Government Commercial Organisation’s pay and reward plans under fire

Prospect is warning members in the Government Commercial Organisation to seek financial advice before agreeing to transfer to new terms and conditions.

The GCO released proposals to change pay, terms and conditions for senior staff late last year. They aim to tackle the organisation’s inability to compete with the external market for specialist commercial skills.

Based on Prospect’s initial analysis, the union believes the proposals would leave many staff worse off on a “total reward” basis. It is advising members who are thinking about moving to the proposed terms to take independent financial advice – particularly about pension provision.

Although the proposals are focused on Grade 6 and above, Prospect believes they may set a precedent for the wider civil service.

The union is deeply concerned about the proposals for a defined contribution scheme, which it says are extremely poor.

Prospect deputy general secretary Garry Graham said: “Staff should not be required to trade off decent pension provision in return for a decent pay increase.

“We do not believe that the pension proposals conform with government’s broader pension policy of encouraging individuals (and employers) to make adequate provision for old age.

Revised pay ranges for the new commercial function offer access to higher base pay and performance-related pay – with initial pay increases of “up to 20%” for staff who have been successful at the assessment stage.

The sting in the tail is that staff who want to move to the new pay arrangements will have to agree to move onto the proposed GCO terms and conditions.

Under the new arrangements, staff would:

• no longer be eligible to be members of the Civil Service Pension Scheme
• no longer have access to the Civil Service Compensation Scheme
• be entitled to 25 days annual leave
• only have access to a defined contribution pension scheme. The employer would contribute 3%; employees would contribute 5%
• staff made compulsorily redundant would be entitled to three months’ pay and a three-month notice period.

“While we welcome the recognition that pay rates are not competitive with the private sector, GCO has not shared any data with us identifying the comparators and what the comparable rates of pay should be.

“Neither has GCO explained why the proposed package excludes staff from the protections offered by the Civil Service Compensation Scheme,” said Graham.

Although the documentation does say that staff can choose to remain on their current terms and conditions, those who are subsequently promoted may be required to accept the new terms after two years.

Staff who remain on their current terms would receive the general pay award payable by the Cabinet Office in any one year.

Download the full submission here