Francie Molloy (Sinn Féin)

The Business Committee has allowed up to one hour and 30 minutes for the debate. The proposer of the motion will have10 minutes in which to propose and 10 minutes to make a winding-up speech. All other Members who wish to speak will have five minutes.

Mitchel McLaughlin (Sinn Féin)

I beg to move:

That this Assembly expresses concern at the current arrangements for awarding pay and bonuses to senior civil servants in the NICS, in the context of the Executive’s focus on public-sector performance and efficiency; welcomes the decision by the Minister of Finance and Personnel to commission a local and independent review of the pay arrangements for the senior civil servants in the NICS; and calls on the Minister of Finance and Personnel to ensure that the review is comprehensive, in that it includes the grades at pay band 1 (assistant secretary), pay band 2 (deputy secretary), pay band 3 (permanent secretary) and head of Civil Service, and that it assesses the effectiveness, efficiency and appropriateness of the pay arrangements, having regard to the local economic conditions, and recommends reforms as necessary.

Go raibh maith agat, a LeasCheann Comhairle. The Committee for Finance and Personnel agreed to table this motion for debate on the basis that it will give all Assembly Members an opportunity to inform and influence the forthcoming review of future arrangements for awarding pay and bonuses to senior civil servants in this region. I welcome the Minister’s decision to accept the Committee’s recommendation that there should be a local and independent review of that policy area.

The Committee started its initial investigation after it discovered that the total amount awarded in annual bonuses had more than doubled over the past five years, reaching more than £1·2 million in 2008. Individual bonuses ranging from £5,000 to £10,500 have been awarded to 75% of the senior officials at pay bands 1 and 2. In addition, the Committee found that separate arrangements exist for awarding pay and bonuses to permanent secretaries and the head of the Civil Service. In the case of those higher grades at pay bands 3 and 4, all the post holders received bonuses in 2008 ranging from £5,000 to £18,000.

The unions have commented on the issue and stated that the present pay system for the Senior Civil Service can be divisive, is failing to meet Government objectives and is no longer fit for purpose. Similarly, senior officials from the Department of Finance and Personnel have admitted to the Committee that they consider that bonuses do not motivate people; indeed, those who do not receive bonuses become demotivated.

The Committee has identified a number of concerns that arise from the oral and written evidence from Department of Finance and Personnel (DFP) officials, and those will need to be factored into the forthcoming review. They fall into three broad themes, the first of which is how effective the existing pay arrangements are in driving high performance. I preface my remarks by acknowledging that there are undoubtedly areas in which our Senior Civil Service excels and in which individual performance is exceptional. That said, the Committee has previously raised concerns about the performance of senior officials in certain key areas such as financial management, project management, sick absence management and the achievement of key business targets.

The Committee’s concerns were underscored when it discovered that bonus awards had been made to senior management in business areas and agencies whose failure and underperformance had become all too evident. Only last week the Committee found glaring weaknesses in the standard of performance reporting in DFP on progress against the departmental public service agreements and business plans for 2008-09. Indeed, the Committee agreed to send the report back to be updated and amended. Members have queried whether the approach of distributing sizeable bonuses to approximately 75% of senior staff at pay bands 1 and 2 would, in fact, have the effect of rewarding mediocre and low-end performance. Members noted the weaknesses inherent in the system and the lack of a clear linkage between the achievement of both personal performance targets and business targets, and the award of bonuses. It was also noted that few if any senior public officials are sanctioned for underperformance when it occurs. We believe that that is related to a general shortcoming in managing poor performance at an individual level in the Civil Service.

The second broad theme deals with how the position of our senior civil servants compares with that of their private-sector equivalents and how efficient the current pay arrangements are. The Committee found evidence to indicate that the pay of senior civil servants in this region is over 22% more than that of their private-sector equivalents, whereas in Britain it is 8% below the private-sector level. It has also been noted that those in the lower grades in the Civil Service, whose pay is negotiated locally, are on a par with their private-sector equivalents. The Committee considers that the comparison between private-sector and public-sector pay levels has a particular relevance during the current economic downturn in ensuring that the pay arrangements for senior civil servants are efficient and do not stymie the growth of the private sector here, a point that was specifically made in Sir David Varney’s review of the competitiveness of this region.

