Civil Service pay – a barrier to improving procurement and commercial performance in the UK government sector?

There is increasing noise, both from respected quarters as well as from those who may have self-interest at heart, suggesting that pay restraints are affecting the performance of the UK Civil Service. The respected Civil Service World publication featured a piece last week titled “Whitehall is Weakening” .  Here is an extract.

Yet this week brings more evidence that pay controls are damaging the very capabilities most demanded by politicians. PASC chair Bernard Jenkin calls for higher pay to “recruit and retain the long-term and committed senior leadership the civil service needs”. Civil service commissioner Sir David Normington argues departments need the “flexibility to pay more to get the best candidates”. In our round table, officials and suppliers alike blame pay caps for stifling recruitment, hastening a skills exodus, and damaging delivery in outsourcing. Even former government procurement chief John Collington murmurs diplomatically that contract management requires an “appropriate level of investment” in staff.

(John Collington 'murmurs diplomatically'?? Seems unlike him!)

Other recent reports from the National Audit Office and others have also identified the need to improve commercial and contract management standards, along with a fear that the civil servants get outgunned regularly by more experienced, better paid opponents on the supply side.

So what can or should be done? For a change, let’s say something positive about the Cabinet Office centralisation initiative. Rightly or wrongly, it seems easier for Francis Maude to get approval for recruiting a large number of relatively highly graded staff (by civil service standards) to work in the Government Procurement Service / Crown Commercial Service (CCS).

Now personally, in an ideal world, I would rather see capability building focused on the major departments,  acknowledging that the smaller departments probably should share a lot of their specialist resource. But at least the desire to build up the strong central CCS team is enabling some recruitment of good people – we hope. MOD also announced a major commercial recruitment drive recently, so there is some hope here too.

However, if we accept that a problem does exist, the scale of it is a problem. Often the issue is reported as relating to senior management – not being able to pay enough to get the “very best” people to do the biggest jobs. In my opinion, that isn’t the real issue.

If you look at the Commercial top team in MOD for instance, then first of all they’re not really too badly paid, particularly if you add in the almost infinite value of a true index linked pension! I think the top 4 commercial staff all appear on the list of civil servants earning over £150K. There are also the other attractions of top public roles (arise, Sir Bill Crothers) and public sector top jobs are also inherently fascinating, in my experience, as well as bringing a true sense of doing something useful for society. Usually, anyway!

And in terms of quality, going back to the MOD senior commercial staff, I would put that collection of people up against the vast majority of private sector firms’ top procurement teams. (Indeed, many of the most senior people in government procurement have worked in the private sector too).

The issue is more difficult at the middle levels, I would argue, where a good public sector category manager for instance, or an experienced contract manager, might earn significantly more, up to double even, in the private sector. And there is less prospect of being rewarded in other ways – even the intrinsic job interest is probably not very different between sectors. So the issue may be more stark at these levels, which of course means that this isn’t just about improving rewards for a handful of people. We are talking about hundreds and hundreds of staff before you would have any significant impact on the overall levels of talent and capability.

That’s what makes this so challenging, and why issues such as the contract management weaknesses have been rumbling on for years. Will things really improve now with the latest reports and efforts? We’ll see, but I’m not holding my breath.

Voices (2)

  1. October:

    In my experience within the public sector it is not an issue of a lack of pay. I have seen contract administrators who are on a low scale successfully run large contracts and I have seen well paid contract managers doing very little. I think it is generally more to do with a lack of investment in dedicated resources. It is not unusual to find a large contract being managed as part of someone’s job. With the main focus of the job role being elsewhere. This is clearly madness however I think we as procurement professionals need to sell the benefits of cost avoidance due to strong contract management to our senior teams. This is not easy as they tend to see any investment as an increase in expenditure.

  2. Dan:

    Its not just pay – look at the hammering that public procurement gets in the media that the private sector simply doesn’t have to put up with. Remember the ‘enemies of enterprise’ furore? In many ways its a thankless role.

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