Government pledges to make savings through progression pay reforms

Budget 2013: The government has pledged to make significant savings through reforms to public sector progression pay.

As part of his 2013 Budget speech on 20 March, Chancellor George Osborne said that some public sector employees have continued to receive annual pay increases in excess of 7% due to progression pay arrangements, despite pay constraints

The Chancellor said: “I think they’re difficult to justify when others in the public sector, and millions more in the private sector, have seen pay frozen or even cut. I know that it’s tough, but it is fair, and in difficult times, with the inevitable trade off between paying people more and saving jobs, we should put jobs first.”

Public sector pay rises have been subject to a 1% cap since the Chancellor’s 2011 Autumn Statement. This cap has now been extended by a year to 2015/16.

As part of its pay reforms, the government is inviting civil service departments to propose the removal of automatic time-served progression pay for their employees by 30 August 2013.

Pay increases arising from contractual progression pay increments will continue to be paid where such increments are a legal entitlement. However, departments are being encouraged to include contractual progression increments to which there is a legal entitlement as part of the 1% pay rise cap.