Although there are only around 3,600 of them (around 0.8% of the total), a good deal of attention is paid each year to the salaries of the SCS. This is because
- they are very well paid relative to the taxpaying population at large, and yet
- they are very poorly paid relative to their private sector counterparts, even though
- their jobs are these days no more secure than those of those same counterparts.
Let's look at each of these factors in turn.
No member of the SCS is on the bread line. The vast majority earn between £60,000 and £100,000 and Permanent Secretaries (heads of department) earn £140,000 and more.
But equivalent private sector salaries are much higher. Most obviously, more than 2,800 people in the City of London were paid more than £1m in 2009, according to the Financial Services Authority. But the detail is also very telling.
- (Including bonuses, benefits and the value of annual pension benefit accrual) median total remuneration of Pay Band 1 SCS officials was only £94k in 2011, compared with £103k and £142k respectively for their counterparts in the wider public sector and the private sector.
- The equivalent figures for Pay Band 2 were £128/191/290k.
- And the equivalent figures for Pay Band 3 were £167/not known/659k. In other words, Directors General (PB3) earned only 25% of their private sector equivalents.
These comparisons were typically much worse (for the SCS) than they had been four years earlier, which strongly suggest that higher paid private sector employees had managed to insulate themselves from the pressures that caused reductions in the real remuneration of most of their staff as well as the whole of the public sector. The SCS, in contrast, suffered badly from the combined effect of pay freezes, increases in pension contributions, reductions in bonuses etc. The SSRB reported in 2015 that "most of our remit group members have experienced a fall of between a fifth and a quarter in their real terms take-home earnings between 2009-10 and 2014-15". Then, in 2016, the SSRB reported that 'public sector pay, for full-time employees, at the 98th percentile in 2015 was approximately 18% lower than in the private sector, at around £90,000 compared to £110,000'. Further detail is in annual SSRB reports.
A more detailed comparison of civil service and private sector pay is in Hay's 2005 Pay Market Comparability Study which contains the following telling chart. (The bottom two lines are SCS remuneration inc. pension; I&S = industrial & service sector, excluding financial services and main board members; TR = total remuneration.)
Turning to job security, the same Hay report notes that, although SCS staff turnover remained low at around 10%, it was on a rising trend. Also, recent SSRB reports confirm that only 20-30% of SCS leavers do so on retirement. The others resign or come to the end of fixed term contracts or are encouraged to leave with the help of early retirement packages. Just as in the higher levels of the private sector, there is a high attrition rate at age 50 and above. Click here for more detail.
Finally, successive SSRB reports have expressed increasing concern about the dual market in SCS recruitment, as around half of all SCS appointments have in recent years been made from outside the SCS itself, and very often at significantly higher salaries. One SSRB report a few years ago noted that internal recruits to Pay Band 2 were appointed at salaries which averaged £92,000, whilst the equivalent figure for external candidates was £102,500. See the latest SSRB reports for further detail, comment and analysis.
[Follow this link for information about the remuneration of the wider civil service.]