Members raised the issue of the apparent lower levels of risk facing senior civil servants here when compared with their private-sector equivalents, including in the area of job security. Discussions also took place on the attractiveness of public-sector pension arrangements as compared with those in the private sector.

The third area deals with the broad question of why we should mirror the Whitehall arrangements. The Committee was unable to find evidence that the Civil Service here is experiencing the same difficulties in recruiting and retaining staff at senior grades that are being faced in Whitehall and elsewhere. Given that fact, and the lower wage demands locally, members questioned the need to have pay scales, including starting salaries, that are on a par with Whitehall.

Members also queried the extent to which senior civil servants in this regional Administration are able to draw on the work of their Whitehall counterparts, and, as such, their posts here require less originality and creativity. The Committee also noted that the principle of parity of pay between here and Whitehall has already been broken at the middle and junior ranks in the Civil Service but that it has been steadfastly maintained for senior civil servants. It was also noted that the Senior Salaries Review Body takes no account of local economic conditions when determining the pay and bonus awards for Whitehall senior civil servants, which are then applied across the various jurisdictions.

The Committee’s investigations raised doubts about the applicability to the Civil Service of the Normington Review recommendations for future Whitehall arrange­ments for pay band 1 and pay band 2. Members also raised concerns at the apparent lack of independence and transparency associated with the pay systems for the higher grades at pay band 3 and pay band 4, which include the posts of permanent secretary and the head of the Civil Service here.

The forthcoming review must take a comprehensive approach to assessing the present system for awarding pay and bonuses to the various grades of the Senior Civil Service. That should not be confined to certain pay bands or to simply finding the mechanism for taking local conditions into account when establishing pay awards. Indeed, the review should involve a root-and-branch appraisal of current arrangements, and it should, among other things, consider grading, performance management and pay structures as well as alternative models for incentivising and rewarding high performance and for sanctioning poor performance. We should aim to ensure that we have effective and efficient pay arrangements for our senior civil servants that are tailored to our local social and economic circumstances.

I will take off my Committee hat and speak briefly on behalf of Sinn Féin, which seeks better accountability and transparency. Sinn Féin is content to reward innovation and strong performance when that occurs, but it wishes to balance that with effective sanctions where underperformance or failure is demonstrated. Sinn Féin believes that the review provides an important opportunity for the Assembly to put down a clear statement of intent for other aspects of Government and Administration here, which includes quangos, arm’s-length bodies — or hands-off bodies, as I call them — agencies, boards, consultants, and so forth.

There is a rich vein of exploration for the Assembly, and we can demonstrate that the Assembly can deliver value for money. I urge a short, sharp review of the senior cohort of the Civil Service here — some 250 personnel — and new standards; renewed and reinvigorated management of the public service; and better and more timely and effective delivery of business and personal performance targets. That is the goal.

David McNarry (UUP)

In considering the motion it should also be said that in no way should either lower-grade civil servants or those wishing to take up a career in the Civil Service be restrained in their ambitions to make progress in climbing onto, or up, the career and promotional ladder. They are not in the dock.

The strange thing is that those facing scrutiny through the motion and the review are not under our charge. They do not work for the Northern Ireland Assembly but for Executive Departments. Non-ministerial MLAs — most of us — have an entirely separate regime of employees administering the Assembly for us. The only structured point of contact between us and the top players in the Civil Service is when we come together in Committees. It is there, when we scrutinise and probe the performance of the Ministers and their team of masterminds, that one can experience how wide the gap can be between the Executive set-up and the inner workings of the Assembly.

In top civil servants, we are talking about a select group of elite untouchables, many of whom in fact earn considerably more than the Ministers they serve. Those top civil servants, in true “Sir Humphrey” fashion, must be super civil servants, who are seldom sacked, demoted, given gardening leave or even heard apologising for a mistake.

