A Brief History of the Office of Manpower Economics

Formation

The Secretary of State for Employment, the Rt Hon Robert Carr MP, announced the winding up of the National Board for Prices and Incomes (NBPI), set up by the previous Government, and the creation of The Office of Manpower Economics (OME) in the House of Commons on 2 November 1970.  

He said “In the public sector there is a clear need for co-ordinated machinery for advising Government on the remuneration of certain groups for whom no negotiating machinery is, for one reason or another, appropriate. The government intends to establish at an early date three Review Bodies with a degree of interlocking membership. One will advise on the remuneration of the Boards of the Nationalised Industries, the Judiciary, Senior Civil Servants, Senior Officers of the Armed Forces’ and other such groups as might be appropriately considered with them; another will advise on the pay of the Armed Forces generally; and a third will advise on the remuneration of Doctors’ and Dentists’ in the National Health Service. The Review Bodies will have at their disposal, and working to their directions, a Secretariat provided by the new Office of Manpower Economics.

The Government also intends to use the new Office to service any ad hoc enquiries, which are necessary from time to time to examine in depth particular pay structures and related problems. The Office will also carry out analytical and educational work on more general matters affecting pay and its relation to productivity, either at the request of Ministers or with the approval of Ministers. The Office will not be part of the Government machine and its reports will be independent”.     

No formal Act of Parliament was considered necessary to establish the new organisation. It was set up by the Secretary of State exercising his general powers under the Employment and Training Act.  Though independent, it was decided that it should be funded from the Department of Employment and was to be staffed by Department of Employment civil servants. 

The Chairmen of the Pay Review Bodies would be appointed by the Prime Minister and the Members by either the Prime Minister or the appropriate Secretary of State.

Initially, the OME provided a Secretariat to three pay Review Bodies:

The Senior Salaries Review Body (SSRB) formerly the The Top Salaries Review Body (TSRB) 

The Top Salaries Review Body (TSRB) was appointed by the Prime Minister, Rt Hon Edward Heath, in May 1971 with the following terms of reference: ‘To advise the Prime Minister on the remuneration of the Chairmen and Members of the Boards of the Nationalised Industries; the Higher Judiciary; Senior Civil Servants; Senior Officers in the Armed Forces; and other groups which may be referred to it’. The first Chairman of the Top Salaries Review Body was Rt Hon The Lord Boyle of Handsworth. In 1993 the Top Salaries Review Body was re-named the Senior Salaries Review Body.

The Armed Forces’ Pay Review Body (AFPRB)

The Armed Forces’ Pay Review Body (AFPRB) was also appointed in May 1971. Its terms of reference were: ‘To advise the Prime Minister on the pay and allowances of members of the Naval, Military and Air Forces of the Crown and of any women’s services administered by the Defence Council’. The Review Body was to cover all ranks up to and including Brigadier and the equivalent ranks in the Royal Navy and Royal Air Force. The first Chairman of the Review Body was Sir Harold Atcherley.

The Review Body on Doctors’ and Dentists’ Remuneration (DDRB)

The Review Body on Doctors’ and Dentists’ Renumeration was established on 5 July 1971 and its first report’s recommendations were backdated to 1 April 1971. Its terms of reference were: ‘To advise the Prime Minister on the remuneration of doctors and dentists taking any part in the National Health Service’. The remit did not extend to Northern Ireland. The first Chairman of the Review Body was the Rt Hon The Earl of Halsbury. 

Whilst the OME was made responsible for providing the Secretariat to these three pay Review Bodies, it had also to provide a Secretariat role for any ad hoc enquiries. In its early days it provided the Secretariat to the Burnham Committee Negotiations for School Teachers; the Pelham Committee on lecturers in Teacher Training Colleges; School Teachers in Scotland; two arbitrations on Civil Air Transport and 14 arbitrations for the Post Office.   Additionally it produced reports on the Cunningham Inquiry into the work of the Fire Service (1971) and the Wilberforce Inquiry on Coal Miners’ Pay (1972).

Changing Responsibilities 

In 1973 The Counter Inflation Act established the Pay Board and the Price Commission. The establishment of the Pay Board had implications for OME.  Its role in respect of  the three Pay Review Bodies remained  and, for an interim period, it continued as a secretariat for the Post Office Arbitration Tribunal and other ad hoc arbitrations, as well as courts of inquiry which might  be set up  Other functions were removed and a large number of staff were transferred from OME to the new Pay Board.  

