Working to make government more effective
Working to make government more effective
Pay review bodies are independent panels that gather evidence and then provide government with advice each year on pay for many public sector workers.
Pay Review Bodies are independent panels – technically, non-departmental public bodies – that gather evidence and then provide the government (either in Westminster or, in the case of public services such as the NHS which are devolved, the devolved governments) with advice each year on pay for many public sector workers. The government ultimately decides the level of public sector pay. But for around half of the public sector workforce these decisions are informed by the independent pay review bodies.
The pay review bodies provide advice on the remuneration of specific groups of public sector workers. This often focuses on ordinary pay, but they can and do also consider other forms of remuneration – such as pensions and overtime arrangements – and working hours, annual leave and other conditions. For example, the School Teachers’ Review Body advises on the professional duties and working hours of school teachers.
There are eight pay review bodies. They are:
Together, these pay review bodies cover around 45% of public sector staff. 1 Office of Manpower Economics, GOV.UK, www.gov.uk/government/organisations/office-of-manpower-economics The main groups not covered by a pay review body are civil servants (apart from the most senior ones) and local government employees.
Each pay review body is usually made up of between six and eight members. The chair of each committee is appointed by the prime minister, while the other members are appointed by the prime minister or the relevant secretary of state, based on merit and following an open process. Vacancies are advertised publicly.
Members are appointed for a three-year term, which can be renewed once.
Review body members come from a range of backgrounds and bring a variety of expertise. Each review body typically has members who provide the following range of perspectives: sector experts, human resources and remuneration experts, professional economists from academia or elsewhere, and former trade unionists.
Each pay review body has a terms of reference, which sets out its overarching objectives. Each year, the relevant secretary of state then supplements this with a remit letter, emphasising which factors the body should focus on that year and any specific constraints on the issues that the review body is asked to consider.
Generally, there is a lot of overlap in the eight Pay Review Bodies’ remits, although most have terms specific to them. For example, the PRRB takes into consideration “the particular frontline role and nature of the office of constable in British policing”. 2 Police Remuneration Review Body, Terms of reference, www.gov.uk/government/organisations/police-remuneration-review-body/about/terms-of-reference
Terms of reference for the pay review bodies (list of constrains and considerations impacting pay review body recommendations)
In the latest remit letters, issued for 2023/24, all secretaries of state have highlighted the current economic context with the request to consider how pay recommendations will impact the government’s inflation target; the only exception is the NCARRB, which has not been given a remit letter yet.
In some years, pay review bodies have been constrained to make recommendations that are consistent with a particular cap on overall pay growth. For example, in 2011 and 2012, the government imposed a pay freeze for workers earning over £21,000 a year and so pay review bodies made no recommendations on pay for staff on higher salaries. 3 See, for example, Review Body on Senior Salaries, 34th Report on Senior Salaries, 12 August 2013, retrieved 15 December 2022, www.gov.uk/government/publications/ssrb-report-number-79-2012 Public sector pay growth was then limited to an average of 1% between 2013 and 2017. Public sector wages were also frozen during the 2021/22 pay round due to the coronavirus pandemic, meaning public sector workers received the same pay in 2021/22 as in 2020/21. The only exceptions were those earning less than £24,000 a year, who were guaranteed a pay increase of at least £250, and NHS workers. Remit letters sent by secretaries of state to pay review bodies took account of this and asked for advice on how to implement the £250 rise for lower paid workers.
Each review body usually has some freedom in how it interprets its terms of reference and remit. For example, the NHSPRB’s terms of reference state that recommendations should “have regard to…the Government’s inflation target”. However, in 2022, the body essentially concluded that its recommendations were not meaningfully constrained by this, saying: “As earnings growth remains substantially below inflation, we judge that increases in earnings present a much lower risk to increasing the rate of inflation compared to some of the other fundamental drivers.”
Pay review bodies all follow a similar procedure when advising the government on pay. First, the relevant secretary of state issues a remit letter to the pay review body covering sectors overseen by their department (so the home secretary would issue a remit letter for the police and National Crime Agency remuneration review bodies, for example). Normally, secretaries of state will use their remit letter to formally request recommendations on employee pay and ask pay review bodies to consider certain objectives such as affordability, recruitment and retention and the state of the wider labour market. When the government has an overarching public sector pay policy that overrides the pay review bodies process (see above), secretaries of state will ask for the views of the pay review body on how to implement this overarching policy.
Following this, pay review bodies then receive evidence from a range of sources, such as trade unions and employers on issues relating to pay and retention. At this time, the government also submits its formal pay offer. This is a detailed series of proposals on the future level of pay for specific groups of employees. For example, HM Prisons and Probation Service’s submission to the Prison Service Pay Review Body for the 2022/23 pay round contained 12 separate proposals covering all staffing grades, increases in grades, restructuring of pay bands and allowances. The review bodies can also commission their own research via their secretariat team in the Office of Manpower Economics.
In light of this evidence, pay review bodies then make a recommendation to the government on the level of pay. These recommendations often vary across the different categories of employees or levels of pay and seniority covered.
The government is not bound by the review bodies’ recommendations. The prime minister, relevant secretaries of state and ministers in the devolved governments decide how to react to the advice provided.
The government determines when it will respond to and publish the reports of pay review bodies. Secretaries of state usually respond to pay review body recommendations through issuing a written ministerial statement in parliament.
The recommendations of pay review bodies are usually accepted by the government. However, there have been times when the government has over-ridden their recommendations – for example:
Recommendations from all the pay review bodies (except for the National Crime Agency) which will inform pay rises for the 2022/23 financial year were published alongside the government’s response on 19 July 2022. As the pay review bodies have reported after the financial year started (which was at the beginning of April), most pay increases will not be implemented until the autumn but will be backdated to the start of April.
* England and Wales only.
Most pay review bodies have historically started gathering evidence each year in October, producing a final report and recommendations in February. 5 Office of Manpower Economics, An introduction to pay review bodies, 6 August 2013, www.gov.uk/government/publications/pay-review-bodies-and-police-boards-introduction/an-introduction-to-pay-review-bodies-and-police-boards This timing is designed to allow the government to consider the recommendations and announce pay awards before the start of the fiscal year in April.
One exception to this is the school teachers’ review body, whose timetable is calibrated around the school year – with evidence gathered and analysed from October, a report produced in April, and decisions about pay awards made in time for the start of the school year in September. The other exceptions have been the National Crime Agency remuneration review body and the police remuneration review body; these have gathered and analysed evidence from December onwards, producing reports in June.
These timetables have, however, been delayed in recent years. The pay review bodies did not publish their 2022 reports until mid-July. The government has stated that it wants to return to the old timetables as soon as possible.
The review bodies were sent remit letters for 2023 between mid-November and early December 2022 and most have been asked to produce their reports and recommendations in either April or May 2023.
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