People today rightly call for openness and transparency, and they are justified, as the expenses explosion has revealed, in being angry and discontented with Government here and at Westminster. So too should we, if we are doing our jobs professionally, be angry and discontented with Government. Are MLAs at fault for: the departmental negligence in relation to the Northern Ireland Events Company; the ham-fisted manner behind the collapse of Workplace 2010; the disgraceful bills for millions of pounds wasted on unnecessary consultation documents, which have become a virus; the debacle surrounding a national stadium at the Maze that will not be built; or the over-estimating of disposable land at Crossnacreevy, where £160 million suddenly became £6 million? Is it down to us that 6,500 high-salary jobs were predicted but will not materialise, and that no one seems to have a clue where we are with Land and Property Services?

Surely, as the Chairman mentioned, what happened at last week’s meeting of the Finance Committee perfectly illustrates how the frustrations and anger of MLAs can be transmitted. The Committee told top civil servants to take back their report on DFP performance against 2008-09 public service agreement (PSA) and departmental targets and to rewrite it. The amazing thing was that the flaws were not hard to find, yet we were told that the report had been carefully assessed for its accuracy by its presenters.

I have read the case for the defence. It comes from none other than the First Division Association — imagine that. The First Division Association tells us that bonus payments are only made to staff who achieve or exceed their work objectives, and adds that pay for senior civil servants is well below that of employees doing similar work in the private sector, suggesting that the first division staff are paid as little as half of what their comparators in the private sector earn. However, I note that there is no mention of the near certainty of job security, or the sizeable pension benefits for senior civil servants, which many in the private sector believe swing the overall package in favour of, somewhat aptly named, first division players.

I am not critical of the pay that those people receive, nor the pensions or the job security. Those have been set. However, if they are envious of comparatives in the private sector, then the obvious question is; why do they not see how it is out there? Why do they not see how they can hack it in a world where mistakes that prove costly are not rewarded? I cannot find favour with the suggestion that they are not content with their high salaries, job security and handsome pension because there is a culture of expectancy of a bonus payment, irrespective of their performance.

I believe that the public feel that such a culture is beyond the scope of justification. To that end, my party’s view is that bonus payments should be scrapped. Last year, the taxpayer paid a staggering £1·2 million in bonuses across all Departments. Someone must stand up and tell me and the people how and why that was the case.

Declan O'Loan (Social Democratic and Labour Party)

I welcome the motion, and I regret that an SDLP amendment was not accepted for debate. At the Committee for Finance and Personnel, I said that I broadly supported the wording of the motion, but my party colleagues and I sought to amend the motion to make it more explicit in respect of the cessation of bonuses in the Senior Civil Service and to extend the review to the whole of the senior public sector, which is an important point. Although the amendment was not accepted for debate, I shall make points arguing for those measures.

This matter must be resolved in a calm and collected fashion. The discussion must be evidence based, and it must not look anything like a vendetta against senior civil servants. There is a danger that some of the language might stray into that territory.

One of my main criticisms of a bonus system is that, in spirit, it is opposed to a proper public service ethos. We must recognise that, by and large, civil servants approach their jobs in a conscientious manner and act in the public interest. Many of them give unstintingly of their time and efforts.

It has been mentioned that 200 senior civil servants received around £1·1 million in bonuses last year, and that 75% of senior civil servants get bonuses, while 25% do not. The architecture of that system raises many questions. Thirteen permanent secretaries received bonuses totalling £123,000, with one bonus, remarkably, being £18,000. The bonus pot has increased gradually over the years. It is now 8·6% of the total salary bill, and there are plans to increase it to 10%.

We are told that the point of the system is to give significant rewards to the best performers and, hence, to reward continuous improvement. That is, of course, a Thatcherite idea, and dates back to the time when it was regarded that the only way to improve public-sector performance was to make the public sector more like the private sector by paying by results. Everything was made measurable, a system of targets was created, and rewards were made on that basis. That led to a huge rise in the salary levels in the highest levels of the public sector and created a bonus culture. That is fundamentally at variance with a public service ethos.

The Department of Finance and Personnel’s permanent secretary gave important evidence to the Committee on 25 March 2009. His remarkable words were:

“Many of us think that the way in which the present system operates, and has operated, here has had a substantial disincentivising effect on people rather than an incentivising effect. The quotas that are applied, and the way in which they operate, can mean that bonuses do not motivate people.”

