Departmental Remuneration Report
Remuneration Policy
The Remuneration Committee comprises:
- Keir Starmer QC (DPP)
- Peter Lewis (Chief Executive)
- Ros McCool (Director of HR, to 22 October 2010)
- Mark Summerfield (as Deputy Director, Pay and Reward to 26 August and as Director of HR from 27 August 2010)
There are no independent members of the Committee.
The remuneration of senior civil servants is set according to guidance provided by the Cabinet Office, following the recommendations made by the independent Senior Salary Review Body (SSRB) to the Prime Minister.
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 is required to have regard to the following considerations: 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 www.ome.uk.com.
In addition, the Remuneration Committee is tasked with considering the relative contributions of the Department's senior employees within each pay band. Paying due regard to completed performance reports, consistency and scope of objectives and the effects of external factors, the Committee will then consider individual awards in line with Cabinet Office guidance. Following Cabinet Office advice, a pay freeze applied to SCS staff in 2010-11, so no increase was paid in relation to either the cost of living or performance. Again, following Cabinet Office guidance, an additional performance-related payment averaging 5 per cent was available for Senior Civil Service staff during 2010-11. The top performing 25 per cent of staff received payments in the region of 10 per cent, with the next 40 per cent receiving payments in the region of 6 per cent.
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.
The contract for the DPP, Keir Starmer QC, covers a period of five years from 1 November 2008 to 31 October 2013. The Director of the Central Fraud Group, David Green QC, was also on a fixed-term contract, which was extended when the CPS and RCPO merged in January 2010. This contract ended on 8 April 2011.
Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme. A new scheme was introduced in December 2010, and this will apply to all future payments made by the CPS.
Further information about the work of the Civil Service Commissioners can be found at www.civilservicecommission.org.uk.
With the exception of Non-executive Directors, all other officials covered by this report hold appointments which are open-ended and allow for retirement at the age of 60 or 65.
Non-executive Directors
Rob Sykes's contract covers a period of three years from 1 April 2009 to 31 March 2012. Doreen Langston's contract covers a period of three years from 15 June 2009 to 14 June 2012. Stephen Redmond's contract ran from 1 January 2010 to 31 December 2010. Gerard Lemos's contract was for a period of three years from 1 April 2009 to 31 March 2012. He resigned prior to the end of the contract and left the CPS on 31 October 2010. No compensation is payable to Non-executive Directors for early termination of their contract, if the termination is by mutual consent. One month's salary is payable otherwise.
The remuneration of all Directors, Non-executive Directors and staff employed in the CPS is paid entirely in cash.
Salary Entitlements
The following sections provide details of the remuneration paid to the most senior officials of the Department.
Remuneration (audited)
| Officials | Post held | 2010-11 Salary £000 |
2010-11 Bonus Payments £000 | 2009-10 Salary £000 | 2009-10 Bonus Payments £000 |
|---|---|---|---|---|---|
| Keir Starmer QC (a) | Director of Public Prosecutions | 195 - 200 | - | 195 - 200 | - |
| Peter Lewis | Chief Executive | 160 - 165 | - | 160 - 165 | 15 - 20 |
| Paul Staff | Director Finance | 90 - 95 | 5 - 10 | 35 - 40 (fye 85 - 90) | - |
| David Green QC | Director Central Fraud Group | 210 - 215 | - | 50 - 55 (fye 210 - 215) | - |
| Mike Kennedy | Chief Operating Officer | 145 - 150 | 5 - 10 | 145 - 150 | 10 - 15 |
| Doreen Langston (b) | Non-executive Director | 10 - 15 | - | 10 - 15 (fye 10 - 15) |
- |
| Gerard Lemos (b) and (c) | Non-executive Director (to 31 Oct 10) | 5 - 10 (fye 10 - 15) | - | 10 - 15 | - |
| Stephen Redmond (b) and (c) | Non-executive Director (to 31 Dec 10) | 5 - 10 (fye 5 - 10) | - | 5 - 10 (fye 10 - 15) | - |
| Rob Sykes (b) | Non-executive Director | 10 - 15 | - | 10 - 15 | - |
fye = full year equivalent salary
a) Between 1 April and 24 August the Director of Public Prosecutions was provided with a car and chauffeur for official use. This is assessed by HM Revenue & Customs as constituting a benefit in kind. The estimated value of the benefit in kind received by Keir Starmer QC during the 2010-11 financial year was £4,298 (2009-10 £11,015). Tax and National Insurance contributions on this sum, amounting to £5,398 (2009-10 £9,693) are due to be paid on the Director's behalf by the CPS. The contract for the car for official use was terminated with effect from 25 August 2010.
