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 Reality.
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.


  1. I don't think this is unusual in the public sector. Or in this type of work.

    A lot of the tasks are specialised, and only those who have worked in the area are often eligible to be considered for more senior positions. So there is an inbuilt bias to those that stay and do their time and eventually get moved this way and that and finally get promoted to their level of incompetence.

    Since the job is so specialised and requires specialised experience then such roles often self-select the least imaginative, the most institutionalised and the most set in their ways because the cut and thrusters and real leaders often jump a sinking ship or get forced out by treading on the toes of those that are in senior positions by virtue of working in the field for 20 years and are as described above.

    I see it in my organisation. Managers who are only managers because they have worked in the field for 15 years and so have developed a particular outlook and institutionalism and who are often promoted because nobody outside the field is eligible and because nobody else has gone for the job. Solid workers at their previous level, they get promoted to their level of incompetence and they flounder but still, like panning for gold, sift their way up the ladder by re-organisations and re-structures.

    It's why I have to put up with managers with no qualifications, no idea of leadership, no managerial insight beyond doing the next level down job for 15 years and who are consequently ineffective and unfit for purpose. And what a scandal when someone younger suggests another way of doing something!

    Without fresh blood circulating an organisation just calcifies even as, paradoxically, it constantly re-structures.

  2. Excellent assessment of a problem that has been building for 20 years.

    To place "direct entrants" in context, it should be pointed out that in technical posts they skip the first 5 or 6 grades, and are never required to retrospectively attain the competencies that, for example, engineering apprentices do as they progress through those 6 grades.

    As a result, many MoD "teams" are like the "inverse pyramid" Humphrey mentions. The team leader is actually at the bottom, with no real authority or responsibility, as he simply hasn't been trained or acquired basic competencies. The de facto team leader is often a junior grade, who has worked his way up and served in at least 4 grades more than the team leader. This breeds resentment in the higher grade, and he marks the junior man down in his annual report - exacerbating the feeling of worthlessness. Worse, he takes credit for the junior's achievements and ideas, and gets his own promotion. Many such examples can be seen in the higher reaches of DE&S, MoD's procurement arm.

  3. The way that Civil Servants are often depicted by the media is, frankly, quite appaling. To read some of what is written you'd think that were all overpaid and underworked, which I can assure you is not the case.
    Anyone in the lower grades of the CS is certainly not overpaid!

    Also I do wonder why a Permanent Secretary including a small amount of information on non-work related matters became of such interest to the media.

  4. An honest account of most of what's so wrong with the MoD CS. What troubles me is just how those who must have in the past negotiated these pay arrangements with our employer ever persuaded themselves that they should agree to what has been, in effect, several years of fully-sanctioned shafting of the workforce. What other profession can you think of where bright, dedicated, educated-to-proper-degree-level (you all know what I mean), hugely-experienced people, doing - as you point out - jobs bearing heavy, real and serious responsibilities (and lives, foreign relations and the course of military operations matter somewhat more than Tesco's profit margins in any sane analysis) never, ever get any pay increase that might serve as reward and recognition for the indisputable fact that increasing skill and experience in a specialised job means increasing value to the employer and the organisation, but, instead, have to content themselves with a piffling 2.5% annual increment (which is not, as is the case with our uniformed colleagues, 'revalorised' every year but every five or three years, and not now since, I believe, 2006), which may or may not keep pace with inflation. Coppers don't stay on the same rate of pay for years. Nurses don't. Teachers don't. The Forces don't. So why in the name of simple fairness do the MoD CS have to put up with this mean treatment? It's crazy. So yes, the bonus matters a hell of a lot to people whose pay never increases in real terms. And let's think about the sacred cow of military pay while we're at it. Our uniformed colleagues deserve their good pay, pensions and allowances. It is NOT the case, however, that those who are mendaciously referred to as their CS 'rank-equivalents' deserve to be offered a basic salary of less than half the military equivalent. I'm the CS 'equivalent' (I only wish I'd been given the chance to do their mananagment and leadership training) of a Liuetenant Colonel. My salary, for sitting opposite the latter in Whitehall and doing a very bloody similar job for three years, is £37k plus £3k London Allowance. I might get, after tax, a non-pensionable bonus of c £400. His basic pay is over £90k, plus an agreeable apartment in Westminster, plus much else we need not trouble ourselves with here. In his next posting he may well have to put himself in harm's way in Helmand. But he is manifestly not worth so enormously much more than me while we're doing the same damm job back in Blighty.
    The specialised managerial grades of the MoD CS - not the well-rewarded 'mandarin' grades, and not the administrative grades - are grossly underpaid, and have been for many years. We've put up with this collective shafting, in myexperience, because the work is unique, absorbing, and of national importance. Now, though, they're taking the piss. I'm a bit on the mature side so finding a job outside the public service is going to be a struggle, but rather that than stay in the MoD CS and be systematically, knowingly and deliberately impoverished over the course of several years to come, just because the tap that pays my already mean salary is conveniently close to the manicured hand of George Osborne.

  5. Part Two.

    And as for the first comment on this piece: you might have some personal experience of CS being promoted to levels where they struggle. Ever thought beyond your simplistic analysis of why that might be? Ever wondered why there exists no CS equivalent of military staff college training? Thought not. Train people properly (this doesn't mean one or two days with 'Dblearning' and a flipchart in a Best Western on the outskirts of Swindon, not that we're allowed such extravagance these days), with academic rigour and intellectual challenge, pay them properly and decently, and make them feel that the organisation does and will appreciate their effort, and you'll get a fully-engaged, fully-performing managerial grade. Pay him/her peanuts, deny proper training, deny pay progression, and you tend to get - suprise! - minimal performance. We're not all thick and over-promoted, chum.

    Rant nearly over. But how about this: how about hiving off some of the very specialised and rather damm important parts of the MoD CS (such as Defence Intelligence, to name but one, where you need a good degree, well-honed specific skills and to endure regular intrusive vetting just to get in) and paying these valuable specialists something rather close to what they're really worth, and that might persuade them to stay?

  6. Anonymous - what superb comments, and I utterly support what you said. I wonder if our paths may have crossed as I suspect our backgrounds are remarkably similar...