Civil staff pay and grading

Report: 12
Date: 19 April 2001
By: Commissioner

Summary

This paper provides a summary of developments in respect of civil staff pay and grading following the approval of an additional £22 million in the MPS's budget for civil staff pay purposes. A more comprehensive paper has been prepared for the MPA Human Resources Committee meeting on the afternoon of 19 April 2001.

A. Recommendations

1. Members note the report.
2. Agree to remit the detailed consideration of this matter to the HR Committee.

B. Supporting information

Background

1. At its meeting on 16 November 2000, the Human Resources Committee (HR) considered a paper from the Commissioner outlining the matters in relation to civil staff pay and making recommendations to improve the position. The Committee noted the concerns and proposals and, as a consequence, the MPA voted an additional £22 million for civil staff pay for 2001/02.

2. In the meantime, the MPS had commissioned Hay Management Consultants Ltd to carry out a review of the civil staff pay and grading structure. The Hay consultants reported their emerging findings to MPS Management Board on 28 March 2001.

Hay Management findings and recommendations

Hay's findings are summarised below:

• pay is low. The average maximum salary (including location allowance) is below the market median for all grades except the lowest and smallest rated jobs;
• location allowance rates are substantially below the market rate, particularly in central London and in comparison with local authorities;
• many jobs appear to be undergraded, particularly at higher levels;
• many jobs with perceptibly different Hay evaluations are within the same job grade and are therefore underpaid;
• the grading structure is inflexible.

4. Hay recommended some immediate changes to deal with the findings:

• raise London allowances to around local authority levels and reduce to two zones, coinciding with borough boundaries;
• undertake a thorough job evaluation of a wide range of civil staff posts throughout the MPS; and
• consider some 'on account' payments to staff in jobs that are clearly paid below the market rate or are undergraded.

5. Management Board accepted the short term recommendations relating to location allowances and job evaluation, as below:

• location allowance zones should be reduced to two, to coincide with local authority boundaries;
• the inner zone should comprise the following London boroughs;

Westminster, Lewisham, Kensington and Chelsea Tower Hamlets, Hammersmith and Fulham, Hackney, Wandsworth, Islington, Lambeth, Camden and Southwark

• the rates for the two zones should be £2,556 (inner) and £1,359 (outer) with effect from 1 April 2001. These rates match precisely those of London local authorities; and
• a comprehensive job evaluation of around 250 posts should be carried out in order to establish which posts were highly weighted in their current grade or undergraded. This in turn would enable the development of a more flexible but robust pay and grading structure better able to take account of market fluctuations.

6. Formal authority to make the changes to location zones and rates payable will be sought from the HR Committee on the afternoon of 19 April 2001.

7. The HR Committee will also be invited to endorse the proposal for additional work comprising comprehensive job evaluations. Hay will be supporting the MPS in this work.

8. In respect of the 'on account' payments, a large number of market related allowances have been approved since Hay commenced its work. In addition, Hay's exercise was a desktop evaluation of a limited number (60) of jobs and it would be divisive to apply a pay uplift based on a restricted sample.

Cost

9. The cost of the changes to the location zone boundaries and rates would be £9.7 million (including ERNIC) in a full year.

10. The cost of the additional support work to be provided by Hay will come from the additional £22 million made available. The cost of the outcome of the job evaluation work is not yet known. It depends on the impact that it will have on the new pay and grading structure arising from it. Clearly, there will be a need to ensure that, at the very least, the pay ranges for jobs that are under graded or underpaid will be adjusted so as to ensure that they are paid more appropriately. The additional funds to adjust pay ranges will come from the balance of the £22 million after the £9.7 million for location allowance and fees to Hay have been taken into account.

11. Hay Management Consultants Ltd has made recommendations for improving pay and grading structures for civil staff. These coupled with the additional funds voted for civil staff pay as part of the overall budget for the MPS for 2001/02 are in the process of implementation. An initial step is to alter location zone boundaries and increase location zone rates to match those of local authorities. A medium term step will be the comprehensive job evaluation exercise to be carried out over the next few months, with implementation of the outcome of that exercise planned for A autumn 2001.

C. Financial implications

There are none over and above the additional funds already voted to the MPS civil staff pay budget other than the additional costs arising from the review itself.

D. Background papers

• Report to Human Resources Committee – Civil staff pay and grading (exempt item) – 16 November 2000

E. Contact details

The author of this report is Ian Wardrop, Personnel Department.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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