The remaining Board members did not receive any benefits in kind.
b) Doreen Langston, Gerard Lemos and Rob Sykes are paid £13,044 per annum. Stephen Redmond was paid at a daily rate of £650. Expenses are paid to all Non-executive Directors.
c) Gerard Lemos resigned and left the CPS on 31 October 2010. Stephen Redmond's contract expired on 31 December 2010.
Salary
'Salary' includes gross salary; overtime; reserved rights to London weighting or London allowances; recruitment and retention allowances; private office allowances; and any other taxable allowance to the extent that it is subject to UK taxation.
This report is based on accrued 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 & Customs as a taxable emolument.
Bonuses
Bonuses are based on performance levels attained and are made as part of the appraisal process. Bonuses relate to the performance in the year in which they become payable to the individual. The bonuses reported in 2010-11 relate to performance in 2009-10 and the comparative bonuses reported for 2009-10 relate to performance in 2008-09.
Pension Benefits
Civil Service Pensions
Pension benefits are provided through the Civil Service pension arrangements. From 30 July 2007, civil servants may be in one of four defined benefit schemes; either a final salary scheme (classic, premium or classic plus); or a whole career scheme (nuvos). These four statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus and nuvos are increased annually in line with Pensions Increase Legislation. 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 set at the rate of 1.5% of pensionable earnings for classic and 3.5% for premium, classic plus and nuvos. 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 three 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. In all cases members may opt to give up (commute) pension for lump sum up to the limits set by the Finance Act 2004.
The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 3% and 12.5% (depending on the age of the member) into a stakeholder pension product chosen by the employee from a panel of three providers. 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 0.8% 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 and 65 for members of nuvos.
Pension benefits (audited):
| Officials | Accrued pension at pension age as at 31 March 2011 and related lump sum £000 | Real increase in pension and related lump sum at pension age £000 | CETV at 31 March 2011 £000 | CETV at 31 March 2010 (a) £000 | Real increase in CETV £000 |
|---|---|---|---|---|---|
| Keir Starmer QC Director of Public Prosecutions | pension 10 - 15 lump sum 25 - 30 |
pension 2.5 - 5 lump sum 10 - 12.5 |
132 | 73 | 49 |
| Peter Lewis Chief Executive | pension 65 - 70 lump sum 200 - 205 |
pension 0 - 2.5 lump sum 0 - 2.5 |
1,317 | 1,210 | no increase |
| Paul Staff Director Finance | pension 40 - 45 lump sum 120 - 125 |
pension 2.5 - 5 lump sum 7.5 - 10 |
816 | 704 | 57 |
| David Green QC Director Central Fraud Group | pension 10 - 15 none |
pension 0 - 2.5 no increase |
233 | 188 | 26 |
| Mike Kennedy Chief Operating Officer | pension 50 - 55 lump sum 155 - 160 |
pension 0 - 2.5 lump sum 0 - 2.5 | 1,080 | 991 | 4 |
The actuarial factors used to calculate CETVs were changed in 2010-11. The CETVs at 31 March 2010 and 31 March 2011 have both been calculated using new factors for consistency. The CETV at 31 March 2010 therefore differs from the corresponding figure in last year's report which was calculated using the previous factors.
Further details about the Civil Service pension arrangements can be found at the website www.civilservice.gov.uk/my-civil-service/pensions/index.aspx.
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 within the guidelines and framework prescribed by the Institute and Faculty of Actuaries 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.
Compensation for loss of office
There were no such payments made during the year.
Pension for the Director of Public Prosecutions, Keir Starmer QC
Pension benefits are provided through a pension scheme which has the DPP as its only member. It has not yet been laid before Parliament. The Scheme is unfunded and the cost of benefits will be met by monies voted by Parliament each year. The pension will be increased annually in the same way as other public service pensions. The pension scheme provides benefits which broadly match the benefits provided under the Judicial Pension Scheme.
Keir Starmer
Accounting Officer
5 July 2011