One could not argue the point better. That high-level evidence must be taken seriously.

The issues of recruitment and retention are critical. The Committee received clear evidence that there is no problem with retention; very few senior civil servants leave before retirement. The issue of recruitment is more mixed; we received evidence to show that to recruit, it can be necessary to place people on a salary that is higher than the base of a particular salary grade. That is one reason why the matter must be looked at in the round; higher-level salaries in the whole of the public sector will need to be examined, otherwise great damage may be done to recruitment into the Civil Service.

I endorse the points that the Chairperson of the Committee for Finance and Personnel made that public-sector salaries at the highest levels are significantly higher than those in the private sector, and about the astonishment that many of us have about bonuses when it is clear that the people who are receiving them are not delivering. Land and Property Services has been heavily criticised in the Assembly, yet in 2008, seven significant bonuses were awarded, including one of £10,500.

I wish to introduce a note of caution to tie in with my earlier remarks about our comments not appearing to be part of a vendetta. The situation in the Senior Civil Service is nothing like that which exists in, for example, the BBC, where 47 directors earn more than £200,000 a year. We are told that the director general received a package for 2007-08 that is worth £816,000.

The median salaries in the top three grades in the Northern Ireland Civil Service, omitting the head of the Civil Service, are £61,000 at pay band 1, £90,000 at pay band 2, and £101,000 at pay band 3. Although those are high salaries, they do not venture into the area of abuse of public money. Therefore, let the review of the entire public sector proceed. Let the Senior Civil Service know that although it values its work, the Assembly wants to move to a fairer system that properly recognises relativities, abilities and achievements.

Stephen Farry (Alliance)

I, too, support the Committee’s motion. There has been much discussion on the subject. Throughout society, there is great concern. It is important that the Assembly stress that it is interested not in pitchfork populism and in taking cheap shots at individuals but in recognising that there are jobs for which people must be paid competitive and, indeed, high salaries, and that people who are properly qualified and who do important, high-risk jobs must be rewarded appropriately.

Much of the background to the debate is set out in Sir David Varney’s second report, which is titled ‘Review of the Competitiveness of Northern Ireland’. Indeed, he expressed great concern about public-sector salaries here. I believe that the average public-sector salary is 19% above that in the private sector, and for top grades, the figure is 22% higher. We are talking about a major distortion of the local labour market. At lower grades in the Civil Service, pay may be lower than it is for similar private-sector posts. It is important that the Committee send out the message that that is not an issue of concern to it.

At higher grades, however, there is a major pay differential with the private sector, and that in turn creates a potential crowding-out of the market. It is worth pointing out again that pay for lower Civil Service grades is often set locally. However, for higher grades, pay is set at a UK-wide level, which does take into account gross value added (GVA) differentials throughout the United Kingdom. In particular, in London and the south-east of England, private sector pay massively outstrips that of the public sector. There it is right that competitive salaries be paid, in order to attract certain people away from the private sector and into the upper reaches of the Civil Service.

It is important to recognise that people in the private sector run much higher risks in their jobs. In particular, in the context of the economic downturn, a person runs the risk of losing his or her job if a company gets into financial difficulties. By contrast, there tends to be much greater job security in the Civil Service. Indeed, in some cases, there is total job security. Few people lose their jobs through underperformance in the Civil Service as a whole, not least when it comes to management of financial matters. Its employees receive good pensions and, sometimes, gongs at the end of their tenure in recognition of their work on the public’s behalf and of their having forgone the greater financial rewards that exist elsewhere.

In Northern Ireland, the opposite is true. Crowding-out is a danger should the best talent be attracted to the Civil Service, because its pay and conditions are better than those of the private sector. The situation is the wrong way around. In essence, that is the major distortion that exists in Northern Ireland’s labour market: although it is a distinct labour market, Civil Service pay is organised on a UK-wide basis.

