bonusPublic servants could be given bonuses instead of automatic pay rises, the government has announced.

The Treasury is said to be looking to phase out automatic pay progression in the public sector, which sees many workers get increases as long as they meet minimum performance standards. In many cases, this has led to their pay increasing above the 1 per cent limit set by the government.

For civil servants in particular, the Treasury has announced its intention to compensate staff who accept that they will no longer get an automatic annual pay rise. The compensation could take the form of bonuses or bigger salary increases.

The Public and Commercial Services (PCS) union – which is holding a strike on Budget day and planning another on 5 April – has voiced its anger at the idea of ending “a system of civil service pay that goes back decades and is designed to help recruit and retain staff”.

The union said: “In its ‘pay remit’ – which sets the framework for departmental pay, and this year confirms a cap of 1 per cent – the Treasury accepts that such incremental progression payments are a legal entitlement. While confirming that there will be no ‘centrally imposed’ move to local pay in the civil service, the remit also says the pay cap must include both basic pay and progression payments this year, meaning actual pay rises are likely to be substantially lower than 1 per cent.”