In 1976 the OME’s responsibility for the Post Office Arbitration Tribunal passed to the Advisory and Conciliatory Arbitration Service (ACAS).

1979 saw the establishment of a Standing Commission on Public Service Pay Comparability. The Commission was Chaired by Professor Clegg and the OME agreed to provide a Secretariat role.  Its terms of reference ‘were to examine the terms and conditions of employment of particular groups of workers referred to it by the Government in agreement with the employers and unions concerned, and to report in each case on the possibility of establishing acceptable bases of comparison, including comparisons with terms and conditions for other comparable work and of maintaining appropriate internal relativities’. The deliberations also suggested new future roles for the OME; most notably that OME would provide the Secretariat for any new Review Bodies or similar institutions (including a proposed Pay Research Board) but that its data-producing role should eventually be merged with the Civil Service Pay Research Unit.

The Commission ultimately produced 15 Reports and completed its final Report in March 1981.

The Police Negotiating Board (PNB) 

The Committee of Inquiry on the Police chaired by Lord Edmund Davies was established in 1977 to review the machinery for negotiating matters relating to the pay  and conditions of the UK police service then dealt with by the Police Council. It reported in 1978, recommending new negotiating machinery in the shape of a Police Negotiating Board to replace the Police Council.  The Police Negotiating Board Act 1980 established the new negotiating body, although the PNB first met in August 1979. The OME was chosen as the most appropriate body to provide the Independent Secretariat.

The PNB was to have five standing committees:

a)   For the consideration of matters (other than pensions) affecting ranks above that of Chief Superintendent;

b)   For consideration of matters (other than pensions) affecting the ranks of Chief Superintendent and Superintendent;

c)   For consideration of matters (other than pensions) affecting ranks below Superintendent, including cadets;

d)   Those common to all ranks (London allowances etc); and

e)   Pensions.

Under its constitution, the full PNB was to meet as necessary and at least once a year. The first PNB Chairman was Lord Plowden.

The Megaw Inquiry

1981 saw the OME act as a Secretariat for the Inquiry into Civil Service Pay under the Chairmanship of Sir John Megaw. Its terms of reference were as follows: ‘Having regard to the public interest in the recruitment and maintenance of an efficient and fairly remunerated Civil Service and in the orderly conduct of the business of Government and its services to the public; to the need for the Government to reconcile its responsibilities for the control of public expenditure and its responsibilities as an employer; to the need for good industrial relations in the Civil Service; and to recent experience of operating the existing arrangements for determining the pay of the non-industrial Civil Service; to consider and make recommendations on the principles and the system by which the remuneration of the non-industrial Civil Service should be determined, taking into account other conditions of service and other matters related to pay, including management, structure, recruitment and grading’.  The Inquiry reported in 1982.

The Pharmacists’ Review Panel (PRP)

The Pharmacists' Review Panel was established in 1981 following a recommendation in the Franks report 1979. Its terms of reference are "To advise the Secretary of State on any aspect of gross remuneration of chemist contractors providing services under Part II of the National Health Service Act and to act as a means of resolving disputes, either side to be able to refer a dispute to the Panel". The Panel last met in 1994 and the PRP was abolished on 31 March 2005.

The  Nursing and Other Health Professions Review Body (NOHPRB) formerly The Nurses and Professions Allied to Medicine (PAMs) Review Body (NAPRB)

The Review Body was established following a protracted pay dispute in 1981 - 1982. Its terms of reference were: ‘To advise the Prime Minister on the remuneration, with effect from 1 April 1984, and subsequently of i) nursing staff, midwives and health visitors employed in the NHS; and ii) physiotherapists, radiographers, remedial gymnasts, occupational therapists, orthoptists, chiropodists, dieticians and related grades in the NHS.’ The remit did not extend to Northern Ireland.  The first Chairman of the Review Body was Sir John Hedley Greenborough. In 2003, as part of the changes brought about by Agenda for Change, the new NHS pay system, the NAPRB's was extended to cover all Allied Health Professions, healthcare scientists and other professional staff groups. To recognise this broader staff remit, the NAPRB became the Review Body for Nursing and Other Health Professions (NOHPRB). The remit of the Review Body was also amended so that it should also have regard to local labour market issues, and equal value considerations, in making future recommendations.  With some variation across individual remits, those of the other Review Bodies were similarly changed.