Great concern arose about bonuses. I must point out that bonuses are paid out based on the Department’s relative performance internally, as opposed to its absolute, overall performance. To be rather flippant about it, one could make the point that the Civil Service bonus scheme is the only area of Government expenditure in which there is guaranteed not to be any underspend at the end of the year. The money is always paid out regardless and is divvied up among qualifying civil servants according to internal formulas. That process is often clouded in mystery.

In a sense, civil servants can have a good, attractive job in Northern Ireland, and they get well rewarded without having to bear the same risks that apply in the private sector. It is important that the Assembly makes what efforts it can to rebalance and modernise the whole Northern Ireland economy. Addressing public-sector pay has to be a key element of that.

Peter Weir (DUP)

I am pleased to support the motion. This is an issue around which the House can unite. Voices from across the Chamber may take different tones, but they support this motion. The Committee’s view and the review announced by the Minister also face the same direction.

As Declan O’Loan put it, we should approach this matter in a calm and collective manner and put it in a proper context. I wonder whether his references to the expenses of BBC executives will make the highlights programme, ‘Stormont Today’, or will be edited out.

We must look at this matter as dispassionately and as fairly as possible and ensure that, in our remarks and our approach, we do not lapse into populism or indulge in the politics of envy. All 220 senior civil servants earn more than the basic pay of an MLA. It may be that MLAs’ pay is such that some senior civil servants would not get out of bed for it. By the same token, if we were to push for performance-related pay, some unkind souls, with whom I would strongly disagree, might look at some Members of the House and conclude that if they were paid on performance, they would be selling ‘The Big Issue’ by the end of the day.

We have to ensure that this matter is considered in a proper context. We must ensure that pay is fair and equitable. The current system has not been plucked out of the air but has followed the example of Whitehall. Undoubtedly, there will be problems with scrutiny of the system. Various statistics will be used to draw comparisons with wages in the private sector. Some of those comparisons will be fair and some will not.

In any review, it is important that we look at prevailing circumstances in Northern Ireland. If it is argued that our system objectively follows that of Whitehall, it may be countered that the present system is not fully tailored to the needs of Northern Ireland and that the circumstances of our private sector have not been fully taken into account. It is important that we balance appropriate levels of pay and conditions for senior civil servants so that we can still attract the best people into the Civil Service. I listened to what Mr McNarry said about the different areas of government. We must attract the best people into the Civil Service to ensure that mistakes are not made. We must also ensure that proper value for money is obtained. Therefore, there is a balance to be struck.

I agree that there is a culture of expectation at present. A permanent secretary said that in some respects, the current system disincentivises those who produce the best performances. The system rewards 75% of senior civil servants and cannot, therefore, be a proper bonus system. Bonuses may have a role to play, and I do not want to prejudge the outcome of any examination. However, if they are to be paid, it must be on the basis of rewarding added value, over and above that normally expected of a senior civil servant. That is the proper role of any form of bonus.

We must also put that issue into the context of the amount of money involved. The total Senior Civil Service pay bill comes to about £14 million. It was indicated that bonus payments totalled £1·2 million. From the point of view of equity, it is important that we do not raise public expectations that there are millions of pounds to be saved; clearly there are not.

We need something that is fair and transparent and can produce the best within the Civil Service, rather than the expectation that a cheque will arrive at the end of the year. Consequently, I welcome the Minister’s proposals, and I hope to see something that is independently led so that there is a fresh examination of the position.

Francie Molloy (Sinn Féin)

The Member should bring his remarks to a close.

Peter Weir (DUP)

I, therefore, support the motion.

Jennifer McCann (Sinn Féin)

Go raibh maith agat, a LeasCheann Comhairle. I, too, support the motion. As some Members have said, for obvious reasons, there has been a lot of interest recently in how public money is being spent. Many people are facing financial difficulties; it is, therefore, justifiable that the position of people employed in the public sector, in particular, should be scrutinised. The lack of accountability and transparency in the public sector is no longer acceptable.

The pay arrangements for senior civil servants in the North are based on a system that has operated for such staff in Britain since 2002 and includes a mandatory bonus scheme. A recent review of pay arrangements for civil servants in Britain resulted in a number of recommendations, including the proposal of a new pay model.

