of these people occupy posts which involve intelligence work, policy analysis, legal matters, procurement or project management and so on. They are required to make decisions which if they get wrong, could easily see major damage to UK military capabilities & diplomatic relations, or could easily get people killed.
By the time staff have reached this point, they should have a reasonable experience of the department, and understand how defence works. More importantly they bring continuity and knowledge to many areas, where fast moving military staff look to them for guidance.
The problem the MOD has though is that these people are leaving - the combination of pay freezes, poor employment conditions, and the general feeling of being utterly undervalued as employees meant that in 2011, nearly 1 in 5 civil servants eligible to do so applied for early redundancy - and that was just in the first tranche of a 3 year programme. When 20% of your workforce is about to walk out the door in the worst economic crisis in recent history, you should realise that you have a problem.
The MOD is now facing a major structural manning crisis - good people are leaving in droves, feeling it better to take their chances outside, where they can get jobs with equal levels of security (the days of a CS job for life are gone forever), on vastly improved wages, and where they feel slightly more valued, or at least have the sense that they have a career structure in place. The author knows of plenty of CS, many of whom were seen as 'rising stars' who have read their star signs, and walked into jobs paying 2-3 times their previous salary, and often offering far more actual responsibility.
In about 10 years time the MOD is going to find itself desperately short of good people - the last 'proper' cold war warriors will be nearing retirement age, and there will be no replacements in the wings. The people who should be entering now on graduate recruitment schemes, or through normal recruitment aren't coming. The much vaunted 'Fast Stream' is generating just 25-30 MOD people per year (if that), and there are nowhere near enough good future leaders being developed. Admin staff can always be regenerated easily enough - its a truism that applies across the world of employment, but good people with deep technical or specialist skills can't be provided at the drop of a hat. They need time to grow, time to develop and understand their department, and time to learn from those who have gone before them. The problem is that by the time this problem is properly realised, those who are retiring will have gone, and the corporate memory will be empty - relying instead of poorly filed electronic documents, and folklore. The UK is on the verge of losing entire branches worth of technical or specialist skills forever, because the replacements are no longer coming through.
So this is why bonuses matter - they matter because they are the thin end of the wedge. Staff are demoralised because their employers want to screw them over rather than pay them a proper salary. Staff are demoralised because they don't see senior figures standing up to defend them when it really matters, and explaining that the average CS has no say in whether they get a bonus or not. Staff are leaving because it really bloody hurts to open the paper every day and see a morally bankrupt, hypocritical journalist who thinks the MOD is something to do with his MOT write a story to make people hate them. This author knows of CS, good honest people, who have been subjected to truly vile personal attacks at dinner parties for being greedy bonus obsessed bastards while our brave boys fight and die in the front line.
The bonus issue matters because its one of the things that is causing people to leave the MOD, and in turn is causing immense damage to this nations security as a result.