The School Teachers’ Review Body (STRB)

The School Teachers’ Pay and Conditions Act 1991 provided that the Prime Minister appoint a Review Body to examine and report on such matters relating to statutory conditions of employment of school teachers in England and Wales as may from time to time be referred to the Review Body by the Secretary of State. The first Chairman of the Review Body was Sir Graham Day.

The creation of the School Teachers’ Review Body prompted a review of the OME. The review was carried out in 1991 under the auspices of the Cabinet Secretary. The Review Team’s terms of reference were: ‘To review the organisation and staffing of OME having regard to the recent increases in its responsibilities and the need to maintain effective and efficient operations in the future’. The review most particularly emphasised the need for more expert in-house advice on remuneration questions and the recruitment of a remuneration specialist was given due priority.

In 1993 the Sheehy Report suggested that the Police Negotiating Board should be abolished. The then Home Secretary did not accept this recommendation, though it was agreed in 1995 that Committee D of the PNB, which covered allowances, should be abolished.

A further Review of the OME was carried out in 1995, which focussed particularly on staffing issues, and this highlighted the need to streamline the statistical and administrative functions and to integrate these within the secretariat teams.

On 6 July 1995, responsibility for funding and staffing the Office of Manpower Economics transferred from the Department of Employment to the Department for Business and Regulatory Reform  (formerly Dept. Trade & Industry)as part of more general machinery of government changes. The OME retained its operational and policy independence and the staff transferred along with the office.

Remits for the Review Bodies were amended in 1998 to require them to have regard to the need to recruit, retain and motivate staff, the funds available to the relevant Department, the Department’s output targets, and the Government’s inflation target, when making their recommendations.

The Prison Service Pay Review Body (PSPRB)

The formation of the sixth and newest Pay Review Body, the PSPRB, was announced in February 2001. The then Home Secretary the Rt Hon Jack Straw announced he would be proceeding with plans for the creation of the Prison Service Pay Review Body in the Criminal Justice and Public Order Act 1994.   The Review Body was charged with providing independent advice on the remuneration of governing governors and operational managers, prison officers and support grades in the England and Wales Prison Service, and independent advice on the remuneration of prison governors, prison officers, prison auxiliaries and night patrol officers in the Northern Ireland Prison Service.  The remit did not cover Scotland. The first Chairman of the Review Body was Sir Toby Frere.

The Police Advisory Board for England and Wales (PABEW)

The Police Advisory Board was created in 1965. Following a review of the operation of the Board by the Minister of State with responsibility for the Police, Charles Clarke MP, the Secretariat for the Police Advisory Board for England and Wales was transferred in April 2001 from the Home Office to OME. (There are similar bodies for Scotland and Northern Ireland administered by their respective Home Departments.)  The Board's role is to:

(i) advise the Secretary of State on general questions affecting the police in England and Wales, and

(ii) consider draft regulations which the Secretary of State proposes to make under section 50 or section 52 of the Police Act 1996 with respect to matters other than hours of duty, leave, pay and allowances, or the issue, use and return of  police clothing, personal equipment and accoutrements, and to make such representations to the Secretary of State as it thinks fit;

(iii) consider draft regulations which the Secretary of State proposes to make under section 37, 39, 81 or 83 of the Police Act 1997, and to make such representations to the Secretary of State as it thinks fit;

(iv) consider draft regulations which the Secretary of State proposes to make under Part 2 of the Police Reform Act 2002, and to make such representations to the Secretary of State as it thinks fit.

The Board may also consider any matter relating to non-negotiable conditions of service (as defined in sections 50 and 52 of the Police Act 1996 and excluding those matters listed in (ii) above), and any other matter affecting the police which has been referred to it by the Secretary of State, and it will advise the Secretary of State on such matters within any time limit specified by the Secretary of State.

Additional responsibility for the SSRB

With devolution to Scotland, Wales and Northern Ireland; and the creation of the Greater London Authority, the Senior Salaries Review Body saw an increase in its remit groups as it also advises on the remuneration of Members and Office Holders of the Devolved Assemblies and the London Assembly as well as the Westminster Parliament.

Further information on individual Review Bodies and the Police Boards can be found on their respective pages on this website. OME’s current structure can be found on the website page titled “About Us”.