The Committee for Finance and Personnel recommended that an independent review of the bonuses handed out to civil servants in the North be carried out. The Minister has since proposed such a review. I welcome the fact that the Minister took on board the Committee’s suggestion.

Senior Civil Service pay is performance-based. For the base pay award, members of the Senior Civil Service are assessed on their performance in relation to their peers and, as a result, are typically allocated to one of three pay tranches. In 2008, the increases in base pay that applied to each tranche were 2·75%, 2·5% and 1% respectively. The year 2009 marks the second year of a recommended three-year pay award, which is an indicative 7% growth in the pay bill for 2008-2011. The bonus system recommended by the Senior Civil Service Review Board was set at 8·6% of the pay bill for the 2008 award. The review board also recommended that that should increase to 10% by 2011.

I am conscious of the fact that those are very technical figures. The reason why I have quoted them is that the crux of this system is that senior civil servants are already paid large salaries, and yet they are eligible for added bonuses that are not available to those at lower grades in the Civil Service. I want to quote a few other figures to get the sense of this.

Last year, senior civil servants in the North of Ireland were each paid bonuses worth an average of more than £8,000. That amounts to almost double what was paid five years ago. Almost 75% of 200 senior civil servants received bonuses that amounted to more than £1 million. That figure is not justifiable when it is set against performance in key areas of financial management, in particular Departments’ habitual underspend, the high incidence of sick absence, and the achievement of departmental or public service agreement (PSA) targets, which are issues that we constantly debate in the Chamber and Committees.

In addition, the equal pay dispute, which affects a large number of people, has still not been resolved. People at the lower grades receive nowhere near as much in pay increases as senior civil servants do in bonuses. There is no justification whatsoever for paying those bonuses.

Some groups, in particular women, are under-represented and only reach a certain level in the Civil Service. Women are sometimes prevented from gaining promotion for other reasons, and so do not reach the higher levels of the Civil Service. That is an equality issue.

There must be a local and independent review of the pay arrangements for senior civil servants and an end to the bonus system. I hope that the review is transparent and that it is carried out quickly, because we are accountable to the public. People working in the public sector must also be accountable. I support the motion.

Nigel Dodds (DUP)

I welcome the debate, and I am grateful to the Committee for its examination of pay and rewards for senior civil servants, which is a complex issue. I am glad that the motion welcomes my decision to commission a local and independent review of the pay arrangements for senior civil servants in the Northern Ireland Civil Service. I also welcome the opportunity that the motion has given me to hear at first hand Members’ views on the issue and to provide some of the context of the decision that I made a short time ago to commission the external review.

As Members pointed out, there are approximately 220 senior civil servants working across the 11 Northern Ireland Civil Service Departments and their executive agencies. Twenty-five per cent of those people are professional staff, such as medical doctors, lawyers, engineers and veterinary professionals. All the staff play a vital role in the governance of public services in Northern Ireland.

The current pay system for senior civil servants in the Northern Ireland Civil Service was introduced in 2002 and is a performance-based system. As Members know, individual pay awards are determined each year by an assessment of an official’s performance and contribution relative to their peers. Under the current system, the pay system comprises two core elements: a base pay award; and a non-consolidated, or non-pensionable, bonus payment.

One Member referred to the mystery surrounding the criteria for the application of the bonus. Under the current system, specific criteria are applied to the assessment of individuals to determine the level of base pay award and non-consolidated bonus that they should receive. Those criteria are published each year as part of the annual Senior Civil Service pay strategy, and the process by which decisions on individual awards are made is based on a performance-management system, which is also published. That must be put on the record in answer to the allegation that a shroud of mystery exists.

All that follows the recommendations of the Senior Salaries Review Body (SSRB) and Cabinet Office guidance on Senior Civil Service pay strategies. It should also be noted that the Senior Salaries Review Body has recommended increases in the proportion of the pay bill that should be available for non-consolidated bonuses and reductions over recent years in the level of consolidated base pay award.

