It has been revealed that IT staff moving from private contractor status over to HMRC will be affected by the one per cent pay cap that is in place.

The chief digital officer at HMRC, Mark Dearnley, has announced that the company established to employ the IT contracting staff from the soon-to-be ending Aspire contract will be affected by the public sector pay cap. The ten-year Aspire contract was signed between HMRC and Capgemini, a private supplier, in 2004. At the time, it was common for Government agencies to have contracts like this, but the Cabinet Office has requested that shorter and more targeted contracts be used to open services up to a wider range of suppliers.

In order to achieve this, HMRC has established the Revenue and Customs Digital Technology Service (RCDTS) – owned by the Government – to bring the private contractors who worked for Capgemini into the employ of HMRC. However, the move has been questioned by the Public and Commercial Services Union (PCS), which believes that the new organisation will find it hard to convince these contractors to make the move to HMRC, particularly as they have skills that are very much in demand. A role that has a low pay cap is not going to be the most attractive, and the caps are in place for the next four years.

PCS has given evidence to the parliamentary Public Accounts Committee (PAC), in which they say that RCDTS has control over salaries but is still restricted by Government decisions on pay. The union is concerned that RCDTS will not be able to bridge the gap between the pay that contracting workers could expect elsewhere and the pay that they will get at the new company. There are also concerns for the long-term salary expectations of former contractors, as private sector salaries are on the rise.

Mr Dearnley has informed the PAC that the new company has been established in order to provide better offers of employment than contractors could expect if they were directly employed by HMRC. He has confirmed better starting salaries, but pay rises are still going to be limited.

Questions were asked in regard to whether the new company would be able to keep pace with the private sector in light of the pay rise cap, but Mr Dearnley believes that the salary ranges set have included these considerations. PCS has also claimed that many staff who  had planned to make the move have since chosen not to, and the union is calling upon HMRC to address the issues around pay.

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