Public Sector Salaries: Ministers give the go-ahead to pay rises: Senior Officials: Review body recommendations of above-inflation increases allowed if paid for by efficiency

THE CABINET approved above-inflation pay awards for 1.3 million public-sector workers yesterday, with rises of about 3 per cent being seen as the 'going rate'.

The Cabinet accepted all six of the review body reports, except that for the armed forces, which will be implemented in two stages to cut costs. All the recommendations will have to be met from 'efficiency savings', which staff associations warned would lead to cuts in personnel across the public sector.

Top civil servants, judges and officers in the armed forces are to be given a 2.75 per cent pay increase from April, which will be added to an increase of 2.8 per cent due in April from the 1992 pay award.

The report from the senior salaries review body (SSRB) - which replaced the top salaries review body (TSRB) - was accepted in full by the Cabinet. It covers 599 civil servants, 174 senior military officers and 1,398 top judges, who will be given special treatment in future years.

However, the increase of 2.75 per cent in the pay bill for civil servants below the level of permanent secretary will be allocated by merit, as performance-related pay, while permanent secretaries will be paid the full 2.75 per cent without it being linked to their performance. That is a move likely to upset many civil servants, who believe that the top 'mandarins' are successfully resisting the radical changes to the Civil Service.

Thousands of other civil servants not covered by the review body are expected to seek similar increases. William Waldegrave, the Cabinet minister responsible for the Civil Service, will be seeking to reduce sharply the total number of staff as part of the 'efficiency' savings demanded to pay for the increases.

The review body said it was disappointed that its recommendations in 1992 for much bigger rises, ranging from 17 per cent to 24 per cent, were rejected.

The Government accepted that special treatment would be necessary for top judges over the next decade, following a warning by the review body that recruitment was becoming increasingly difficult. By 1999, it will deliver the rises recommended in the 1992 TSRB report, in additional to annual rises for judges.

The SSRB, which is chaired by Sir David Nickson, found that QCs took, on average, a pay cut from pounds 250,000 a year to pounds 90,000 when they became judges. In seeking comparability with the private sector, it found that increases in basic salaries for top executives and directors were from 8 to 10 per cent.

The rises mean that the salaries of the Lord Chief Justice (Lord Taylor of Gosforth), Secretary of the Cabinet (Sir Robin Butler), and the Chiefs of the Defence Staff (Sir Peter Harding, Admiral Sir Bejamin Bathurst, General Sir Peter Inge, and Air Chief Marshal Sir Michael Graydon) rise from pounds 112,083 to pounds 115,165 a year.