Treasury’s gender pay gap figures show big bonus discrepancy

The Treasury has admitted that it has a problem with its bonus payments to staff, as it publishes an annual report on its gender pay gap for the first time, while HMRC has performed well with only a 10% differential rates for staff

The government introduced a statutory requirement for organisations with 250 or more employees to report annually on their gender pay gap.

The Treasury’s report shows the median gender pay gap for all employees is 13.7%, which it states is below the national median gender pay gap of 18.4%.

However, the mean bonus gender pay gap is 33.5% and the median bonus gender pay gap is 20%.

In a letter explaining the statistics sent to the Treasury select committee, Tom Scholar permanent secretary to the Treasury, said the figures show ‘we have a particular problem with bonus payments’, and conceded the gap is ‘well above the civil service average’.

The Treasury says this difference is because bonuses paid to senior civil servant (SCS) employees are considerably higher than those paid to delegated grades (AA – Grade 6), as they are centrally set, and there is a lower proportion of women in the SCS.

Women made up 42% of the SCS as at 31st March 2017, with a much higher proportion of women in junior grades - women made up 65% of the lowest three grades as at 31st March 2017.

The Treasury itself notes: ‘This is even more stark in the executive agencies, where women made up 33% of the SCS and 72% of the lowest two grades as at 31st March 2017. This has resulted in a larger mean and median bonus gender pay gap.’

Scholar said: ‘The main reason for this gap is that bonuses are higher for senior staff than for junior staff; and, in 2016-17, men in senior grades were more likely than women to be paid bonuses.

‘For the Treasury’s SCS in 2016-17 the male/female split was 71/29 for end-year bonuses, and 69/31 for in-year bonuses.’

The Treasury says it is committed to minimising the gender pay gap within the organisation, and has already made improvements to its pay system to shorten pay ranges and thereby improve internal equity.

The department has set a target of achieving representation of 50% female at every grade in the organisation, with a particular emphasis on increasing the representation of women in senior level positions. Over the last two years, the number of women at SCS level has increased by 3.2%. Since 31st March 2017 50% of the Treasury’s directors and director generals are now women.

The report also notes: ‘This year, to improve the distribution of performance bonuses at the most senior levels of the organisation, the SCS pay committee included an external diversity expert, which has resulted in improved outcomes in terms of gender and part time workers and we would expect this to be reflected in our 2018 data.’

According to its gender pay gap report, HMRC’s mean bonus gap is 10.4%, while its mean gender gap is 8.4% and its median gap stands at 12.2%.

HMRC says the bonus gap is affected by two main factors: all end of year performance payments are paid according to grade with higher values paid to staff in higher pay grades to reflect the work they carry out; and the legislation requires the inclusion of year-end performance bonuses which have been pro-rated for staff who work reduced hours, of which 80.9% of whom are women.

The report states: ‘At HMRC we are proud to enable our staff to work alternative working patterns including reduced hours if it suits their lifestyle. However this does therefore impact our mean bonus gap.’

HM Revenue and Customs gender pay gap report – 2017 is here.

Gender Pay Gap Report 2016 - 2017: HM Treasury Group is here.

Letter to Treasury select committee explaining bonus gap data is here.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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