Corporate report

Remuneration Report

Published 9 June 2022

Service contracts

The Constitutional Reform and Governance Act 2010 requires Civil Service appointments to be made on merit on the basis of fair and open competition. The Recruitment Principles published by the Civil Service Commission specify the circumstances when appointments may be made otherwise.

Unless otherwise stated below, the officials covered by this Report hold appointments, which are open-ended. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme.

Further information about the work of the Civil Service Commission can be found at: https://civilservicecommission.independent.gov.uk/

Remuneration policy

The Prime Minister, following independent advice from the Senior Salaries Review Body, sets the remuneration of senior civil servants. The Review Body also advises the Prime Minister, from time to time, on the pay and pensions of Members of Parliament and their allowances; on Peers’ allowances; and on the pay, pensions and allowances of ministers and others whose pay is determined by the Ministerial and Other Salaries Act 1975.

In reaching its recommendations, the Review Body has regard to the following considerations:

• the need to recruit, retain and motivate suitably able and qualified people to exercise their different responsibilities
• regional/local variations in labour markets and their effects on the recruitment and retention of staff
• government policies for improving the public services including the requirement on departments to meet the output targets for the delivery of departmental services
• the funds available to departments as set out in the government’s departmental expenditure limits; and
• the government’s inflation target.

The Review Body takes account of the evidence it receives about wider economic considerations and the affordability of its recommendations.

Further information about the work of the Review Body can be found at: https://www.gov.uk/government/organisations/office-of-manpower-economics

Permanent Secretaries are paid within the Permanent Secretaries pay range. The exact position on the pay range is set individually for each Permanent Secretary by the government on the recommendation of the Permanent Secretaries Remuneration Committee (which the government normally expects to accept). The Committee comprises members of the Senior Salaries Review Body (SSRB), the Head of the Home Civil Service and the Permanent Secretary of HMT.

Senior Civil Service (SCS) Pay Committee

The function of the SCS Pay Committee is to determine the department’s SCS pay strategy and after performance appraisals have been completed, to assess the relative contribution of the department’s SCS members in achieving the department’s strategic outcomes and key priorities, before determining non-consolidated performance related pay awards, and to make final pay decisions.

The SCS Pay Committee at the relevant time (September 2021) comprised: Catherine Berney – Non-Executive Director and Chair, Susanna McGibbon, Stephen Braviner Roman, Wendy Hardaker, Elizabeth Hambley and Shehzad Charania, AGO Director General, with Frances Mills, HR Director.

Consolidated awards (salary increase)

Due to the Public Sector pay pause there were no consolidated pay awards or changes to pay ranges for the SCS in 2021-22.

Non-consolidated performance related pay awards

An end of year non-consolidated amount was available for jobholders who were assessed as top performers in the 2020-21 performance year.

In-year non-consolidated awards for performance during 2021-22 were made for a maximum of 40% of the SCS cadre, using the overall budget for non-consolidated SCS payments. The criteria used to award these were:

• Exceptional demonstration of departmental values and collaborative approaches taken to contribute to ‘One organisation’
• Outstanding contribution to the delivery of a key priority objective
• Outstanding demonstration of a high quality service to clients
• Achieving significant cost-effectiveness improvements in specific areas, for example, in terms of advisory or digital delivery
• Showing innovation in the way work is delivered or suggesting new ways of working to add value, reduce cost and improve/maintain quality

Note: SCS jobholders who were awarded both an in-year payment and end of year payment had their total non-consolidated payments for the year capped at the amount for the annual performance award.

Remuneration (including salary) and pension entitlements

This information has been subject to audit. The following sections provide details of the remuneration and pension interests of the senior management (i.e. Board Members) of the department.

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Officials	Salary £000	Salary £000	Bonus Payments £000	Bonus Payments £000	Pension Benefits to nearest £1,000*	Pension Benefits to nearest £1,000*	Total £000	Total £000
Year	2021-22	2020-21	2021-22	2020-21	2021-22	2020-21	2021-22	2020-21
Sir Jonathan Jones KCB QC (Hon) Permanent Secretary until 9 November 2020	-	185-190	-	-	-	44,000	-	230-235
Peter Fish CB Permanent Secretary from 9 November 2020 to 5 March 2021	-	140-145	-	5-10	-	114,000	-	260-265
Susanna McGibbon Permanent Secretary from 8 March 2021	160-165	130-135	5-10	5-10	227,000	86,000	395-400	225-230
Stephen Braviner Roman Legal Director General until 26 January 2022	105-100	125-130	5-10	5-10	22,000	71,000	135-140	210-215
Wendy Hardaker CB Legal Director General from 17 March 2021 to 30 September 2021	60-65	0-5	5-10	-	18,000	2,000	85-90	5-10
Elizabeth Hambley Legal Director General from 7 December 2020	120-125	35-40	-	5-10	119,000	60,000	235-240	105-110
Mel Nebhrajani CB Legal Director General from 1 October 2021	65-70	-	-	-	68,000	-	135-140	-
Jessica de Mounteney Legal Director General from 7 February 2022	25-30	-	-	-	-	-	25-30	-
Anna Sanders Director of Strategy, People and Culture to 30 June 2021	20-25	100-105	5-10	5-10	7,000	43,000	40-45	150-155
Damian Paterson Director of Strategy, People and Culture from 26 July 2021	60-65	-	-	-	64,000	-	125-130	-
Nick Payne Finance, Operations and Digital Director to 11 February 2022	115-120	125-130	-	-	19,000	62,000	135-140	180-185
Lee John-Charles CBE Co-opted Board Member from July 2020	100-105	70-75	0-5	-	19,000	43,000	120-125	110-115
Shehzad Charania MBE Ex-Officio Board Member until 31 March 2021	-	60-65	-	-	-	61,000	-	120-125
Douglas Wilson OBE Ex-Officio Board Member from 12 July 2021	100-105	-	-	-	41,000	-	140-145	-

