Staff at the Financial Conduct Authority are set to see their base pay increase by more than 12% on average over the next two years, but a union has described the offer as a ‘grave error’.
The new offer, announced earlier this week, came after FCA was threatened with strike action by members of the Unite union, which earlier this year claimed that discretionary bonuses – which are being removed – were universally accepted as part of base pay.
Following a consultation with staff, the FCA adjusted its offer to “improve fairness”, but it admitted that has resulted in some complexity. It has also led to the creation of new London and regional pay ranges.
It said it felt the discretionary bonus did not support its long-term performance aspirations, and the last bonuses will be paid in April 2022.
Nikhil Rathi, chief executive of the FCA, said: “I’m hugely grateful for the time colleagues have spent contributing to the consultation and I understand the strength of feeling about some of the changes we are making. We have welcomed the open debate and discussion and, with the Board, considered all the feedback we have received.
“We believe we have developed a fair, competitive, and sustainable offer that will help us achieve our regulatory objectives, as well as diversity goals, that supports the lowest paid and the strongest performers, with most colleagues receiving a minimum salary increase of over 9% over the next two years and an average of over 12% over that period.”
The vast majority who meet core performance thresholds – around 85% of staff – will receive a guaranteed minimum base pay increase this year of at least 5% this year and 4% next year, but many of the lowest paid and strong performers will see a larger salary rise.
The average base pay rise will be around 7% in 2022 and almost 13% over the next two years, the FCA said.
It will also make a back-dated cash payment in April to help staff who exceed performance objectives cope with the rising cost of living. These payments will amount to 4% of their salary.
We believe we have developed a fair, competitive, and sustainable offer that will help us achieve our regulatory objectives, as well as diversity goals, that supports the lowest paid and the strongest performers.” – Nikhil Rathi, FCA chief executive
By 2024 the FCA said its total pay and reward bill per colleague will be “higher than for any of the past three years”.
Dominic Hook, Unite national officer, urged the FCA to “get to the negotiating table”.
“The pay proposals today by the FCA are a grave error and will be significantly harmful for a large number of loyal, experienced and long serving staff,” he said.
“Unite is urging the CEO Nikhil Rathi to not let his ego get in the way of doing the right thing. This is not the time to continue on the path for the sake of his reputation. Instead the FCA should get to the negotiating table with Unite and hear from the Unite workplace representatives in order to ensure they do not do irreparable damage to this regulator.”
The pay offer also includes:
- Salary increases of £4,310 on average for the lowest-paid staff
- A commitment that the differential between national and London pay ranges will be no more than 10%
- A minimum uplift of 2% to all pay ranges from April 2023
- Awarding those who fall in the second performance category with a 1.5% salary increase, with the opportunity for further salary increases from the mid-year point based on performance up to their interim review
- Tripling the funding for its “At our Best” reward scheme to £1m, with the maximum individual award increasing to £1,000 and colleagues becoming eligible for a maximum of £2,000 in rewards in a single year.
Its employment offer document states that the FCA wanted to provide fair, competitive pay at all levels; reward strong, consistent performance; simplify its “overly complex” structure of pay and job roles; aid transparency and career development; and support its aim of closing its ethnicity and gender pay gaps.
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The FCA’s staff consultation ran from September to December 2021 and received 4,500 responses through the feedback tool, 2,200 emails to the team, 700 comments raised in meetings and over 580 questions answered on its intranet site. Its executive committee also held 77 sessions virtually and in person.
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