As a number of Members said correctly, the essential and important role of senior civil servants in supporting Ministers in policy and delivery is broadly similar across the UK. Consequently, senior civil servants in all parts of the United Kingdom have a common grading structure, a common job-evaluation system, a common learning and development framework, and a broadly equivalent performance-management system. It is for that reason that the Northern Ireland Civil Service, with the agreement of successive Ministers of Finance and Personnel, has followed a policy of generally shadowing the broad framework of pay arrangements for senior civil servants in the Home Civil Service when developing its annual pay strategies.

Those arrangements are based on the recommendations in the annual reports of the SSRB, which operates totally independently from Government and makes recommendations on the remuneration of a range of senior public-sector employees. The Senior Salaries Review Body ensures a strong element of independence, objectivity and expert input to the determination of pay for the areas for which it is responsible, having taken evidence, and so on.

When the SSRB makes its recommendations, the Cabinet Office issues more detailed guidance to Departments on their application. It has been argued that those recommendations do not take into account any Northern Ireland-specific evidence. Officials in my Department have been working with the Office of Manpower Economics to explore the scope for a formalised relationship with the SSRB where Northern Ireland-specific evidence would be sought, and specific recommendations made, in respect of senior civil servants in the Northern Ireland Civil Service.

No pay system is without its strengths and weaknesses, and clearly there are elements of the Senior Civil Service pay system that need to be examined and updated. That is one reason why I commissioned the independent review. In the development of the 2008 pay strategy, a small amount of the available bonus pot was used to make some effort to address one of the identified weaknesses of the system, namely poor pay progression at the lower end of pay band 1, which is the assistant secretary level. That had a small but positive impact on a recognised anomaly in the current pay structure.

In its annual reports, SSRB has highlighted the need to formally review the pay and rewards system to address emerging vulnerabilities. Reference has been made to the January 2009 report by Sir David Normington, the permanent secretary at the Home Office, on the review of the Senior Civil Service workforce and rewards strategy. My officials and I have spent some time analysing that report from a Northern Ireland perspective; that analysis has informed my decision to commission the review of the Senior Civil Service pay and bonus system in the Northern Ireland Civil Service. It is my intention that that should be an independent external review, with the Minister of Finance and Personnel as its main customer.

I am considering the draft terms of reference for that piece of work, which will be potentially complex. It is not possible to examine pay and bonus arrangements in isolation from consideration of roles, grading structure and performance management arrangements. The arrangements should, as the motion proposes, cover all grades in the Senior Civil Service, including that of permanent secretary. I believe that the review should be wide-ranging and should look at comparisons with pay and reward systems for similar jobs in the wider public and private sectors. It should also have regard to the changes to arrangements for Senior Civil Service pay now being considered in the rest of the UK as a consequence of Sir David Normington’s review.

It should be noted that base pay increases in the wider public sector for 2008-09 were much greater than those in the Senior Civil Service. The base pay increase in the Housing Executive for the same period was 3·75% compared to 2·5% in the Senior Civil Service; 5·56% in the education and library boards; and 4·19% in the health and social care sector. It is clear that pay increases are an issue for the wider public sector as well as the Senior Civil Service. It is important that all those issues be examined.

I want the review to proceed as quickly as possible. It is likely to take some months to reach the reporting and subsequent implementation stages and for that reason, I am considering what arrangements should apply to the pay award for the Senior Civil Service that is now due in respect of the reporting period of April 2008 to March 2009. I intend to circulate the terms of reference for the review to ministerial colleagues and to the Committee for Finance and Personnel once I have considered them.

It would be wrong to pre-empt the outcome of the review. However, my expectation is that the decisions taken based on the outcome of the review, which has been widely welcomed, will provide for a Senior Civil Service pay and reward system that will be fair and transparent to the staff involved and to outside commentators. It will serve to address the anomalies that have been identified in the current pay and reward structure, and it will enable the Civil Service to recruit, retain and motivate suitably able and qualified people to exercise its various responsibilities at the most senior level.

Francie Molloy (Sinn Féin)

As Question Time commences at 2.30 pm, I suggest that the House take its ease for a few moments. This debate will resume at 3.30 pm, when the next Member to be called to speak will be Mr Hamilton, who will make the winding-up speech.

The debate stood suspended.

(Mr Speaker in the Chair)