*The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to transfer of pension rights. Where prior year pension figures have changed this is due to updated information.

2021-22 notes:

• Stephen Braviner Roman - full year equivalent salary was £130k-£135k
• Wendy Hardaker - full year equivalent salary was £120k-£125k
• Mel Nebhrajani - full year equivalent salary was £120k-£125k
• Jessica de Mounteney - full year equivalent salary was £175k-£180k
• Anna Sanders - full year equivalent salary was £95k-£100k
• Damian Paterson - full year equivalent salary was £90k-£95k
• Nick Payne - full year equivalent salary was £125k-£130k
• Douglas Wilson - full year equivalent salary was £140k-£145k

2020-21 notes:

• Jonathan Jones - £185-190k for payments made up to his leaving date of 7 December 2020 and includes an annual leave adjustment of £23k and compensation of £44k (3 month’s salary). The full year equivalent salary was £170k-175k.
• Peter Fish - full year equivalent salary as Treasury Solicitor was £160k-165k, full year equivalent salary as Director General was £125k-£130k, payments made up to leaving date of 30 April 2021.
• Susanna McGibbon - full year equivalent salary as Treasury Solicitor was £160k-£165k, full year salary as Director General £130k-£135k
• Wendy Hardaker - full year equivalent salary was £120k-£125k (same for 2021-22)
• Elizabeth Hambley - full year equivalent salary was £120k-£125k
• Lee John-Charles - full year equivalent salary was £95k-£100k
• Shehzad Charania - full year equivalent salary was £120k-£125k (same for 2021-22) for the period as Director General at the AGO

The Non-Executive Directors were paid salaries in the following bands

	Contract end	Salary £000	Salary £000	Benefits-in-kind to nearest £100	Benefits-in-kind to nearest £100	Total £000	Total £000
Year		2021-22	2020-21	2021-22	2020-21	2021-22	2020-21
Catherine Berney	October 2023	15-20	15-20	-	-	15-20	15-20
Erica Handling	October 2023	15-20	15-20	-	-	15-20	15-20
Mike Green	January 2025	0-5	-	-	-	0-5	-
Thomas Taylor	September 2021	5-10	15-20	-	-	5-10	15-20

The department’s Non-Executive Directors necessarily incur travelling and other expenses to attend departmental meetings. The tax liability arising on their reimbursement by GLD is met by GLD and is shown in the table above as a benefit in kind. Full year equivalents for Thomas Taylor and Mike Green are £15k-£20k for 2021-22 salary.

Salary

‘Salary’ includes gross salary; overtime; reserved rights to London weighting or London allowances; recruitment and retention allowances; private office allowances and any other allowance to the extent that it is subject to UK taxation. This report is based on payments made by the department and thus recorded in these Accounts.

Benefits in kind

The monetary value of benefits in kind covers any benefits provided by the department and treated by HM Revenue and Customs as a taxable emolument. The estimated monetary value of benefits in kind which relate solely to the provision of interest free loans for the purchase of season tickets for home to office travel is not included. The amounts involved are disclosed in the salary, allowances and taxable benefit table.

Bonus Payments

Performance related pay awards (non-consolidated) are based on an individual’s performance and are moderated as part of the SCS appraisal process. Bonuses disclosed may relate to performance in the previous financial year.

Pay multiples

Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the median remuneration of the organisation’s workforce.

The banded remuneration of the highest-paid director in the department in the financial year 2021-22 was £175k-£180k (2020-21: £170-175k). This was:

• 3.4 times (2020-21: 3.3 times) the median remuneration of the workforce, which was £52,042 (2020-21: £52,102).
• 4.0 times (2020-21: 4.0 times) the 25th percentile of pay and benefits which was £43,916 (2020-21: £43,916).
• 2.7 times (2020-21: 2.6 times) the 75th percentile of pay and benefits which was £66,294 (2020-21: £66,289). The median, 25th and 75th percentiles were salary only, there were no bonuses or benefits.

