asked the Prime Minister what progress has been made with the introduction of performance-related pay in the Civil Service.
The Government are in favour of strengthening the link between pay and performance at all levels in the Civil Service.At the most senior levels a scheme for the introduction of discretionary increments for staff in grades 2 and 3 is being introduced this year in accordance with the recommendations of the Top Salaries Review Body. This scheme will provide additional pay for the best performers in recognition of sustained high performance. The first increments will be in payment with effect from 1 October and will be withdrawable on a mark-time basis where performance falls off over a prolonged period. I am placing details of the scheme in the Library of the House.For staff from grade 3 down to grade 7 a scheme for the annual award of performance bonuses has been in operation on an experimental basis since April 1985. This experiment will end in March 1988, when it will be replaced with a new performance-related scheme for grades 4 to 7 which will take account of experience with the performance bonus experiment. The details of the new scheme will be announced in due course after consultation with staff interests, but as an interim measure we have proposed to the unions concerned that a new performance point should be introduced at grade 5 with effect from 1 September 1987 in respect of people who have been on the maximum of their scale for at least one year. The receipt of this new increment would be linked to performance markings in the annual reports of the individuals concerned.For staff who have not yet reached the normal maximum salaries for these grades we intend to bring forward proposals which will enable them to earn accelerated incremental progression in return for outstanding performance coupled with the with olding of increments in the case of performance which does not fully meet the requirements of the grade.We have also entered into a provisional agreement with the Institution of Professional Civil Servants under which we expect a start to be made in April 1988 on using discretionary range points of pay, again linked to performance markings in annual appraisal reports. This arrangement covers staff in most of the grades for which the IPCS has sole national representation.Taken together these new arrangements mean that from April 1988 over 80,000 civil servants will be in grades covered by performance-related pay. This represents a major step forward in the management of the Civil Service. We hope that it will be possible to bring other staff not covered by these new arrangements within the scope of similar schemes in due course.