Due to a pay freeze in place for civil servants on average there was no increase in median employee pay for 2021-22 (a 0.1% decrease). The 2% increase in the pay of the highest-paid director reflects the appointment of a new Director General to the Board, where salary is higher than the highest paid director in 2020-21 (there were no bonuses or benefits for the highest paid director in either year). The median pay ratio is consistent with the pay, reward and progression policies for the department. The average percentage change from the previous financial year in respect of the employees of the entity taken as a whole was a 0.2% decrease.

In 2021-22 no (2020-21: 0) employees received remuneration in excess of the highest-paid director. Remuneration ranged from £22k-£177k (2020-21: £19k-£174k). Total remuneration includes salary, non-consolidated performance-related pay and benefits in kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value (CETV) of pensions.

Pension benefits

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Officials	Accrued pension at pension age at 31/03/22 and related lump sum £000	Real increase in pension and related lump sum at pension age £000	CETV at 31/03/22 £000	CETV at 31/03/21 £000	Real increase in CETV £000	Employer contribution to partnership pension accounts Nearest £100
Sir Jonathan Jones KCB QC (Hon) Permanent Secretary until 9 November 2020	-	-	-	1,552	-	-
Peter Fish CB Permanent Secretary from 9 November 2020 until 5 March 2021	-	-	-	1,145	-	-
Susanna McGibbon Permanent Secretary from 8 March 2021	65-70 plus lump sum of 130-135	10-12.5 plus lump sum of 20-22.5	1,214	966	189	-
Stephen Braviner Roman Legal Director General until 26 January 2022	50-55 plus lump sum of 100-105	0-2.5 plus lump sum of 0	970	917	6	-
Wendy Hardaker CB Legal Director General from 17 March 2021 until 30 September 2021	35-40 plus lump sum of 70-75	0-2.5 plus lump sum of 0	619	586	6	-
Elizabeth Hambley Legal Director General from 7 December 2020	45-50 plus lump sum of 90-95	5-7.5 plus lump sum of 7.5-10	877	742	90	-
Mel Nebhrajani CB Legal Director General from 1 October 2021	40-45	2.5-5	727	644	53	-
Jessica de Mounteney Legal Director General from 7 February 2022	50-55 plus lump sum of 90-95	0-2.5 plus lump sum of 0	873	872	-3	-
Anna Sanders Director of Strategy, People and Culture to 30 June 2021	25-30	0-2.5	355	351	2	-
Damian Paterson Director of Strategy, People and Culture from 26 July 2021	20-25	2.5-5	298	253	36	-
Nick Payne Finance, Operations and Digital Director to 11 February 2022	70-75	0-2.5	1,324	1,256	4	-
Lee John-Charles Co-opted Board Member from July 2020	35-40 plus lump sum of 105-110	0-2.5 plus a lump sum of 0	908	848	6	-
Shehzad Charania MBE Ex-Officio Board Member to 31 March 2021	-	-	-	366	-	-
Douglas Wilson OBE Ex-Officio Board Member from 12 July 2021	40-45	0-2.5	551	504	17	-

Civil Service pensions

Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s State Pension Age (or 65 if higher). From that date, all newly appointed civil servants and the majority of those already in service joined alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has 4 sections: 3 providing benefits on a final salary basis (classic, premium or classic plus) with a normal pension age of 60; and one providing benefits on a whole career basis (nuvos) with a normal pension age of 65.

These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with Pensions Increase legislation. Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and 5 months from their normal pension age on 1 April 2012 will switch into alpha sometime between 1 June 2015 and 1 February 2022.

Because the government plans to remove discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members, it is expected that, in due course, eligible members with relevant service between 1 April 2015 and 31 March 2022 may be entitled to different pension benefits in relation to that period (and this may affect the Cash Equivalent Transfer Values shown in this report – see below).

All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a ‘money purchase’ stakeholder pension with an employer contribution (partnership pension account).

Employee contributions are salary-related and range between 4.6% and 8.05% of pensionable earnings for members of classic, premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to 3 years’ initial pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. Classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos a member builds up a pension based on their pensionable earnings during their period of scheme membership.

At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation. Benefits in alpha build up in a similar way to nuvos, except that the accrual rate is 2.32%. In all cases, members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is an occupational defined contribution pension arrangement which is part of the Legal & General Mastertrust. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member). The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension Age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes, but note that part of that pension may be payable from different ages.)

Further details about the Civil Service pension arrangements can be found at the website: www.civilservicepensionscheme.org.uk

Cash Equivalent Transfer Values

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost. CETVs are worked out in accordance with the Occupational Pensions Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

Real increase in CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.